Anual_Report_2011 by xiaohuicaicai



Directors and Advisers .........................................................................................        2

Chairman’s Statement .........................................................................................          3

Chief Executive Officer’s Report ...........................................................................            4

Directors’ Report ..................................................................................................   10

Remuneration Report ...........................................................................................        14

Corporate Governance ........................................................................................          17

Independent Auditors’ Report ..............................................................................            21

Consolidated Income Statement ..........................................................................               22

Consolidated Statement of Comprehensive Income ............................................                            22

Consolidated Statement of Financial Position .......................................................                   23

Company Statement of Financial Position ............................................................                   24

Consolidated and Company Statements of Changes in Equity .............................                                 25

Consolidated Statement of Cash Flows ................................................................                  27

Company Statement of Cash Flows .....................................................................                  28

Notes to the Accounts .........................................................................................        29
    Directors and Advisers

    Directors                                                                       Auditors
    Bridget Penelope Blow (Non-Executive Chairman)                                  UHY Hacker Young LLP
    Michael Ashley (Chief Executive Officer)                                        Chartered Accountants
    Colin Raymond Grimsdell ACA (Group Finance Director)                            Quadrant House
    Geoff Brady (Non-Executive Director)                                            4 Thomas More Square
    Anthony Patrick Shearer FCA (Non-Executive Director)                            London E1W 1YW
    Daniel Bruce Harris (Non-Executive Director)
                                                                                    Registrars & Transfer Office
    Secretary                                                                       Capita Registrars
    Colin Raymond Grimsdell ACA                                                     Northern House
                                                                                    Woodsome Park
    Registered Office                                                               Fenay Bridge
    Harvard House                                                                   Huddersfield
    The Waterfront                                                                  West Yorkshire HD8 0LA
    Elstree Road
    Elstree                                                                         Public Relations Advisers
    Hertfordshire WD6 3BS                                                           Anthony Parker
    Stockbrokers & Nominated Adviser                                                Berkhamsted
    Investec Bank (UK) Limited                                                      HP4 2SG
    2 Gresham Street
    London EC2V 7QP

    Wragge & Co LLP
    55 Colmore Row
    Birmingham B3 2AS

                                                                            31           31             31        31            31

    Five year record                                                    March        March        March        March        March
                                                                          2011        2010         2009         2008         2007

    Group Turnover (£’ millions)                                           61.2        77.4          42.2       66.1         111.9

    Profit/(loss) before tax – Continuing operations (£’ millions)          0.9         1.4          (0.9)       (8.8)       (22.3)

                            – Discontinued operations (£’ millions)           -         (5.7)      (15.4)       21.2         (21.7)

                            – Total (£’ millions)                           0.9         (4.3)      (16.3)       12.4         (44.0)

    EPS (p)                                                                 0.7p        (9.8)p     (30.8)p       23.5p       (74.7)p

    1. Results of the Leisure Division are treated as discontinued operations in 2007 and 2008 only.
    2. Results of Roadstar, the Grundig JV and the discontinued UK “lead in” consumer electronics businesses are treated as
       discontinued operations in 2007, 2008 and 2009 only.
    3. Results of the discontinued UK full service LCD tv operations are treated as discontinued operations in 2008 and 2009 only.
    4. Other operations treated as discontinued in 2010 are set out in Note 8 on page 38.

                                                                                  Chairman’s Statement

The restructuring and downsizing programme is now well           of choice for retailers and consumers in this space.
established and, for the first time in over 5 years, the Board
                                                                 The current difficult market environment has widened the
is able to present shareholders with accounts unaffected
                                                                 possibility to acquire, or partner with, other businesses,
by discontinued activities. Our new business plan is from a
                                                                 products or brands. The Board is actively investigating
position of stability that we believe will deliver sustainable
                                                                 opportunities as they are identified.
profit whilst protecting our strong cash position.

Investment in improving our technical understanding and          Dividend
capabilities, in combination with the expansion of the
                                                                 The Board is not proposing the payment of an ordinary
marketing and sales teams, is starting to produce tangible
                                                                 dividend. A special £10.1m dividend was paid to
benefits, and new opportunities to leverage the Group’s
                                                                 shareholders on 15 October 2010.
strengths are being sought.

                                                                 Board Changes
Group Performance
                                                                 Geoff Brady was appointed as an Independent Non-
Against a backdrop of continued weakness in the global
                                                                 Executive Director. He is currently the Non-Executive
economy, particularly in the consumer electronics sector,
                                                                 Chairman of Robert Dyas, a convenience non-food retailer.
the Group has continued with the programme to improve
                                                                 Geoff brings substantial retail and marketing knowledge to
operational efficiency and address growth opportunities.
                                                                 the Boardroom.
Sales for the current period totalled £61.2m (2010:
                                                                 Paul Selway-Swift retired as a Director of the Company at
£77.4m) resulting in an operating profit of £0.7m (2010:
                                                                 the Annual General Meeting 2010, where it was noted
£1.2m). After a relatively weak performance in the first
                                                                 that the Company wished to thank Paul for his substantial
half of the period, sales recovered led by the UK’s digital
                                                                 contribution to the Group over the last twelve years.
switch over (DSO) timetable and seasonal demand for the
iLuv product range. The Australian market was particularly       Colin Grimsdell, Finance Director and Company Secretary,
difficult in the first half but began to recover in the second   has given notice of his intention to leave the business
half with strong sales in the Set Top Box (STB) and DAB+         during August 2011. In his time at the Company Colin has
sectors. Net cash at the end of the period remained strong       contributed to the stabilising of the business ready for the
at £13.5m (2010: £28.9m). A special dividend totalling           next stage of its strategy. We wish Colin well in future.
£10.1m was paid to shareholders in October. Working              A further announcement will be made when a new Finance
capital requirements have increased in response to the           Director has been appointed.
timing of the UK DSO programme.

Progress is being made in developing the Group’s
growth platform through new investment in people,                We have made good progress with our plans and the
marketing and external partnerships such as the recently         investment we are making both supports and extends our
announced venture with ANT plc. Through improving                strategic objectives. Trading conditions for producers and
our own understanding of technologies, and partnering            retailers of consumer electronics have been challenging,
with selected industry leaders, we now have an exciting          and are expected to remain so for the foreseeable future.
pipeline of new and differentiated products in development       We have therefore reduced forecasts and adjusted budgets
through which to extend and enhance the Group’s                  for the current financial year, so as to retain tight control of
positioning in our target segments.                              inventory levels and working capital. The Group’s financial
                                                                 position continues to be strong.
Looking into the near future, demand for Digital TV
Recorder (DTR) functionality, and the convergence of             BRIDGET BLOW
digital broadcasting and broadband services, will mean           Chairman
that ownership of proprietary technology will be critically      27 July 2011
important in successfully delivering new products to the
mass market. We are positioning Harvard to be a supplier

    Chief Executive Officer’s Report

       During the last year we have set about the task of carefully putting in place an infrastructure and
       commercial culture capable of competing and growing the existing business in the dynamic Digital
       Vision and Apple Accessory markets.

       Now that our business platform is established, we have begun to actively invest in our growth
       potential. Over the longer term, our strategic intent is for Harvard designed and branded products
       to account for a much higher percentage of the Group’s turnover, enabling us to capture and
       retain a larger share of the total value chain.

       To this end we are developing our market positioning through the introduction of a thoroughly
       researched new brand, View21; significantly upgrading our technological capability, so as to drive
       new product development (DTR’s, Digital Internet); expanding marketing and sales capabilities
       to increase awareness and demand for iLuv Apple accessories and investigating the possibility of
       increasing our rate of progress through complimentary acquisitions and partnerships.

       The Board believes that the combined benefits accruing from this strategic investment, will increase
       our future incremental rate of growth and profitability in both the UK and Australia.

       We have conducted extensive consumer market
       research in the digital vision segment. This focussed
       on the competitive structure of the DTR segment,
       where there is growing demand but few brands.
       Through our analysis of the data, we have developed
       a clear market positioning for our newly created
       brand, View21, which will be launched in the 2nd
       half of 2011/12.

       The View21 brand is positioned to address the
       needs of more technically savvy consumers, offering
       class leading features, greater functionality and
       enhanced design at affordable prices. Our Goodmans
       brand will continue to offer good value products at
       lower price points. As part of our branding strategy
       the Grundig brand is being withdrawn in the UK.

                                                           Chief Executive Officer’s Report

New Product Development
In the past Harvard’s product range has been dominated by sourcing products directly from our supplier base.
Going forward, we will increasingly design our own products whilst continuing to outsource manufacture.
New product development will address the needs of both UK and Australian consumers.

To better support our in-house technical team we have entered into a partnership with ANT plc, a
specialist software designer. This co-operative venture is developing an advanced range of market leading
DTR products which will be launched later this year under the View21 brand. With increased marketing
support this will enable us to compete in a higher value segment of the market. The need for ownership of
proprietary technologies will result in much greater barriers to entry in the digital vision segment, particularly
at the entry level end of the market. This has created a substantial opportunity, in partnership with leading
retailers, to develop new technically enhanced products for their in-house own label budget ranges.

As the UK’s DSO programme ends in 2012, we will already be supplying a growing demand for an upgraded
range of premium digital vision products.

Marketing and Sales
To maximise the potential returns from iLuv’s comprehensive range of Apple accessories we are making
significant investment to improve the effectiveness of our marketing and sales activities. The commercial team
has been strengthened with experienced sales personnel recruited from prominent competitors in the Apple
Accessories sector. This investment will lead our strategy to grow iLuv’s market share through accessing
new distribution channels in mobile phone network stores, on-line retailers and specialist accessory vendors.
In addition to this we have agreed a new 10 year distribution agreement for the UK and the business is
exploring options for distribution in Australia.

A newly appointed brand manager is now supporting the sales drive, through greater marketing and
promotional activity, to build greater awareness and interest among retail outlets in this high quality brand.

Platform Expansion
To enable us to maximise and then expand beyond our current capacity, and in the longer term to capture
and retain a larger share of the total value chain, we need to examine ways of increasing our potential

We are actively investigating opportunities to extend the existing business platform through acquisition,
licensing or partnership with additional complimentary businesses, products or brands in both Australia and
the UK. These can then be incorporated into the current business model and leveraged through using the
Group’s existing infrastructure and variable cost model.

The agreements with ANT plc, regarding technological partnership, and with iLuv, extending our licensing
agreement, represent the first steps taken in delivering this strategic plan.

    Chief Executive Officer’s Report

       Financial Review
       The past year saw the Group return to profitability, excluding corporate disposals, for the first
       time since 2005, and report numbers unaffected by discontinued activities arising from the
       earlier restructuring programme. There is now a sound financial basis against which to report
       future progress.

       The first half loss of £0.6m was principally the result of a disappointing performance in
       Australia, especially when compared with the unusually strong outcome in the same period the
       previous year, and the disappointing HD Freeview launch, where sales only achieved a fraction
       of market expectations. Despite the occurrence of the football World Cup, consumers failed to
       appreciate the benefits of trading up to the higher standard, instead showing greater appetite
       for DTR products.

       The second half was much stronger, more than recovering the first half loss, with the UK DSO
       timetable resulting in strong orders for STB’s for retailer own label branded products and the
       Government’s target help scheme. Australia also experienced a seasonal recovery with STB
       demand also helped by the regional DSO programme and strong sales in DAB+ radio products
       where Harvard is the local market leader.

       iLuv continued to launch products and broaden awareness of the product range, building the
       platform from which this years new investment is expected to deliver strong growth. iLuv’s
       market share increased year on year but still only represents a fraction of the UK’s £480m
       Apple Accessories market.

       The Group’s financial position remains healthy with a net cash position of £13.5m. Net interest
       received in the year amounted to £0.2m.

       Overall demand for consumer goods, particularly electronic products, has been weak. Spending
       power has been curtailed by a number of factors including price increases for essential food
       and fuel items, a rise in the rate of vat, wage restraint, public sector spending cuts and
       relatively high unemployment levels.

       Much of this has yet to fully impact upon the economy but is expected to have an increasing
       influence on household disposable income in the months ahead. March 2011 saw a fall in
       overall demand for consumer electronic products of 17% when compared with the previous
       year. The decreased consumer demand has had an adverse effect on orders from some of our
       major customers.

                                                                    Chief Executive Officer’s Report

Digital Media Boxes (DMB)                                              Some of the features available on the new
                                                                                DTR’s using the App on an iPad,
After a lull in the UK Government’s DSO timetable in
                                                                       iPhone or iPod Touch.
2010, with only 11% of households experiencing DSO,
momentum picks up in 2011 with 33% of households                       1) Throw Media to TV
due to switch in each of the next two years, before the                Using an App on an iPad, iPhone or iPod Touch, users will be
                                                                       able to send photos or videos stored on their device to the
programme’s completion at the end of 2012. Demand for
                                                                       Digital Media Box allowing them to be viewed on their TV.
STB’s continues to respond to the DSO timetable however a
                                                                       As the user scrolls through their pictures on the App, each
growing proportion of consumers, in regions yet to switch              new image will appear on the TV in
from analogue, already have access to digital through the              sync with the device.
purchase of integrated digital TV’s or subscription to pay
per view services (SKY, Virgin).

The ‘free to air’ STB business will increasingly move away
from the Standard Definition (SD) low cost Freeview boxes
to more complex, higher value, products such as High
Definition (HD) DTR, and STB’s which will facilitate the
convergence of Digital TV and internet content. Demand
for HD STB’s in 2010 got off to a slow start but interest is           2) Full Control
expected to steadily increase as the price differential with           Access the EPG and the Recordings Library without
SD narrows.                                                            interfering with what is being viewed. The user interface will
                                                                       be displayed on the device and allow use of features such as:
                                                                       • Schedule new recordings and reminders
The need to upgrade and broaden the Group’s technical                  • See programme information
                                                                       • Explore and manage the Library
capability was a key task in 2010/11, to ensure that we
possess sufficient skills in both software and hardware                This control functionality will work either within the
                                                                       house or on the move via an internet connection.
design, to deliver premium quality DTR’s, demand for which
is growing strongly from a low base. A new Chief Technical
Officer position was created and the technical team was

The first half of 2011/12 will see our partnership with ANT
deliver the first View21 branded products with more higher
specification HD DTR’s following later in the year. Further
evidence of our growing technical competence comes with
                                                                       3) Stream to a device
the launch of dedicated App’s for Apple iPad, iPhone and
                                                                       Users will be able to stream video content from the Digital
iPod Touch products which enable wireless interactivity                Media Box and watch it on the hand held device while other
between these products and our digital media boxes.                    programmes are being viewed on the TV.

                                                                       This can either be a programme stored in the Recordings
The launch of YouView, the subscription free, connected                Library or a live broadcast.

digital TV platform, is expected in 2012 ahead of the                  Streaming will initially only be available within the home
                                                                       network with a planned upgrade to extend the service
London Olympics and will require the availability of easy to
                                                                       anywhere with a suitable internet connection.
use, affordable, well designed DTR’s to enable consumers to
access the service. It is likely that TV manufacturers will start
to integrate this functionality into their product designs but
the relative expense of upgrading TV sets should support TV
recorder demand.

    Chief Executive Officer’s Report

       Apple Accessories
       Apple accessories continue to outperform the broader consumer electronics market as Apple
       continues to deliver a successful product pipeline. Awareness of the New York iLuv brand has
       grown with many positive product reviews appearing in consumer electronics media. Headphones,
       iPad cases and other accessories sold well through a limited number of distributors offering
       encouragement for further growth as new retailers are signed up.

       Our strategy is to take advantage of the market’s
       highly fragmented structure to grow share through
       investment in our marketing, promotional and sales
       activities. This will extend awareness, interest and
       demand for the iLuv brand; deepen appreciation
       of the comprehensiveness and high quality of the
       range, and heighten understanding of the
       opportunity to provide a ‘one stop shop’ service
       for retailers.

       The enlarged and dedicated sales team will focus
       not only on traditional high street retailers and
       supermarkets but will increasingly open up new
       channels including mobile phone network stores,
       on-line retailers and dedicated accessory outlets.

       As part of our long term strategic plan, and
       commitment to this market segment, Harvard has
       entered into an agreement with iLuv regarding a
       significant deepening and extension of the current
       partnership agreement, both in the UK and
       Australia. iLuv has recently further extended its
       product portfolio through a partnership
       endorsement with Samsung on the Galaxy tablet
       and smartphone range.

       Sales over the next few years are expected to
       benefit strongly from the Group’s investment in
       sales and marketing throughout 2011/12.

                                                          Chief Executive Officer’s Report

Consumer spending remains subdued despite evidence of recovery in some other sectors of the economy.
The Government’s spending cuts targeting a reduction of the budget deficit, and interest rate rises to curtail
inflationary pressure, continue to depress consumer demand.

The structure of the consumer electronics market in Australia is less competitive than in the UK and as a result
operating margins are stronger, delivering a higher return on investment. Our operational structure in Australia
has a broader base than the UK and we are actively considering opportunities to extend both the breadth and
depth of the Australian business.

The Group’s focus on the digital vision and Apple                                                Feel The Music with
accessory markets will result in the increasing                                                           Trio Touch
importance of these segments, benefiting from
the new product pipeline and the launch of brand

The strategy in 2011/12 is targeted at maintaining
and increasing our strong market shares of the STB,
DTR and Digital Radio categories. Having already
grown to represent a 15% share of the STB market,
through the Bush and Grundig brands, and with
new innovative products and the launch of View21
to come, we are confident of further progress.

Australia’s DSO timetable is still in its infancy, with
the major cities not due to switch until 2013, but
Harvard has already been awarded contracts to
supply regions in Queensland and Victoria. The Group
is strongly positioned to take advantage of increased
                                                              INTRODUCING THE WORLD FIRST MICROSYSTEM
consumer interest in digital products through its well        WITH APNG DAB+ SLIDESHOW
established retailer network.

Last year we were the first producer to supply digital ‘free to air’ STB’s equipped with an electronic programme
guide (EPG) and DTR products will follow in 2011. Harvard’s speed to market was also demonstrated through the
successful launch of its Digital+ DAB radios which have already captured a 25% market share.

The Apple accessories market, in line with our Group strategy, is an opportunity that we are keen to develop,
leveraging our existing infrastructure and operational variable cost model. Under a new agreement with iLuv we
will start to supply a limited number of products in the fourth quarter of 2011, building towards marketing the
full range by the end of 2012.

Chief Executive Officer
27 July 2011

     Directors’ Report

     The Directors have pleasure in submitting their report and
                                                                    Directors’ Biographies
     financial statements for the year ended 31 March 2011.

                                                                    Ms B P Blow,
                                                                    Non-Executive Chairman
     Principal Group Activities and                                 Bridget Blow, 62, joined the Board on 1 July 2005 and on
     Review of Operations                                           4 October 2007, was appointed Non-Executive Chairman.
                                                                    Bridget is Chairman of the Nomination Committee
     The Chairman’s Statement on page 3 and the Chief
                                                                    and is also a member of the Audit and Remuneration
     Executive Officer’s Report on pages 4 to 9 describe the
                                                                    Committees. She is also Non-Executive Chairman of
     principal activities and operations of the Group. The Chief
                                                                    Trustmarque Solutions Limited and Non-Executive Deputy
     Executive Officer’s Report also describes the likely future    Chairman of the Coventry Building Society. Bridget was
     developments in the business of the Group. The principal       Chief Executive of ITNET plc from 1994 to 2005, leading a
     subsidiaries are listed in Note 12 on page 42.                 buyout from Cadbury Schweppes in 1995 and a full listing
                                                                    on the London Stock Exchange in 1998. She has received
                                                                    numerous business awards and was a Non-Executive
     Results and Dividends                                          Director of the Bank of England from 2000 to 2005. She
                                                                    was President of the Birmingham Chamber of Commerce
     The results of the Group are set out in the Consolidated
                                                                    and Industry from 2008 to 2009.
     Income Statement on page 22.

                                                                    M Ashley,
     A special dividend of 20 pence per share was paid on 15
                                                                    Chief Executive Officer
     October 2010 to shareholders on the register on 1 October
                                                                    Mike Ashley, 43, joined the Group in October 2004. The
     2010. The Directors do not recommend a final dividend in
                                                                    following year he was appointed Managing Director of
     view of the Group’s performance over the past year and         Bush Radio plc and in October 2006, he was promoted to
     the modest outcome expected for 2011/12.                       Managing Director of the UK Consumer Electronics
                                                                    Division. He joined the Board in October 2007 and on
                                                                    30 September 2009, he was appointed Chief Executive.
     Directors                                                      Mike is a member of the Nomination Committee. Mike
     The Directors of the Company at the date of this Report        is responsible for developing and leading the business
     are shown on page 2 and their biographical details are set     strategy of the Group. Prior to joining the Group Mike
     out below. In accordance with the Articles of Association      held senior Trading and Marketing positions with Boots
     of the Company, Geoff Brady, having been appointed since       the Chemist, Argos Ltd and Dixons Store Group and has
     the last Annual General Meeting, will retire at this year’s    considerable knowledge of the requirements of our retail
     Annual General Meeting, and being eligible, offers himself     customers.
     for re-election. Bridget Blow and Daniel Harris retire by
     rotation at this year’s Annual General Meeting and, being      G Brady,
     eligible, offer themselves for re-election. As announced       Non-Executive Director
     on 30 March 2011, Colin Grimsdell gave notice of his           Geoff Brady, 57, joined the Group on 1 October 2010.
     intention to leave the business during August 2011. Colin      Geoff is Chairman of the Remuneration Committee and
     has contributed to the stabilising of the business ready for   was appointed as a member of the Audit Committee
     the next stage of its strategy. A further announcement will    on 28 June 2011. Geoff is Non-Executive Chairman of
     be made once a new Finance Director has been appointed.        Robert Dyas, a convenience non-food retailer and also
                                                                    Non-Executive Chairman of Harvey Jones Kitchens Ltd
                                                                    a prestige manufacturer, retailer and installer of English
                                                                    handmade kitchens. Geoff is also a Non-executive Director
                                                                    of Albemarle & Bond, a leading pawnbroking and retail
                                                                    financial services business that is traded on AIM. He is

                                                                                                  Directors’ Report

also a Non-Executive Director of Saul D Harrison plc, a
                                                                 Directors’ Interests
manufacturer of non-woven wiping cloths. Geoff has
proved himself to be a very experienced retailer and as well     The interests of the Directors in the ordinary share capital
as customer facing skills he brings substantial buying and       of the Company and in the Company’s share option
supply chain knowledge to the Group.                             schemes are shown in the Remuneration Report on pages
                                                                 14 to 16 together with details of their service agreements
C R Grimsdell, ACA,                                              and remuneration.
Group Finance Director and
Company Secretary
Colin Grimsdell, 47, joined the Group as Director of             Issued Share Capital
Finance in November 2009. Prior to joining the Group,            At the date of this report, 51,275,685 Ordinary Shares of
Colin was Chief Financial Officer of The Sanctuary Holdings      10 pence have been issued by the Company, are fully paid
Ltd, a private equity backed business and played a pivotal       up and are traded on the AIM Market of the London Stock
role in the successful sale of the company to PZ Cussons         Exchange.
in 2008. Previously, Colin was with The Boots Group for
over 10 years where his final role was Commercial Finance
Director for Boots the Chemist. During his tenure at Boots       Substantial Holdings
he held various Divisional Finance Director roles covering
property, services and external statutory reporting. His early   The Company has been notified of the following holdings

career was at KPMG (Birmingham) where he qualified as a          which represent 3% or more of the nominal value of the
Chartered Accountant. He gained a Mathematics BSc from           issued ordinary share capital of the Company as at 7 July
Warwick University.                                              2011:
                                                                                                        Number of
                                                                                                        shares held   Percentage
D B Harris, B.Sc (Econ),
Non-Executive Director                                             GAM London Limited                   8,185,012       15.96

Daniel Harris, 51 joined the Group in 1981. He became              Henderson Global Investors Limited   7,327,514       14.30
Marketing Director of Harvard International Ltd in 1983
                                                                   Schroders Plc                        6,772,962       13.11
and joined the Board when the Company floated as Alba
plc in 1987. He was Group Chief Executive Officer for              Legal & General Investment
seventeen years from April 1992 to September 2009.                 Management Ltd.                      6,133,222       11.96
Daniel purchased the Group’s property and medical
                                                                 * Mrs A J Kaye (the sister of
electronics interests in September 2009 and remains on
                                                                   Daniel Harris)                       5,560,367       10.84
the Board as Non-Executive Director. He is a Director of
Ovarian Cancer Action and West Ham United. Daniel, read            Daniel Harris                        5,549,818       10.82

Economics at the London School of Economics.                       Mr J E Harris (the father of
                                                                   Daniel Harris)                       5,310,821       10.36
A P Shearer, FCA,
Non-Executive Director
Tony Shearer, 62, joined the Board on 6 March 2008. Tony
                                                                 *Mr J E Harris is non-beneficially interested in 900,000 of
is Chairman of the Audit Committee and is a member of
                                                                 these shares.
the Remuneration and Nomination Committees. Formerly
the Chief Executive of Singer & Friedlander, he is
Non-Executive Chairman of Abbey Protection plc and Triple
Plate Junction, both traded on AIM. He is also                   Purchase of Own Shares
Non-Executive Chairman of Caxton FX Ltd and Updata Ltd,
and a Non-Executive Director of Sanctuary Partners. Tony is      The Company currently has no shareholders’ authority to

a Chartered Accountant.                                          purchase its own shares.

     Directors’ Report

     Payments to Suppliers                                               of any economic downturn and has a policy of entering
                                                                         into appropriate foreign exchange contracts to reduce
     It is the Group’s policy, in relation to its suppliers, to settle   exposure to purchases from the Far East. The smaller
     the terms of payment when agreeing the terms of the                 size of the business means that there is a higher degree
     transaction and to abide by those terms provided that the           of reliance on being able to retain key senior personnel.
     goods and services have been supplied in accordance with            The Group has sought to mitigate this risk by investing
     the agreed terms and conditions. Unless otherwise agreed,           in a clear succession plan and implementing competitive
     suppliers are paid on a net monthly basis. The Group                remuneration packages as set out in the Remuneration
     does not follow any other code or statement on payment              Report on page 14.
     practice. As at 31 March 2011, the average number of
     creditor days was 54 (2010 : 32).
                                                                         Financial Risk Management
     Annual General Meeting                                              The financial risk management and policies of the Group
                                                                         are disclosed in Note 15 on pages 43 to 46 of the
     The Annual General Meeting of the Company will be held              Accounts.
     at Harvard House, The Waterfront, Elstree Road, Elstree,
     Hertfordshire WD6 3BS on 13 September 2011, at noon.

     The Notice of Meeting is issued to shareholders with the
                                                                         Liability Insurance for Company
     Annual Report and Accounts. Certain Special Business is             Officers
     to be proposed at the Annual General Meeting, details of
                                                                         As permitted by the Companies Act 2006, the Company
     which are set out in the Notice of Meeting.
                                                                         has maintained insurance cover for its Directors and other
                                                                         Officers (other than the Company’s Auditors) against
                                                                         liabilities in relation to the Group.
     No member of the Group incurred any EU political
     expenditure or made any political donations/contributions           Directors’ responsibilities for the
     during the year under review. There were no charitable
     donations made by members of the Group during the year              Financial Statements
     under review.                                                       Directors are required by the Companies Act 2006 to
                                                                         prepare financial statements for each financial year which
                                                                         give a true and fair view of the state of affairs of the
     Going Concern                                                       Company and the Group as at the end of the financial

     The Directors confirm that the Group has adequate                   year and of the profit or loss for that period. It is also the

     resources to continue in operational existence for the              Directors’ responsibility to maintain adequate accounting

     foreseeable future and, consequently, they continue to              records, safeguard the assets of the Company and the

     adopt the going concern basis in preparing the Accounts.            Group and take reasonable steps in preventing and
                                                                         detecting fraud and other irregularities.

     Principal Risks and Uncertainties                                   The Directors confirm that suitable accounting policies,
                                                                         consistently applied and supported by reasonable and
     The principal risks facing the Group arise from a significant       prudent judgements and estimates, have been used in
     decline in retail consumer spending on non essential goods          the preparation of the financial statements on a going
     due to future economic uncertainty, and volatility in the           concern basis and that applicable accounting standards
     exchange rate between the US Dollar and GB Pounds due               have been followed. The Directors are responsible for
     to that same uncertainty. The Group continues to move               the maintenance and integrity of the Company website.
     towards a more variable cost model to minimise the impact

                                                               Directors’ Report

Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.

The Directors have taken all reasonable steps in their
duty as Directors in order to make themselves aware
of any relevant audit information and to establish that
the Company’s Auditors are aware of that information.
So far as each Director is aware, there is no relevant
audit information of which the Company’s Auditors are
unaware. UHY Hacker Young LLP have expressed their
willingness to continue as the Company’s Auditors and
resolutions will be put to the Annual General Meeting
proposing their re-appointment and authorising the
Directors to fix their remuneration.

Key Performance Indicators
The Group monitors the following KPI’s on a regular basis:
l Sales and Margin by product category and customer
l Returns rates and costs
l Cashflow
l Contribution from each profit centre
No detailed KPI information is presented in the accounts as
the Board believes that this information is too sensitive to

Registered Office
Harvard House, The Waterfront,
Elstree Road, Elstree,
Hertfordshire, WD6 3BS.

By Order of the Board
C R Grimsdell
Group Finance Director and Company Secretary
27 July 2011

     Remuneration Report

     This Report sets out the Group’s policy and disclosures         l ensuring that the interests of the Directors are aligned
     in relation to Directors’ remuneration. Although under          with those of the shareholders.
     the AIM Rules the Company is only required to disclose
                                                                     To this end, the Committee seeks to approve a package
     details of the remuneration of each Director, the following
                                                                     for Executive Directors consisting of basic salary, benefits,
     additional information is provided voluntarily as a matter of
                                                                     share options and incentives, bonuses and pensions. The
     best practice.
                                                                     Committee believes that the policy adopted in the Group’s
                                                                     remuneration of Executive Directors and senior managers
                                                                     will contribute to the long term success of the Company.
     Composition and terms of
     reference of Remuneration                                       This policy is intended to enable the Company both to

     Committee                                                       attract and keep a high calibre management team essential
                                                                     for a well run business. This policy will continue to be
     The Remuneration Committee (“the Committee”) is                 reviewed in the light of changes in market practice and
     responsible for determining the framework or broad policy       legislation which impact upon the Company.
     for the remuneration of the Chairman, Chief Executive, the
     Executive Directors and other members of the Executive          The current elements of the remuneration packages can be
     Management. The Committee is chaired by Mr G Brady              summarised as follows:
     and its other members are Ms B Blow and Mr A P Shearer,
     all of whom are Non-Executive Directors. No Director plays
     part in any discussion about his or her own remuneration.       Base salary and benefits
                                                                     Base salaries for Executive Directors are reviewed by
                                                                     the Committee, normally annually, having regard to
     Non-Executive Directors                                         competitive market practice and individual performance for
     The remuneration of the Non-Executive Chairman is               the financial year.
     reviewed by the Committee Chairman and Chief Executive
     Officer who make their recommendation to the Board.             The general benefits provided to the Executive Directors are
     The remuneration of the other Non-Executive Directors is        a fully-expensed car (or cash alternative), pension, life and
     reviewed by the Chairman who makes recommendations              private health insurance.
     to the Board. The Board determines the remuneration of
     the Non-Executive Directors within the limits set out in
     the Articles of Association. The responsibilities of the role   Annual performance-related
     and the level of fees paid in UK organisations of a similar
     size and complexity to the Group are considered in setting
     remuneration policy for Non-Executive Directors.                During the year the Committee agreed to maintain the
                                                                     remuneration package at the same level for Mike Ashley
                                                                     and Colin Grimsdell. The Group’s performance for the year
                                                                     was below budget and therefore no bonus was payable.
     Remuneration policy for
     Executive Directors
     In determining the remuneration policy for Executive            Executive Share Option scheme
     Directors, the Committee has considered a number of
                                                                     Tax approved and unapproved Executive Share Option
     factors including:
                                                                     Schemes (ESOS) are available to Executive Directors and
     l   the importance of attracting, retaining and motivating      Senior Managers. Options granted to Executive Directors
         management of the appropriate calibre to further the        under the terms of the 1996 Schemes, the renewed
         success of the business;                                    1996 Schemes and the 2010 Scheme are not normally
                                                                     exercisable until the third anniversary of the date of
     l   the linking of reward to both individual and business
                                                                     grant and subsisting options are subject to performance
         performance; and

                                                                                                                                  Remuneration Report

conditions with more testing performance conditions set
for options granted to Executive Directors. As a result of
                                                                                                        Executive Directors are also entitled to participate in the HM
the performance conditions set for the grant in 2008 that
matured in January 2011 none of the options were eligible                                               Revenue & Customs approved Savings-Related (SAYE) Share

for exercise and were all lapsed.                                                                       Option Scheme which is available to all UK employees. The
                                                                                                        scheme is subject to a cumulative maximum investment
The beneficial interests of the Executive Directors in options                                          of £250 per month for each individual. The share option
granted under the Executive Share Option Schemes is as                                                  runs for either three, five or seven years. At the end of
follows:                                                                                                the chosen period, the shares may be purchased by the
                                                                                                        employee at a 20% discount to the share price at the
                                                                                                        invitation date. The beneficial interests of the Executive
(1) 1996 Executive Share Option Schemes:                                                                Directors in share options granted under SAYE are as

                                       Granted during  Lapsed during Exercised during
           Exercise                    the year ended the year ended the year ended
              Price     1 April 2010   31 March 2011 31 March 2011 31 March 2011        31 March 2011
                                                                                                        1996 Savings-Related Share Option Schemes:
M Ashley
 (a) 252.57p 11,876                             -                -               -       11,876                                         Granted during  Lapsed during Exercised during
                                                                                                              Exercise                  the year ended the year ended the year ended
 (b) 252.57p              2,891                 -                -               -         2,891                 Price   1 April 2010   31 March 2011 31 March 2011 31 March 2011        31 March 2011

 (c)     49.6p 147,682                          -      147,682                   -               -      M Ashley
                                                                                                            42.25p       22,719                  -                -               -       22,719
C R Grimsdell
 (d)        50p         60,000                  -                -               -       60,000
                                                                                                        Exercise period: 1 March 2011 and 31 August 2011

Subject to the performance conditions being achieved the
options are exercisable between the following dates:                                                    No new share options were granted in the year however
                                                                                                        19,000 options were exercised during the year.
(a) 1 July 2008 and 30 June 2015
(b) 1 July 2008 and 30 June 2012
(d) 15 March 2013 and 14 March 2020                                                                     In addition, the ESOP Trust held 678,112 Ordinary Shares in
                                                                                                        the Company for beneficiaries including, inter alia, Directors
                                                                                                        and employees of the Company and its subsidiaries. The
(2) 2010 Executive Share Option Scheme:                                                                 Executive Directors, being members of a class of potential
                                                                                                        beneficiaries of the ESOP, are, to that extent, interested
                                     Granted during    Lapsed during Exercised during
       Exercise                      the year ended   the year ended the year ended                     in all the Company’s shares acquired by the ESOP and not
          Price         1 April 2010 31 March 2011    31 March 2011 31 March 2011 31 March 2011
M Ashley

(a) 50p               1,500,000                  -               -              - 1,500,000             The market price of the Company’s shares on 31 March
                      1,500,000                  -               -              - 1,500,000             2011 was 25.75p per Ordinary Share and the high and low
C R Grimsdell                                                                                           share prices during the year to 31 March 2011 were 41.66p
(a) 50p               1,140,000                  -               -              - 1,140,000             and 25.75p, respectively after adjusting for the 20p per
                      1,140,000                  -               -              - 1,140,000             share special dividend.

Subject to the performance conditions being achieved
the options are exercisable between 15 March 2013 and
14 March 2020.                                                                                          Pensions
                                                                                                        The Company pays contributions, which are based on
                                                                                                        a percentage of pensionable salary into the Executive
                                                                                                        Directors’ individual SIPP schemes. The Company’s
                                                                                                        contributions are set out in the table under the Directors’
                                                                                                        detailed emoluments.

     Remuneration Report

     Service agreements                                                                                     * from date of appointment on 1 October 2010
                                                                                                            ** Up to date of resignation on 23 September 2010.
     The service agreements for Mike Ashley and Colin Grimsdell
     are subject to twelve months and six months notice
     respectively on either side.
                                                                                                            Interests in contracts
                                                                                                            There were no contracts of significance subsisting during or
     Details of the employing company and dates of contract are
     as follows:                                                                                            at the end of the year in which a Director of the Company
                                                                                                            is or was materially interested other than those disclosed in
                                                                                                            Note 24.
     Director                       Date of                           Employing
                                    Contract                          Company
     Mr M Ashley                    1 October 2009                    Harvard International
                                                                      plc                                   Interests in shares
                                                                                                            The number of ordinary shares of the Company in which
     Mr C R Grimsdell 2 November 2009                                 Harvard International
                                                                                                            the Directors are beneficially interested at the date of this
                                                                                                            report are shown below:
                                                                                                                                  31 March 2011                  31 March 2010
     The Committee believes that in order to attract Executive
     Directors of the right calibre and to compete for talent with                                          M Ashley                 20,000                         20,000

     our competitors, it is necessary to offer service contracts                                            C R Grimsdell            80,000                         80,000

     with notice periods of no less than 6 months.                                                          B P Blow                 10,000                         10,000
                                                                                                            G Brady                          -                              -

     Apart from Daniel Harris, Non-Executive Directors do                                                   D B Harris           5,549,818                      5,549,818

     not have service contracts. Their re-appointment is                                                    A P Shearer                      -                              -

     considered every three years by the Board and, if the Board
     recommends such re-appointment, by the Company. The
                                                                                                            As at 7 July 2011 there had been no other alterations to the
     year when each Director was appointed is shown in the
                                                                                                            Directors’ interests since 31 March 2011.
     Directors’ biographies on pages 10 and 11. There are no
     compensation provisions for early termination of
     Non-Executive Director appointments.
                                                                                                            Approved by the Board and signed on its behalf:
                                                                                                            C R Grimsdell
                                                                                                            Group Finance Director and Company Secretary
     Directors’ detailed emoluments                                                                         27 July 2011

     The following table gives details of Directors’ remuneration
     for the period 1 April 2010 to 31 March 2011:

     Stated in £’000 sterling
                                  Base        Annual
                                Salary   Performance   Benefits       Pension    Year ended    Year ended
                                & Fees         Bonus    in kind Contributions 31 March 2011 31 March 2010

     Executive Directors
     M Ashley                   250               -      17            38           305            481
     C R Grimsdell              200               -      13            30           243            142
     Non-Executive Directors
     B P Blow                     65              -         -            -            65             95
     G Brady*                     20              -         -            -            20               -
     D B Harris                   30              -         -            -            30           201
     P Selway-Swift** 20                          -         -            -            20             40
     A P Shearer                  40              -         -            -            40             40
     Total                      625               -      30            68           723            999

                                                                               Corporate Governance

Principles of Corporate                                       discharge its duties, all Directors are given full and timely
                                                              access to all relevant information. In general, Board papers
Governance                                                    are circulated a week in advance of the Board meetings to
The Combined Code does not apply directly to companies        give Directors adequate time to prepare for the meeting
whose shares are traded on AIM. The Directors recognise,      and enable any Director who cannot attend the meeting to
however, the importance of high standards of corporate        have an opportunity to review the matters to be discussed.
governance and observe the requirements of the QCA            The Directors may seek independent advice at the expense
Guidelines and the Combined Code to the extent the            of the Company.
Directors consider appropriate having regard to the size,
nature and resources of the Group.                            The Board has undertaken an evaluation of its performance
                                                              using a formal process. A performance evaluation of the
                                                              Chairman was conducted by the Non-Executive Directors,
The Board                                                     taking into account the views of the Executive Directors.

The Board, which met seven times during the year, is
responsible for determining policy and business strategy,
                                                              Board Committees
setting financial and other performance objectives and
monitoring achievement. There is a formal schedule of         The Board has delegated authority to a number of
matters specifically reserved for decision by the Board.      committees to deal with matters in accordance with
                                                              written terms of reference, which are displayed on the
There is a clear division of roles between the Chairman       Company’s website The Chairman of
and Chief Executive. The Chairman has responsibility for      each of the Board committees attend the Annual General
the conduct of Company and Board meetings and for             Meeting to answer questions from shareholders.
ensuring that Directors are properly briefed to enable
full, constructive Board discussions. The Chief Executive
is required to develop and lead business strategies and       Audit Committee
processes for the furtherance of the Group.                   This comprises the Non-Executive Directors, Mr A P Shearer
                                                              FCA (Chairman), Mr G Brady and Ms B P Blow. Members
The Board currently consists of the Non-Executive             of the Audit Committee have broad financial experience
Chairman, two Executive Directors and three Non-Executive     which the Board considers appropriate to enable the
Directors. Their names and biographical details are set out   Committee to carry out its responsibilities.
on pages 10 and 11. Each new appointee to the Board
is required to stand for re-election at the next Annual       The Audit Committee, which reports to the Board, is
General Meeting following their appointment. In addition,     responsible for reviewing accounting policies and reporting
one third of the Board retires by rotation at each Annual     requirements, ensuring the maintenance of accounting
General Meeting and each Director stands for re-election at   systems and controls and ensuring that the audit processes
least once every three years.                                 are effective.

The Board believes that the Chairman and Non-Executive        The Committee monitors the controls that are in force
Directors, Mr A P Shearer and Mr G Brady are free from        and any perceived gaps in the control environment. It also
any business or other relationship which could materially     considers and determines relevant action in respect of any
interfere with the exercise of their independent judgement.   control issues raised by the external auditors.
The Chief Executive does not have any third party
directorships outside of the Group. The Finance Director      The Audit Committee met three times during the year. The
is a director of HC1091 Limited, a company connected to       external auditors and by invitation, the Finance Director
Burton Rugby Football Club. He receives no remuneration       attended all these meetings.
from this appointment.
                                                              The Audit Committee oversees the relationship with
To enable the Board to function effectively and allow it to   the external auditors. In managing this relationship the

     Corporate Governance

     Committee determines the scope of the non-audit services,        internal control, including financial, operational and
     which currently is limited to advisory and compliance work       compliance controls and risk management, to safeguard
     and company secretarial services. UHY Hacker Young LLP           shareholders’ investments and the Company’s assets.
     do not advise the Group in respect of taxation matters           It is acknowledged that any system of internal control
     or conduct due diligence assignments for potential               is designed to manage rather than eliminate risk and
     acquisitions and they are not auditors of the Company’s          that even the most effective system can only provide
     principal overseas subsidiaries. When considering the            reasonable, and not absolute, assurance against
     re-appointment of the Company’s external auditors before         misstatement or loss.
     making a recommendation to the Board to be put to
     shareholders the Committee reviewed and monitored                The Board requires all business units to operate appropriate
     the external auditor’s independence and objectivity and          and effective risk management processes to identify the
     the effectiveness of the audit process. Accordingly, the         key risks facing each division. These processes are designed
     Committee recommends the re-appointment of UHY                   to support the Group’s strategic direction and business
     Hacker Young LLP at the forthcoming Annual General               objectives. Responsibility for risk management rests with
     Meeting.                                                         line management and the Company endeavours to ensure
                                                                      that the appropriate infrastructure, controls, systems and
                                                                      processes are in place.
     Remuneration Committee
                                                                      The Directors confirm that they have carried out a review
     This comprises the Non-Executive Directors, Mr G Brady
                                                                      of the effectiveness of the Group’s systems of internal
     (Chairman), Ms B P Blow and Mr A P Shearer.
                                                                      control and risk management, the key features of which
     The principal duties of the Remuneration Committee,
     which met twice during the year, are to consider all
     aspects of Directors’ remuneration. Its policy is to establish
     remuneration packages, which enable the Company to               Management Structure
     attract, retain and motivate Directors with the necessary
                                                                      The Board has overall responsibility for the Group and
     skills and experience. The Remuneration Committee
                                                                      there is a formal schedule of matters specifically reserved
     considers that a part of Directors’ remuneration should
                                                                      for decision by the Board. Each Executive Director has
     be performance related and provides this through awards
                                                                      been given responsibility for specific aspects of the Group’s
     under the Executive Share Option Schemes and a cash
                                                                      affairs. The Executive Directors, together with key senior
     bonus scheme. Details of the remuneration policy are set
                                                                      executives, meet regularly to discuss day to day operational
     out in the Remuneration Report on pages 14 to 16.

     Nomination Committee                                             Identification of Business Risks
     This comprises Directors Ms B P Blow (Chairman), Mr A P
                                                                      The Board is responsible for identifying the major
     Shearer and Mr M Ashley. This committee, which reports
                                                                      business risks faced by the Group and for determining the
     to the Board, is primarily responsible for the appointment
                                                                      appropriate course of action to manage those risks. The
     of Directors and succession planning. The committee held
                                                                      Executive Directors regularly monitor the Group’s financial
     one meeting during the year to consider the appointment
                                                                      performance and cash flow. Each year the Board approves
     of Geoff Brady as Non-Executive Director.
                                                                      the annual budget and performance is monitored and
                                                                      relevant action is taken during the year through regular
                                                                      reporting to the Board of variances from the budget.
     Internal Control and Risk                                        The process is reviewed on a regular basis by the Audit

     Management                                                       Committee.

     The Board has overall responsibility for the system of

                                                                                  Corporate Governance

Investment Appraisal                                             in employment and this policy extends to employees and
                                                                 applicants for employment. Every effort is made to ensure
Capital expenditure is regulated by a budgetary process          that applications for employment from disabled persons are
and authorisation levels. For expenditure beyond specific        fully and fairly considered having regard to their particular
levels, proposals have to be submitted to the Board. Due         aptitudes and abilities and that disabled employees have
diligence work is carried out if a business is to be acquired.   equal opportunity in training, career development and
                                                                 promotion. In the event of an existing employee becoming
                                                                 disabled, every effort is made to ensure that their
Insurances                                                       employment by the Group continues and that appropriate
                                                                 adjustments and training are provided.
The Company maintains insurance cover with reputable
insurers and works closely with brokers, underwriters and
                                                                 A Stakeholder Pension Plan, established in July 2005,
their consultants on risk management policies and controls.
                                                                 offers money purchase benefits and provides flexibility and
                                                                 significant fund choice to members by giving them control
                                                                 over an individual contract in their own name. The Group’s

Corporate Social Responsibility                                  overseas subsidiaries provide mandatory pension scheme
                                                                 facilities for their eligible employees.
The Group is committed to operating in a socially and
environmentally responsible manner.                              Community
                                                                 The Group recognises its responsibilities towards the
                                                                 communities in which its businesses operate. In the UK
Code of Conduct                                                  support is provided to Ovarian Cancer Action, the UK’s
During the year the Group has adopted a Code of Conduct          leading ovarian cancer charity. Members of staff participate
and Business Ethics that contains general guidelines for         in fund raising activities and are permitted to seek
conducting the business of the Group consistent with the         sponsorship from colleagues and business contacts. Our UK
highest standards of business ethics. The Code of Conduct        Consumer Electronics business is playing a significant part
sets out the principles of the Group’s business ethics and       in the Government’s Targeted Help Scheme which assists
is intended to assist and guide employees in meeting             older and disabled people with the official switchover of TV
the high standards of personal and professional integrity        in the UK from analogue to digital. In addition, the Group
required of them. The Code of Conduct also contains the          has developed a “Text to Speech” STB with the Royal
group’s anti-corruption policy and a Whistleblowing policy       National Institute for the Blind which enhances the usability
has also been adopted by the Group.                              and enjoyment of TV for those with sight impairments
                                                                 through having the TV “read” programme guides and
                                                                 other essential information.

The Board is committed to maintaining a working
environment where members of staff are individually
                                                                 Health and Safety
valued and recognised, and appreciates its responsibility        The Group recognises and accepts its responsibilities for
to encourage and assist in the employment, training,             health, safety and the environment.
promotion and personal career development of all
employees without prejudice. The Group assists its               The Group is committed to ensuring the provision of
employees in achieving an appropriate work/life balance,         adequate systems for the health, safety and welfare of
including policies on maternity and paternity leave,             employees and others by ensuring the provision of the
emergency time off and flexible working where possible.          highest standards in the management and control of
It is the Group’s policy to promote equal opportunities          operations. Although legal standards will be applied as

     Corporate Governance

     a minimum requirement, the Group will always strive to
     achieve best practice in all areas of health and safety.
                                                                     The Group, which is not directly involved in any
     During the year under review there were no incidents            manufacturing processes, seeks to develop long-term
     requiring completion of a RIDDOR form (Reporting of             business relationships with its suppliers who are required to
     Injuries, Diseases, and Dangerous Occurrences Regulations       adhere to business principles consistent with the Group’s.
     1995).                                                          We expect them to adopt and implement acceptable
                                                                     safety, environmental, product quality, labour, human
                                                                     rights, and legal standards in line with these standards.
                                                                     Our employees are expected to work with our suppliers
     Environment                                                     to develop long-term relationships to benefit both parties
     The Group seeks to minimise the environmental impact            with the aim of improving the quality, environmental
     of its activities and aims to operate in accordance with        performance and sustainability of goods and services.
     the standards required by law, codes of best practice and
     issued guidelines. It takes a constructive and responsible      In addition to quality assurance issues, factory
     stance in relation to its compliance obligations. As the        audits incorporate reports on social compliance and
     Group’s manufacturing is outsourced, the Board considers        environmental matters with specific requirements relating
     its own activities to be relatively low risk in environmental   to employment conditions based on the Ethical Trading
     terms. In relation to its “producer” responsibilities for       Initiative (ETI Base Code) and local laws and regulations.
     collection and recycling of electrical and electronic
     equipment, it became a founder member of REPIC
     (Recycling Electrical Producers Industry Consortium), an
                                                                     Relations with Shareholders
     association whose principal object is to assist its members
     to fulfil their obligations under the Waste Electrical and      Presentations by the Chief Executive and Financial Director
     Electronic Equipment (“WEEE”) Regulations. The Group has        to institutional shareholders and City analysts are made on
     also responded, independently and through its membership        the issue of full year and interim results and as and when
     of INTELLECT, the UK Technology Industry Trade Body,            considered appropriate by the Board or the Company’s
     to the relevant consultative papers and through on going        advisers.
     discussions between Government officials and the Industry
     in relation to the development of the legislation on WEEE,      All shareholders are invited to attend the Company’s
     the Restriction of Hazardous Substances in Electrical           Annual General Meeting each year and have the
     and Electronic Equipment (“RoHS”), the Registration,            opportunity to put questions to the Board. The Chairman
     Evaluation, Authorisation of Chemical Substances                of the Audit, Remuneration and Nomination Committees
     (“REACH”), the Batteries Directive and the Eco-design           will also be available at the forthcoming Annual General
     requirements for Energy-Using Products (“EuP”) Directives.      Meeting to answer shareholders’ questions.

     A considerable amount of protective packaging is required
     to ensure the safe distribution of the Group’s range            By Order of the Board
     of consumer products. Management actively reviews               C R Grimsdell
     the amount of material used and optimises recycling             Group Finance Director and Company Secretary
     opportunities. We are members of Wastepack, a leading           27 July 2011
     Compliance Scheme in the UK, which takes over its
     members’ statutory obligations to recover and recycle
     packaging waste in proportion to the packaging materials
     a member handles in their business.

                                                                  Independent Auditors’ Report

Independent Auditors’ Report                                     Opinion on financial statements
                                                                 In our opinion:
to the members of Harvard
International plc                                                = the financial statements give a true and fair view of the
                                                                    state of the group’s and of the parent company’s
We have audited the financial statements of Harvard
                                                                    affairs as at 31 March 2011 and of the group’s profit
International plc for the year ended 31 March 2011 which
                                                                    for the year then ended;
comprise the Consolidated and Company Statements of
                                                                 = the group financial statements have been properly
Financial Position, the Consolidated Income Statement,
                                                                    prepared in accordance with IFRSs as adopted
the Consolidated Statement of Comprehensive Income,
                                                                    by the European Union; and
the Consolidated and Company Statements of Cash Flow,
                                                                 = the parent company financial statements have been
the Consolidated and Company Statements of Changes
                                                                    properly prepared in accordance with IFRSs as adopted
in Equity and the related notes. The financial reporting
                                                                    by the European Union and as applied in accordance
framework that has been applied in their preparation
                                                                    with the provisions of the Companies Act 2006; and
is applicable law and International Financial Reporting
                                                                 = the financial statements have been prepared in
Standards (IFRSs) as adopted by the European Union
                                                                    accordance with the requirements of the Companies
and, as regards the parent company financial statements,
                                                                    Act 2006
as applied in accordance with the provisions of the
Companies Act 2006.
                                                                 Opinion on other matters prescribed by the
                                                                 Companies Act 2006
This report is made solely to the company’s members, as
                                                                 In our opinion the information given in the Directors’ Report
a body, in accordance with Chapter 3 of Part 16 of the
                                                                 for the financial year for which the financial statements are
Companies Act 2006. Our audit work has been undertaken
                                                                 prepared is consistent with the financial statements.
so that we might state to the company’s members
those matters we are required to state to them in an
                                                                 Matters on which we are required to report by
auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
                                                                 We have nothing to report in respect of the following
responsibility to anyone other than the company and the
                                                                 matters where the Companies Act 2006 requires us to
company’s members as a body, for our audit work, for this
                                                                 report to you if, in our opinion:
report, or for the opinions we have formed.

                                                                 = adequate accounting records have not been kept by the
Respective responsibilities of Directors and Auditors
                                                                    parent company, or returns adequate for our audit
As explained more fully in the Directors’ Responsibilities
                                                                    have not been received from branches not visited by us;
Statement set out on page 12, the directors are responsible
for the preparation of the financial statements and for
                                                                 = the parent company financial statements are not in
being satisfied that they give a true and fair view. Our
                                                                    agreement with the accounting records and returns; or
responsibility is to audit and express an opinion on the
                                                                 = certain disclosures of directors’ remuneration specified
financial statements in accordance with applicable law and
                                                                    by law are not made; or
International Standards on Auditing (UK and Ireland). Those
                                                                 = we have not received all the information and
standards require us to comply with the Auditing Practices
                                                                    explanations we require for our audit.
Board’s (APB’s) Ethical Standards for Auditors.

                                                                 Colin Wright (Senior Statutory Auditor)
Scope of the audit of the financial statements
                                                                 For and on behalf of UHY Hacker Young,
A description of the scope of an audit of financial statements
                                                                 Statutory Auditor
is provided on the APB’s website at
                                                                 Quadrant House
                                                                 4 Thomas More Square
                                                                 London E1W 1YW

                                                                 27 July 2011

     Consolidated Income Statement

                                                                                 Year ended    Year ended
                                                                                   31 March     31 March
                                                                                       2011          2010
                                                                      Notes       £’millions     £’millions

     Revenue                                                                 2       61.2            77.4
     Cost of sales                                                                  (52.4)          (65.2)
     Gross profit                                                                     8.8            12.2
     Net operating expenses                                                  3       (8.1)          (11.0)
     Operating profit                                                                 0.7             1.2
     Finance income (net)                                                    4        0.2             0.2
     Profit before tax                                                       5        0.9             1.4
     Taxation                                                                7       (0.5)            (0.7)
     Profit for the period from continuing operations                                 0.4             0.7
     Loss for the period from discontinued operations                        8           -            (5.7)
     Profit/(loss) for the period                                                     0.4             (5.0)
     Attributable to:
     Equity holders of the parent                                                     0.4             (5.0)
     Earnings per share (in pence)                                           9
             - continuing operations                                                  0.7p             1.5p
             - discontinuing operations                                                  -          (11.3)p
             - total                                                                  0.7p            (9.8)p
            - continuing operations                                                   0.7p             1.5p
             - discontinuing operations                                                  -          (11.3)p
             - total                                                                  0.7p            (9.8)p

     Consolidated Statement of Comprehensive Income

     Profit/(loss) for the period                                                     0.4             (5.0)
     Other comprehensive income
     Exchange differences on translation of overseas operations                          -            0.4
     Exchange difference on disposal                                                     -            (0.2)
     Other comprehensive income net of tax                                               -             0.2
     Total comprehensive income (all attributable to owners of the parent)            0.4             (4.8)

                                Consolidated Statement of Financial Position

                                                      31 March     31 March
                                                           2011        2010
                                         Notes        £’millions   £’millions
Non-current assets
   Property, plant and equipment           11               0.5          0.7
   Total non-current assets                                 0.5          0.7
Current assets
   Inventories                             13               7.2          4.4
   Trade and other receivables             14              13.0          5.6
   Income tax recoverable                                      -         0.1
   Cash and cash equivalents                               13.5        28.9
   Total current assets                                    33.7        39.0
Total assets                                               34.2        39.7
Current liabilities
   Trade and other payables                16              13.7          9.7
   Income tax payable                                       0.4             -
   Provisions for liabilities              17               0.5          0.7
   Total current liabilities                               14.6        10.4
Total liabilities                                          14.6        10.4
Net assets                                                 19.6        29.3
Equity attributable to equity holders of the parent
   Share capital                           19               5.1          5.1
   Share premium                           20               3.2          3.2
   Capital redemption reserve              20              15.4        15.4
   Investment in own shares                20              (2.3)        (2.3)
   Translation reserve                     20              (7.6)        (7.6)
   Share based payment reserve             20               0.5          0.7
   Retained earnings                       20               5.3        14.8
Total equity                                               19.6        29.3

     Company Statement of Financial Position

                                                                31 March     31 March
                                                                     2011        2010
                                                       Notes    £’millions   £’millions
     Non-current assets
        Investments                                        12         1.6          1.6
        Total non-current assets                                      1.6          1.6
     Current assets
        Trade and other receivables                        14        56.9        68.6
        Total current assets                                         56.9        68.6
     Total assets                                                    58.5        70.2
     Current liabilities
        Trade and other payables                           16        26.7        26.7
        Total current liabilities                                    26.7        26.7
     Total liabilities                                               26.7        26.7
     Net assets                                                      31.8        43.5
     Equity attributable to equity holders of the parent
        Share capital                                      19         5.1          5.1
        Share premium                                      20         3.2          3.2
        Capital redemption reserve                         20        18.1        18.1
        Investment in own shares                           20        (2.3)        (2.3)
        Share based payment reserve                        20         0.5          0.7
        Retained earnings                                  20         7.2        18.7
     Total equity                                                    31.8        43.5

     The accounts on pages 22 to 53 were approved by
     the Board of Directors on 27 July 2011
     and signed on its behalf by:
     M Ashley       Director
     C Grimsdell Director
     Company Registration Number 00756128

     Consolidated and Company Statements of Changes in Equity

                                       Share        Capital   Investment                  Share based
                           Share    premium     redemption        in own    Translation      payment     Retained
                          capital    account        reserve        shares       reserve        reserve   earnings    Total
Group                      (£’m)        (£’m)         (£’m)         (£’m)         (£’m)          (£’m)      (£’m)    (£’m)

At 1 April 2010              5.1         3.2          15.4         (2.3)         (7.6)            0.7       14.8     29.3
Transactions with
Dividends Paid                  -           -             -             -             -              -    (10.1)    (10.1)
Transfer relating to
lapsed options                  -           -             -             -             -         (0.2)        0.2         -
Total transactions with
owners                          -           -             -             -             -         (0.2)       (9.9)   (10.1)
Profit for the period           -           -             -             -             -              -       0.4      0.4
Other comprehensive
Exchange difference on
disposal                        -           -             -             -             -              -          -        -
Exchange differences on
translation of overseas
operations                      -           -             -             -             -              -          -        -
Total comprehensive
income                          -           -             -             -             -              -       0.4      0.4
At 31 March 2011             5.1         3.2          15.4         (2.3)         (7.6)            0.5        5.3     19.6

At 1st April 2010            5.1         3.2          18.1         (2.3)              -           0.7       18.7     43.5
Transactions with
Dividends paid                                                                                            (10.1)    (10.1)

Transfer relating to
lapsed options                  -           -             -             -             -         (0.2)        0.2         -
Total transactions
with owners                     -           -             -             -             -         (0.2)       (9.9)   (10.1)
Total comprehensive
income - Loss for               -           -             -             -             -              -      (1.6)    (1.6)
At 31 March 2011             5.1         3.2          18.1         (2.3)              -           0.5        7.2     31.8

     Consolidated and Company Statements of Changes in Equity

                                            Share        Capital   Investment                  Share based
                                Share    premium     redemption        in own    Translation      payment     Retained
                               capital    account        reserve        shares       reserve        reserve   earnings   Total
     Group                      (£’m)        (£’m)         (£’m)         (£’m)         (£’m)          (£’m)      (£’m)   (£’m)

     At 1 April 2009              5.1         3.2          15.4         (2.3)         (7.8)            1.1       19.4    34.1
     Transactions with
     Transfer relating to
     lapsed options                  -           -             -             -             -         (0.4)        0.4        -
     Total transactions with
     owners                          -           -             -             -             -         (0.4)        0.4        -
     Loss for the period             -           -             -             -             -              -      (5.0)   (5.0)
     Other comprehensive
     Exchange difference on
     disposal                        -           -             -             -        (0.2)               -          -   (0.2)
     Exchange differences on
     translation of overseas
     operations                      -           -             -             -          0.4               -          -    0.4
     Total comprehensive
     income                          -           -             -             -          0.2               -      (5.0)   (4.8)
     At 31 March 2010             5.1         3.2          15.4         (2.3)         (7.6)            0.7       14.8    29.3

     At 1st April 2009            5.1         3.2          18.1         (2.3)              -           1.1       22.0    47.2
     Transactions with
     Transfer relating to
     lapsed options                  -           -             -             -             -         (0.4)        0.4        -
     Total transactions
     with owners                     -           -             -             -             -         (0.4)        0.4        -
     Total comprehensive
     income - Loss for               -           -             -             -             -              -      (3.7)   (3.7)
     At 31 March 2010             5.1         3.2          18.1         (2.3)              -           0.7       18.7    43.5

                                        Consolidated Statement of Cash Flows

                                                                  Year ended    Year ended
                                                                    31 March     31 March
                                                                        2011          2010
                                                       Notes       £’millions     £’millions

Cash flow from operating activities
Cash used by operations                                  21             (6.0)          (5.4)
Tax paid                                                                    -          (0.4)
Net cash used in operating activities                                   (6.0)          (5.8)
Cash flows from investing activities
Interest received                                                        0.2            0.2
Purchase of property, plant and equipment                                  -           (0.1)
Sale of discontinued activities (net)                     8(ii)          0.5          10.0
Net cash from investing activities                                       0.7          10.1
Cash flows from financing activities
Dividends paid                                                        (10.1)               -
Net cash used in financing activities                                 (10.1)               -
Net (decrease)/increase in cash and cash equivalents                  (15.4)            4.3
Net foreign exchange differences                                           -           (0.1)
Cash and cash equivalents at beginning of year                         28.9           24.7
Cash and cash equivalents at end of year                               13.5           28.9

     Company Statement of Cash Flows

                                                                        Year ended                Year ended
                                                                          31 March                 31 March
                                                                              2011                      2010
                                                                         £’millions                 £’millions

         Loss for the year                                                    (1.6)                      (3.7)
         Provision against amounts due
         from subsidiaries                                                    1.6                        0.6
         Impairment of investments in subsidiaries                               -                       1.5
         Operating loss                                                          -                       (1.6)
         Decrease in payables                                                    -                          -
         Decrease in amounts owed by subsidiaries                            10.1                        1.6
         Net cash used in operating activities                               10.1                           -
         Cash flows from financing activities                                    -                          -
         Dividends paid                                                     (10.1)                          -
         Net cash used in financing activities                              (10.1)                          -
         Net increase in cash and cash equivalents                               -                          -
         Cash and cash equivalents at beginning of year                          -                          -
         Cash and cash equivalents at end of year                                -                          -

         The Company did not have any borrowings or cash and cash equivalents at the end of the
         year (2010 : £Nil)

                                                                                   Notes to the Accounts

1 Principal Accounting Policies                                   acquisition over the fair values of the identifiable net assets
                                                                  acquired is recognised as goodwill. Any deficiency of the
Accounting policies                                               cost of acquisition below the fair values of identifiable net
                                                                  assets acquired is credited to the income statement in the
The Group has adopted the accounting policies set out
                                                                  period of acquisition.
below in preparation of these financial statements. All of
these policies have been applied consistently throughout
the periods presented in these financial statements unless
otherwise stated.
                                                                  Revenue which excludes value added tax and sales
                                                                  between Group companies, represents the invoiced
Basis of preparation                                              value of goods sold in the period. Revenues are
                                                                  recognised at the point when the goods are dispatched
These financial statements have been prepared in
                                                                  to the customer.
accordance with International Financial Reporting
Standards, as adopted by the European Union (‘IFRS’) and
International Financial Reporting Interpretations Committee
(IFRIC) interpretations and with those parts of the
Companies Act 2006 applicable to companies reporting              The tax expense represents the sum of the corporation
under IFRS. The Parent Company’s financial statements             tax currently payable and the deferred tax charge.
have also been prepared in accordance with IFRS and in
accordance with the Companies Act 2006. The Directors             The corporation tax currently payable is based on taxable
have taken advantage of the exemption offered by section          profit for the period. Taxable profit differs from profit
408 of the Companies Act 2006 not to present a separate           before tax as reported in the income statement because
income statement for the Parent Company.                          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.
Basis of consolidation
                                                                  Deferred tax is the tax expected to be payable or
The financial information consolidates the financial
                                                                  recoverable on differences between the carrying amounts
information of Harvard International plc and its subsidiary
                                                                  of assets and liabilities in the financial statements and
undertakings. The financial statements of subsidiaries are
prepared for the same reporting period as the parent              the corresponding tax bases used in the computation of

company using consistent accounting policies.                     taxable profit, and is accounted for using the balance
                                                                  sheet liability method. Deferred tax liabilities are generally

Subsidiaries                                                      recognised for all taxable temporary differences and
                                                                  deferred tax assets are recognised to the extent that it
Subsidiaries are entities over which the Group has control,       is probable that taxable profits will be available against
being the power to govern the financial and operating             which deductible temporary differences can be utilised.
policies of the acquired entity so as to obtain benefits
from its activities. The results of subsidiaries acquired         The carrying amount of deferred tax assets is reviewed at
or sold in the year are consolidated from the effective           each year end date and reduced to the extent that it is
date of acquisition or to the effective date of disposal          no longer probable that sufficient taxable profits will be
as appropriate.                                                   available to allow all or part of the asset to be recovered.
                                                                  Deferred tax is calculated at the average tax rates that
The purchase method of accounting is used to account              are expected to apply in the periods in which the timing
for the acquisition of subsidiaries by the Group. On              differences are expected to reverse based on tax rates and
acquisition, the assets, liabilities and contingent liabilities   laws that have been enacted by the year end date.
of a subsidiary are measured at their fair values at the date     Current and deferred tax are recognised in the income
of acquisition. Any excess of the fair value of the cost of

     Notes to the Accounts

     statement, except when the tax relates to items charged
     or credited directly in equity, in which case the tax is also
     recognised in equity.                                           Inventories are stated at the lower of cost and net
                                                                     realisable value. Cost represents all direct costs incurred
                                                                     in bringing stocks to their current condition and location
     Share based payments                                            including an appropriate proportion of overheads and is
                                                                     calculated on a first-in, first-out basis.
     The Group issues equity-settled share-based payments to
     certain employees (including Directors). The fair value of
     these payments is calculated by the Group using where
     appropriate either the Black Scholes or Monte Carlo option
     pricing model. The expense is recognised on a straight line     The Parent Company’s investments in subsidiary companies
     basis over the period from the date of award to the date of     are shown at cost less provision for any impairment.
     vesting, based on the Group’s best estimate of shares that
     will eventually vest.
                                                                     Trade receivables
                                                                     Trade receivables are initially recognised at their fair
     Property, plant and equipment                                   value. Appropriate allowances for estimated irrecoverable
     Property, plant and equipment are stated at cost less           amounts are recognised in profit or loss when there is
     depreciation.                                                   objective evidence that the asset is impaired. The allowance
                                                                     recognised is measured as the difference between
     Assets are depreciated over their expected useful lives on a    the asset’s carrying amount and the estimated future
     straight line basis as follows:-                                recoverable amount.

     Leasehold improvements over the term of the lease.
                                                                     Foreign Currencies
     Furniture, fixtures and equipment 15 per cent per annum.
                                                                     (i) Functional and presentational currency

     Motor vehicles 25 per cent per annum.
                                                                     Items included in the financial statements of each of
                                                                     the Group’s entities are measured using the currency of

     Investment Properties                                           the primary economic environment in which the entity
                                                                     operates (the functional currency). The consolidated
     Investment properties, comprised freehold and leasehold         financial statements are presented in Sterling, which is the
     land and buildings, which were held for long term rental        Company’s functional and presentational currency.
     yields and were not occupied by the Group. All investment
     properties were sold in the prior year.                         (ii) Transactions and balances

     Investment property was recorded at fair value, measured        Transactions denominated in foreign currencies are
     by independent professionally qualified valuers, who hold       translated into Sterling at contracted rates or, where
     a recognised and relevant professional qualification and
                                                                     no contract exists, at average monthly rates.
     have recent experience in the location and category of the
                                                                     Monetary assets and liabilities denominated in foreign
     investment property being valued. Valuations were carried
                                                                     currencies which are held at the year end are translated
     out on an annual basis or more frequently, with reference
                                                                     into Sterling at the year end exchange rates. Exchange
     to current market conditions. Unrealised gains and losses
                                                                     differences on monetary items are taken to the
     were recognised in the income statement.

                                                                                  Notes to the Accounts

income statement, except when deferred in equity as
qualifying cash flow hedges or qualifying net investment
hedges. Translation differences on any non-monetary items        Assets held under operating leases are not reported in
are reported as part of the fair value gain or loss.             the balance sheet. Assets held under finance leases are
                                                                 capitalised at the fair value of the asset with an equivalent
(iii) Group companies                                            liability categorised as appropriate under creditors due
                                                                 within or after one year. The asset is depreciated over
The balance sheets of overseas subsidiary undertakings           the shorter of the lease term and its useful economic
are translated into Sterling at the rate of exchange ruling      life. Finance charges are allocated to accounting periods
at the year end date. Profits and losses of overseas             over the period of the lease to produce a constant rate of
subsidiary undertakings are expressed in Sterling utilising      return on the outstanding balance. Rentals are apportioned
average monthly rates. Exchange differences arising on           between finance charges and reduction of the liability, and
the translation of the opening shareholders’ funds are           allocated to cost of sales and other operating expenses as
recognised as a separate component of equity, within             appropriate. Rentals under operating leases
the translation reserve.                                         are charged on a straight-line basis over the lease term.
                                                                 Hire purchase transactions are dealt with similarly except
On consolidation, exchange differences arising from              that assets are depreciated over their useful lives.

the retranslation of the net investment in foreign
                                                                 When assets are leased out under an operating lease, the
entities, and of borrowings designated as hedges of
                                                                 asset is included in the balance sheet based on the nature
such investments, are taken to shareholders’ equity.
                                                                 of the asset. Rental income from these leases is recognised
When a foreign operation is sold, such exchange
                                                                 on a straight line basis over the term of the lease.
differences are recognised in the income statement
as part of the gain or loss on sale.

Borrowing costs                                                  Group companies contribute to defined contribution
                                                                 pension schemes on behalf of the Directors and other
The Group capitalises borrowing costs, being interest
                                                                 members of staff. Costs are charged to the income
on bank import advances, relating to the purchase of
                                                                 statement as incurred.
inventories. The capitalisation rate is based on an estimate
of inventory transit times and a weighted average of the
borrowing costs.
                                                                 Treasury shares
                                                                 The Group has previously purchased some of its own
Debt instruments                                                 shares. The consideration paid for the Group’s own shares
                                                                 was recognised as a deduction from shareholders’ funds as
Loans and borrowings are initially recognised at a fair
                                                                 a separate reserve, “Investment in own shares”, which also
value of the consideration received less directly attributable
                                                                 includes shares held in the Group’s ESOP Trust. The issue
issue costs.
                                                                 of the shares from the ESOP Trust is accounted for as a
                                                                 reserve movement.
Loans and borrowings are subsequently measured at
amortised cost using the effective interest rate method.

Trade payables
Trade payables are not interest bearing and are stated at
their face value.

     Notes to the Accounts

     Derivative financial instruments                               disposed of or classified as held for sale, and represent a
                                                                    separate major line of business or are part of a single
     Financial assets and financial liabilities that arise on       co-ordinated plan to dispose of a separate major line of
     derivatives that do not qualify for hedge accounting are       business. Cash generating units forming part of a single
     held on the statement of financial position at fair value      co-ordinated plan to dispose of a separate major line of
     with the changes in value reflected through the income         business are classified within the continuing operations
     statement. The accounting treatment of derivatives that
                                                                    until they meet the criteria to be held for sale.
     qualify for hedge accounting depends on how they
     are designated. The varying accounting treatments are
                                                                    The post-tax profit or loss of the discontinued operation is
     explained below:-
                                                                    classified as a single line on the face of the Consolidated
                                                                    Income Statement, together with any post-tax gain or loss
     (i) Cash flow hedges
                                                                    recognised on the re-measurement to fair value less cost
                                                                    to sell or on the disposal of the assets or disposal group
     The Group hedges the foreign currency exposure on
                                                                    constituting the discontinued operation.
     inventory purchases. Under IAS 39, derivative financial
     instruments that qualify for cash flow hedging are
                                                                    On changes to the composition of the groups of units
     recognised on the balance sheet at fair value with
                                                                    comprising discontinued operations, the presentation of
     corresponding fair value changes deferred in equity
                                                                    discontinued operations within prior periods is restated to
     within the hedging reserve to be transferred to the
                                                                    reflect consistent classification of discontinued operations
     income statement in the period during which the
                                                                    across all periods presented.
     exchange movement on the hedged item is recognised
     in the income statement.

     (ii) Net investment hedges
                                                                    New standards and
                                                                    interpretations not applied
     The gains or losses on the translation of currency             At the date of approval of these financial statements,
     borrowings and cross currency swaps used to hedge the          the IASB and IFRIC have a number of new standards,
     Group’s net investments in foreign entities are recognised     amendments and interpretations in issue with an effective
     in equity within the hedging reserve to be transferred to      date after the date of these financial statements.
     the income statement in the period during which the
     exchange movement on the hedged item is recognised in          Of these, only the following are expected to be relevant to
     the income statement.                                          the Group:
                                                                                                                     Effective date -
                                                                                                                   financial periods
     Warranty provision                                                                                        beginning on or after
                                                                    IFRS 9     Financial Instruments:                   1 January 2013
     A provision is made in the period of sale to cover the
                                                                               Classification & Measurement
     estimated future liability for warranty returns and the
     associated costs. Costs actually incurred are charged          IAS 24     Related Party Disclosures                1 January 2011
     against this provision. Costs in excess of the provision are
     recognised directly through the income statement whilst        IFRIC 14   Amendment: Prepayments of a              1 January 2011
     any over provision of these costs is released through                     Minimum Funding Requirement
     the income statement where such costs are lower than
                                                                    The Directors do not anticipate that the adoption of
                                                                    these standards and interpretations will have a material

     Discontinued operations                                        impact on the Group’s financial statements in the period of
                                                                    initial application.
     Discontinued operations represent cash generating units
     or groups of cash generating units that have either been

                                                                                             Notes to the Accounts

Critical accounting estimates and                                          for future warranty claims based on historic warranty claim
                                                                           information, as well as recent trends that might suggest
judging                                                                    past cost information may differ from future claims. Factors
The Group makes estimates and assumptions concerning                       that could impact the estimated claim information include
the future. The resulting accounting estimates will, by                    the success of the Group’s quality initiatives, as
definition, seldom equal the related actual results. The                   well as parts and labour costs.
estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of                The Group makes provisions against the carrying value of
assets and liabilities within the next financial year                      stock where it is likely this is above the net realisable value
relate to warranty claims and stock provisions.                            based on management estimates of the likely sales price.
                                                                           Factors that could impact this pricing include the speed of
The Group generally offers one year warranties on its                      change of technology and movement in replacement costs.
products. Management estimates the related provision

2 Segmental Reporting
Revenue and segmental profit has been disclosed by three operating segments of UK Digital, UK other CE and Rest of the
World CE in the manner that the information is presented to the Board of Directors (being the ‘Chief Operating Decision
Makers’) in accordance with IFRS8.

Continuing Operations:
                                      Year ended 31st March 2011                                  Year ended 31st March 2010
                                                      Rest of the                                                  Rest of the
                           UK Digital UK other CE      World CE              Total     UK Digital  UK other CE      World CE            Total
                           £’millions     £’millions   £’millions        £’millions    £’millions      £’millions   £’millions      £’millions
External sales                   25.6             22.4           13.2         61.2          30.9             30.2           16.3        77.4
Inter-segment sales                  -                -              -            -             -                -              -             -
Segment profit                     3.7             1.8            3.0          8.5            5.1             2.4            4.5        12.0
Total assets                     14.8             12.9            6.5         34.2          17.3             17.2            4.7        39.2 *
Total liabilities                 (7.4)            (6.3)         (0.9)       (14.6)          (4.7)            (4.8)         (0.9)      (10.4)
Total net assets                   7.4             6.6            5.6         19.6          12.6             12.4            3.8        28.8
Capital expenditure                  -                -              -            -           0.1                -              -         0.1
Depreciation charge                0.1             0.1               -         0.2            0.1             0.1            0.1          0.3

* Total assets at 31 March 2010 exclude £0.5m for expected earnout from the Grundig disposal (see note 8) as this relates to a discontinued

Segment figures can be reconciled to the corresponding Group figures as follows:
                                                                                                       Year ended             Year ended
                                                                                                    31 March 2011          31 March 2010
                                                                                                        £’millions              £’millions

Segment profit                                                                                                8.5                    12.0
Overheads not allocated to segments                                                                          (7.8)                  (10.8)
Group operating profit                                                                                        0.7                     1.2

     Notes to the Accounts

     The geographical analysis of turnover of continuing operations by geographical location of customer is as follows:
                                                                                                  Year ended                Year ended
                                                                                               31 March 2011             31 March 2010
                                                                                                   £’millions                 £’millions
     United Kingdom                                                                                     47.9                       61.1
     Australia                                                                                          13.2                       15.0
     Rest of Europe                                                                                      0.1                        1.3
                                                                                                        61.2                       77.4

     The geographical location of non-current assets of continuing operations is as follows:
                                                                                                  Year ended                Year ended
                                                                                               31 March 2011             31 March 2010
                                                                                                   £’millions                 £’millions
     United Kingdom                                                                                      0.3                        0.4
     Australia                                                                                           0.1                        0.1
     Hong Kong                                                                                           0.1                        0.2
                                                                                                         0.5                        0.7

     One UK customer represents 24% (2010 : 16%) of total Group revenue during the year. Revenue from this customer is
     included in both UK Digital and UK other CE segments.

                                                                       Year ended                                            Year ended
                                      Continuing     Discontinued        31 March        Continuing     Discontinued          31 March
                                      operations       operations            2011        operations       operations               2010
     3 Net Operating Expenses          £’millions       £’millions      £’millions        £’millions        £’millions         £’millions
     Selling and distribution                2.5                 -            2.5               4.1              0.3                4.4
     Administration                          5.6                 -            5.6               6.9              6.0               12.9
                                             8.1                 -            8.1              11.0              6.3               17.3

                                                                                    Notes to the Accounts

                                                                                                      Year ended       Year ended
                                                                                                        31 March        31 March
                                                                                                            2011             2010
4 Finance costs/income                                                                                 £’millions        £’millions

Finance costs comprise:
Interest on bank loans and overdrafts repayable
    within 5 years                                                                                              -                  -
Finance income comprises:
Bank interest receivable                                                                                     0.2              0.2

5 Profit/(loss) before tax is stated after charging/(crediting)

Directors’ emoluments                                                                                        0.7              1.2
Auditors’ remuneration
    Audit services        – UK (Parent Company’s auditors)                                                   0.1              0.1
                          – Overseas                                                                         0.1              0.1
Depreciation of fixed assets:
    Owned                                                                                                    0.2              0.3
Operating lease payments under property leases                                                               0.4              0.4
Operating leases payments for plant and machinery                                                              -              0.2
Research and development costs                                                                               0.5             (0.4)
Foreign exchange gain                                                                                       (0.9)            (2.4)

As permitted by section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented as
part of the accounts. Loss after taxation for the year of £1.6 million (2010 : £3.7 million) has been dealt with in the accounts
of the Company. There are no items of income or expense other than those reported in the income statement and therefore
an Income Statement has not been produced for the Company.

The Parent Company’s auditors received fees for non audit services totalling £6,410 (2010 : £52,675), including £nil (2010 :
£41,000) in relation to the sale of the Medical division and portfolio of surplus property, £3,410 (2010 : £3,175) in relation to
company secretarial legal services, £nil (2010 : £6,000) for a review of the half-year accounts and £3,000 (2010 : £2,500) in
respect of the audit of the Group’s UK pension scheme.

     Notes to the Accounts

                                                                                                          Year ended      Year ended
                                                                                                            31 March       31 March
     6 Employee information                                                                                     2011            2010
                                                                                                           £’millions       £’millions

     Staff Costs (including Directors) were:
     Wages and salaries                                                                                          3.2             5.6
     Social security costs                                                                                       0.3             0.5
     Pension contributions                                                                                       0.3             0.3
                                                                                                                 3.8             6.4

     Key management, consisting of the Main Board Directors and
     the Directors of the UK subsidiary companies, received the
     following compensation:

     Wages and salaries                                                                                          0.8             1.3
     Compensation for loss of office                                                                               -             0.1
     Pensions                                                                                                    0.2             0.1
                                                                                                                 1.0             1.5

                                                                                                             Number          Number

     The average number of persons employed by the Group
     (including Directors) during the year was as follows:
     Selling and administration                                                                                   60              70
     Warehousing, distribution and manufacturing                                                                  26              31
                                                                                                                  86             101

     Details of Directors’ emoluments in aggregate for each Director and share options are given in the Remuneration Report on
     pages 14 to 16.

                                                                                   Notes to the Accounts

                                                                                               Year ended           Year ended
                                                                                                 31 March            31 March
                                                                                                     2011                 2010
7 Taxation                                                                                      £’millions            £’millions

The tax charge comprises:
UK corporation tax on profits for the year at 28% (2010 : 28%)                                          -                      -

Non-UK taxation:
 - Current                                                                                            0.3                  0.5
 - Adjustment in respect of prior years                                                               0.2                    -
Total current taxation                                                                                0.5                  0.5
Deferred tax: Origination and reversal of temporary timing differences                                  -                  0.2
Total taxation charge in the income statement                                                         0.5                  0.7

Factors affecting taxation charge:
The taxation expense on the profit for the year differs from the amount computed by applying the corporation tax rate to the
profit before taxation as a result of the following factors:

Profit before tax on continuing operations                                                            0.9                  1.4
Loss before tax from discontinuing operations                                                           -                 (5.7)
Profit/(loss) for the period before tax                                                               0.9                 (4.3)
Notional tax charge/(credit) at UK rate of 28% (2010 : 28%)                                           0.3                 (1.2)

Effects of:
Non allowable and non taxable items                                                                   0.3                  4.8
Disposal of discontinued activities                                                                     -                 (0.8)
Tax losses not recognised                                                                             0.1                 (1.9)
Different tax rates on non-UK profits                                                                (0.1)                (0.2)
Adjustments to tax charges for previous periods: Non-UK taxation                                     (0.1)                   -
Total taxation charge                                                                                 0.5                  0.7

     Notes to the Accounts

     8 Discontinued Operations                                                                           Year ended           Year ended
                                                                                                      31 March 2011        31 March 2010
     Loss for the period from discontinued operations comprise:                                           £’millions            £’millions

     Loss from operations                                                                   (i)                   -                  (5.3)
     Loss on disposal                                                                      (ii)                   -                  (0.4)
                                                                                                                  -                  (5.7)

     There were no discontinued operations during the year ended 31 March 2011.

     During the year ended 31 March 2010, the Group:
     1) disposed of the Medical division for £1.2m;
     2) disposed of a portfolio of surplus property assets for £8.5m;
     3) decided to cease trading in the Carl Lewis fitness operations;
     4) agreed an out of court settlement of the MPEG-2 litigation which had been brought against the Group in relation to
     alleged patent infringements. In settlement, the Group made a payment of US $10million in respect of all products sold
     prior to 1 January 2010 and has now entered into a license agreement in respect of any sales of products requiring an
     MPEG-2 license from MPEG LA, LLC from 1 January 2010.

     (i) Loss for the period ended 31 March 2010 from discontinued operations may be analysed as follows:

                                                                         Year ended 31 March 2010
                                           Full service   Discontinued     Carl Lewis    Property     Medical    MPEG      Total
                                              LCD TV            UK CE                                 Division
     Revenue                                     (0.2)            0.1            1.1              -       5.7          -     6.7
     Cost of sales                               (0.2)            0.3           (1.2)             -      (4.6)         -    (5.7)
     Gross (loss)/profit                         (0.4)            0.4           (0.1)             -       1.1          -    1.0
     Net operating expenses                      (0.6)            0.3           (0.3)         0.4        (1.3)    (4.8)     (6.3)
     Operating (loss)/profit                     (1.0)            0.7           (0.4)         0.4        (0.2)    (4.8)     (5.3)
     (Loss)/profit for period before tax         (1.0)            0.7           (0.4)         0.4        (0.2)    (4.8)     (5.3)
     Tax                                            -               -              -            -           -        -         -
     (Loss)/profit for period                    (1.0)            0.7           (0.4)         0.4        (0.2)    (4.8)     (5.3)

                                                                                      Notes to the Accounts

(ii) Profit/(loss) on disposal of discontinued operations in the year ended 31 March 2010 may be analysed as follows:

                                                                       Year ended 31 March 2010
                                                              Other       Division    Property      Total
Non current assets                                                -             -         8.5        8.5
Current assets                                                    -          1.8            -        1.8
Current liabilities                                               -          (1.5)          -        (1.5)
Net assets disposed of                                            -          0.3          8.5        8.8
Profit/(loss) on disposal                                      (0.9)          0.5           -        (0.4)
Total consideration net of costs                               (0.9)         0.8          8.5        8.4
Satisfied and to be satisfied by cash, net
cash inflow/(outflow) arising                                  (0.9)          0.8         8.5        8.4

The net cash flow from the sale of discontinued activities was as follows:

                                                                                                   Year ended         Year ended
                                                                                                31 March 2011      31 March 2010
                                                                                                    £ millions          £ millions

Sale of Medical Division                                                                                       -             0.8
Sale of surplus property assets                                                                                -             8.5
Sale of Grundig                                                                                              0.5             0.7
                                                                                                             0.5            10.0

The expected earnout from the Grundig disposal included within other receivables is £nil million (2010 : £0.5 million)

     Notes to the Accounts

     (iii) The net cash flow attributable to the operating, investing and financing activities from discontinued operations were:
     During the year ended 31 March 2011, cash was received for the remaining Grundig earnout debtor (£0.5 million)

                                                                          Year ended 31 March 2010
                                           Full service   Discontinued      Carl Lewis    Property    Medical    MPEG      Total
                                               LCD TV           UK CE                                 Division
     Cash flow from operating activities
     (Loss)/profit for the period                 (1.0)            0.7            (0.4)       0.4        (0.2)    (4.8)     (5.3)
     Adjust for:
     (Increase)/decrease in receivables               -              -               -           -        1.1        -      1.1
     (Increase)/decrease in inventory                 -              -            0.2            -        0.1        -      0.3
     Increase/(decrease) in payables               1.0            (0.7)           0.2         (0.4)       1.1      4.8      6.0
     Net cash from operating activities               -              -               -           -        2.1        -      2.1
     Net Increase in cash & cash
     equivalents                                      -              -               -           -        2.1        -      2.1
     Cash & cash equivalents at the
     beginning of the period.                         -              -               -           -       (2.1)       -      (2.1)
     Cash and cash equivalents at the
     end of the period.                               -              -               -           -           -       -         -

     9 Earnings per ordinary share

     Basic earnings per share are based upon earnings of £0.4 million (2010 : £(5.0) million) and 50,589,140 (2010 : 50,578,573)
     Ordinary Shares being the weighted average number of Ordinary Shares in issue during the twelve months ended 31 March
     2011 excluding the shares held by The ESOP Trust. Basic earnings per share on continuing activities are based upon earnings
     of £0.4 million (2010 : £0.7 million) and discontinued operations are based upon earnings of £nil million (2010 : £(5.7)

     Diluted earnings per share are based upon earnings of £0.4 million (2010 : £(5.0) million) and 51,284,857 (2010 : 50,578,573)
     Ordinary Shares allowing for the exercise of outstanding share options exercisable at a price below the average fair value
     during the period and the shares held by the ESOP Trust. Diluted earnings per share on continuing activities are based upon
     earnings of £0.4 million (2010 : £0.7 million) and on discontinued operations upon earnings of £nil million (2010 : £(5.7)

     Potential Ordinary Shares of 696,513 have been excluded from the prior year computation of diluted EPS as the shares are

     10 Dividends                                                                                            Year ended           Year ended
                                                                                                          31 March 2011        31 March 2010
                                                                                                              £’millions            £’millions

     Special dividend                                                                                              10.1                      -
                                                                                                                   10.1                      -

     The company paid a special dividend of 20p per ordinary share on 15 October 2010 to shareholders on the register at
     1 October 2010.

                                                                             Notes to the Accounts

                                                                    Furniture,                 Plant and
                                    Freehold        Leasehold    Fixtures and       Motor     Equipment     Investment
11 Property, plant and equipment    Property    Improvements      Equipment       Vehicles          Total    Properties
                                   £’millions       £’millions      £’millions   £’millions    £’millions     £’millions
   and investment properties

At 1 April 2010                             -             0.3             7.7          0.2           8.2               -
Additions                                   -                -               -            -             -              -
Disposals                                   -                -          (0.6)        (0.1)          (0.7)              -

At 31 March 2011                            -             0.3             7.1          0.1           7.5               -

Aggregate depreciation
At 1 April 2010                             -             0.1             7.2          0.2           7.5               -
Amount provided                             -                -            0.2             -          0.2               -
Eliminated on disposal                      -                -          (0.6)        (0.1)         (0. 7)              -

At 31 March 2011                            -             0.1             6.8          0.1           7.0               -

Net book value
At 31 March 2011                            -             0.2             0.3             -          0.5               -

Cost and valuation
At 1 April 2009                          3.0              0.4             7.6          0.3          11.3            5.6
Additions                                   -                -            0.1             -          0.1               -
Disposals                              (3.0)             (0.1)               -       (0.1)          (3.2)         (5.6)
At 31 March 2010                            -             0.3             7.7          0.2           8.2               -
Aggregate depreciation
At 1 April 2009                             -             0.1             6.9          0.2           7.2               -
Amount provided                             -                -            0.3             -          0.3               -
At 31 March 2010                            -             0.1             7.2          0.2           7.5               -
Net book value
At 31 March 2010                            -             0.2             0.5             -          0.7               -

     Notes to the Accounts

     12 Investments
     Investments in Subsidiaries:
                                                                                                  Company               Company
                                                                                                  31 March              31 March
                                                                                                       2011                 2010
                                                                                                  £’millions            £’millions

     Shares at cost at beginning of year                                                                  1.6                 2.1
     Impairment of investments                                                                              -                (0.5)
     Shares at valuation at end of year                                                                   1.6                 1.6

     A summary of the principal subsidiary companies is shown below:
                                          Country of
                                          and principal   % of
                                          place of        capital
     Name of Company                      business        held      Class of capital issued       Nature of Business

     Held directly:

     Alba Broadcasting                    England         100       100 £1 ordinary shares        Audio, vision and
     Corporation Limited                                                                          consumer electronic
                                                                                                  equipment importer
     Grundig Consumer                     England         100       113,208 £1 ordinary shares    and distributor
     Electronics Limited

     Harvard Property Holdings Limited    England         100       521,008 £1 ordinary shares    Property holding

     Held indirectly:

     Harvard Maritime Limited             Hong Kong       100       100,000,000 HK$1 ordinary     Importer and exporter
                                                                    960,000,000 HK$1
                                                                    redeemable ordinary shares

     Harvard International                Hong Kong       100       5,000 HK$10 ordinary shares   Inspection, sourcing and
     (Hong Kong) Limited                                                                          administration services

     Bush Australia PTY Limited           Australia       100       100,000 Aus $1 shares         Importer and distributor

     Grundig Australia PTY Limited        Australia       100       1,000,001 Aus $1 shares       Importer and distributor

     Advantage has been taken of the exemptions available under the Companies Act 2006 not to disclose Group subsidiary
     companies which are dormant.

                                                                                             Notes to the Accounts

                                                                                                              Group             Group
                                                                                                           31 March          31 March
                                                                                                               2011              2010
 13 Inventories                                                                                            £millions          £millions

 Goods for resale                                                                                                  6.9              4.4
 Stock in transit                                                                                                  0.3                -

                                                                                                                   7.2              4.4

 The cost of inventories recognised as an expense and included in the income statement in cost of sales amounted to £51.0 million
 (2010 : £63.9 million). In 2011 £1.1 million (2010 : £0.8 million) of inventory provisions were charged in the income statement.
 The cost of stocks include interest of nil (2010 : £nil million). None (2010 : nil) of this stock is pledged as security against the
 specific bank import advance.

                                                                           Group              Group         Company          Company
                                                                        31 March           31 March         31 March         31 March
                                                                             2011              2010              2011            2010
14 Trade and other receivables                                          £’millions         £’millions       £’millions       £’millions

Trade receivables                                                           12.1                3.7                      -            -
Amounts owed by subsidiaries                                                    -                  -               56.9          68.6
Other receivables                                                             0.4               1.1                      -            -
Prepayments and accrued income                                                0.5               0.8                      -            -

                                                                            13.0                5.6                56.9          68.6

Trade and other receivables are shown after deducting a provision for impairment of £0.1 million (2010 : £0.4 million). The
credit to the income statement was £0.3 million (2010 : £0.6 million credit). The decrease in the trade debtor impairment
charge reflects the application of the Group’s provisioning policy in respect of bad and doubtful debts. The Directors
consider that the carrying amount of trade and other debtors approximates their fair value.

As at 31 March 2011, trade and other receivables outside their payment terms yet not impaired are as follows:

                                                                                               Outside credit terms but not impaired

Total                   Within credit terms          0 - 1 month            1-2 months      More than 2 months
£’millions                       £’millions             £’millions            £’millions              £’millions

2011                                 12.1                   10.5                     0.5                    0.2                     0.9
2010                                   3.7                    3.3                    0.2                       -                    0.2

15 Financial risk management and financial instruments

At the year end there were no material forward foreign exchange contracts (2010 : nil).

     Notes to the Accounts

     Fair value of financial assets                                    Liquidity risk
     and liabilities                                                   As regards liquidity, the Group’s policy has sought, since

     Derivative financial instruments are recognised                   the current structure was first established in the 1970’s, to

     at fair value in the balance sheet.                               ensure continuity of funding through the maintenance of
                                                                       excellent relationships with its banks. Through the use of
     The carrying value of all other financial assets and              extensive Trade Finance facilities, the Group is able to
     liabilities, including trade balances, cash and cash              ensure the availability of required funding. Furthermore,
     equivalents and bank loans, approximate to their fair             as the proportion of the Group’s purchases on open
     values in both the current and prior years.                       credit increases, the Group’s reliance on external funding
                                                                       will reduce.

     Fair value estimation
     The fair value of derivative financial instruments
                                                                       Foreign currency risk
     are based on ‘Mark to Market’ prices as provided                  Most of the Group’s purchases are in currencies different
     by the Group’s bankers. The nominal value less                    from the selling currency. It is the Group’s policy to
     impairment provision of trade receivables and                     eliminate a part of this exposure when purchase
     payables, as well as bank loans, are assumed to                   programmes are planned through a combination of forward
     approximate their fair value.                                     currency contracts and options. All remaining exposure is
                                                                       eliminated at the time of shipment. Gains and losses on
     None of the Group’s financial instruments were
     traded in active markets at the balance sheet date.               instruments used for hedging are not realised until the
                                                                       exposure that is being hedged is itself recognised. The fair
                                                                       value of gains and losses on instruments used for hedging
     Financial risks                                                   at 31 March 2011 amount to £nil (2010 : £nil).
     The main risks arising from the Group’s financial
     instruments are interest rate risk, liquidity risk, foreign       The Group’s policy does not give rise to instruments used
     currency risk and credit risk. The Board reviews and agrees       for hedging having more than one year to their maturity.
     policies for managing each of these risks and they are            As a result any unrealised gain or loss on instruments used
     summarised below. These policies have remained                    for hedging at the balance sheet date will be recognised in
     unchanged since 1 April 2008.                                     the income statement of the next accounting period.

                                                                       The Group has overseas subsidiary companies operating
     Interest rate risk                                                in Hong Kong and Australia. The Group’s Sterling balance
     The Group finances its operations through a mixture of            sheet is partly protected from movements in exchange rates
     retained profits, bank borrowings and net funds. Where            by financing a proportion of its net investment in foreign
     necessary the Group borrows in the desired currencies at          currencies.
     floating rates of interest. It is the view of the Group that
     banks are service providers in the same way as shipping
     companies, insurance companies etc. Having several banks,
     the Group can utilise this competitive situation to ensure
     that all banks lend on the best borrowing terms. This is
     further enhanced by the fact that banks have traditionally
     provided facilities at lower rates of interest on trade finance
     than for other types of borrowing because of the short-
     term nature of the liability. Added to this, the Group has
     enjoyed an unblemished reputation with its banks for many
     years, having always been extremely prompt in meeting its
     obligations and handling all matters appertaining to its
     business with banks efficiently.

                                                                                       Notes to the Accounts

Credit risk                                                      Interest rate risk profile of
The Group’s principal financial assets are bank balances         financial assets and financial
and cash, trade and other receivables, investments and           liabilities
derivative financial instruments.                                The Group has no financial assets, other than short-term
                                                                 debtors and cash at bank. The Group’s net financial assets
The credit risk on liquid funds and derivative financial         at 31 March 2011, excluding short term debtors and
instruments is limited because the counterparties are            creditors were:                               31 March                31 March
banks with high credit ratings assigned by international                                                            2011                   2010
credit rating agencies.                                          Currency                                      £ millions              £ millions
                                                                 Sterling                                              8.8                  20.2
                                                                 US Dollar                                             4.1                   7.3
The Group is exposed to credit risk via its trade receivables.
                                                                 HK Dollar                                             0.3                   0.6
Concentrations of credit risk will also exist due to material
                                                                 Aus Dollar                                            0.3                   0.6
amounts receivable from individual customers. Major
                                                                 Euro                                                    -                   0.2
customers are all blue chip institutions and procedures                                                               13.5                  28.9
are in place to ensure customers have appropriate credit
histories. The maximum credit risk exposure at the year end      All the above were at a floating rate of interest.
date is in total represented by the trade receivables figure,
which is net of appropriate provisions.
                                                                 Currency exposures
                                                                 As explained above, the Group’s objectives in managing

Capital management                                               the currency exposures arising from its net investment
                                                                 overseas are to retain some potential for currency related
The capital structure of the Group is presented in the           appreciation while partially hedging against currency
balance sheet. Notes 19 and 20 provide details on equity         depreciation. Gains and losses arising from these structural
and Note 15 on any loans and overdrafts.                         currency exposures are recognised in the statement
                                                                 of recognised income and expense.
The Board’s policy is to maintain a strong capital base so as
to maintain investor, creditor and market confidence and to      The table below shows the Group’s currency exposures;
enable successful future development of the business. The        in other words, those transactional (or non-structural)
Board monitors return on capital and determines the overall      exposures that give rise to the net currency gains and losses
level of dividends payable to shareholders.                      recognised in the profit and loss account. Such exposure
                                                                 comprises the monetary assets and monetary liabilities of
From time to time, the Group has purchased its own shares        the Group that are not denominated in the operating (or
in the market. The shares are purchased to satisfy awards        ‘functional’) currency of the operating unit involved. As at
under the Group’s share option schemes and Long-Term             31 March 2011 the exposures were as follows:-
Incentive Plan. Once purchased, shares are not sold back
in the market. The Group does not have a defined share           Functional    Net foreign currency monetary assets/(liabilities) in £’ millions
buy-back plan.                                                   currency of
                                                                 Group                 £                      US$                  TOTAL
                                                                 operation      2011       2010        2011         2010       2011    2010

There were no changes to the Group’s approach to capital         HK$              -           -         3.2          1.5        3.2         1.5
management during the year. Neither the Company nor any          £                -           -         0.2          6.4       (0.2)        6.4
of its subsidiaries are subject to externally imposed capital    A$            (1.2)       (0.5)       (2.2)        (1.0)      (3.4)       (1.5)
requirements.                                                                  (1.2)       (0.5)        1.2          6.9          -         6.4

     Notes to the Accounts

     Maturity of financial liabilities                                   Borrowing facilities
     There were no financial liabilities for the Group at                As at 31 March 2011 the Group had undrawn
     31 March 2011 (2010 : nil).                                         borrowings and trade finance related facilities of
                                                                         approximately £12.0 million, all of which are renewable
                                                                         within one year.

                                                                             Group             Group       Company            Company
                                                                          31 March          31 March       31 March           31 March
                                                                               2011             2010            2011              2010
     16 Trade and other payables                                          £’millions        £’millions     £’millions         £’millions

     Trade creditors                                                           10.2               6.6                -                -
     Amounts owed to subsidiaries                                                  -                 -           26.7             26.7
     Other creditors                                                            2.2               2.0                -                -
     Other taxation and social security                                         0.2               0.2                -                -
     Accruals                                                                   0.8               0.6                -                -
     Value added tax                                                            0.3               0.3                -                -
                                                                               13.7               9.7           26.7              26.7

                                                                                                              Group              Group
                                                                                                           31 March           31 March
                                                                                                                2011              2010
     17 Provisions for liabilities                                                                         £’millions         £’millions

     Balance at 1 April 2010                                                                                      0.7              4.7
     Charged to the income statement                                                                              0.8              1.6
     Utilised in year                                                                                            (1.0)            (5.6)
     Balance at 31 March 2011                                                                                     0.5              0.7

     The above provision includes a provision for warranty claims. The warranty provision is based on an assessment of future claims
     with reference to past claims and is expected to be utilised within the following financial year.

                                                                                                                capital          Group
                                                                                                           allowances             Total
     18 Deferred Taxation                                                                                   £’millions        £’millions

     At 1 April 2010                                                                                                 -                -
     Charge to income statement                                                                                      -                -
     Credit to equity                                                                                                -                -
     At 31 March 2011                                                                                                -                -
     Deferred tax (asset)                                                                                            -                -
     Deferred tax liability                                                                                          -                -

     At 31 March 2011                                                                                               -                 -

                                                                                       Notes to the Accounts

                                                                                                             Excess             Group
                                                                                                             capital             Total
                                                                                                        allowances           £’millions

At 1 April 2009                                                                                               (0.2)              (0.2)
Charge to income statement                                                                                     0.2                0.2
Credit to equity                                                                                                 -                  -
At 31 March 2010                                                                                                  -                  -
Deferred tax (asset)                                                                                              -                  -
Deferred tax liability                                                                                            -                  -

At 31 March 2010                                                                                                 -                   -

At 31 March 2011 the Group had operating losses carried forward in respect of which no deferred tax assets were recognised
amounting to approximately £76.8 million (2010 : £76.2 million) and such losses comprise, in the main, UK tax losses. The
Directors do not consider it appropriate to recognise any deferred tax asset to reflect the potential benefit arising from such
timing differences as at 31 March 2011, because it is not probable that sufficient future taxable profits will be available to
utilise these losses.

At 31 March 2011, the undistributed earnings of overseas subsidiaries capable of making a dividend was £1.6 million (2010:
£2.1 million). No deferred tax liabilities have been recognised in respect of unremitted earnings because the Group is in a
position to control the timing of the reversal of these temporary timing differences and it is probable that such differences will
not reverse in the foreseeable future.
                                                                                                            Group and        Group and
                                                                                               Company        Company
                                                                                               31 March       31 March
                                                                                                   2011           2010
19 Share Capital                                                                                             £’millions       £’millions

Allotted, called up and fully paid:
At 31 March 2011 51,275,685 Ordinary Shares of 10p each
(2010 : 51,256,685 Ordinary Shares of 10p each)                                                                        5.1          5.1

The Group operates the following share option schemes and incentive plan:

Savings-Related Share Option Scheme – Since 1987 the Company has operated Save-As-You Earn (SAYE) plans for
UK employees. Under the current plan which was established by the Company and approved by the Inland Revenue in
September 1996, employees can save a portion of their salary over periods of three, five or seven years, subject to a
cumulative maximum investment of £250 per month for each individual. At the end of the relevant period the employee
has the option to purchase ordinary shares with the accumulated fund, which includes a tax free bonus, at a purchase
price equal to 80% of the market price prevailing at the time the employees are invited to participate in the plan. Options
that are not exercised within six months of the third, fifth or seventh anniversary of the grant lapse unconditionally. The
scheme was renewed in 2006.

     Notes to the Accounts

     Executive Share Option Schemes – Options are granted to Executive Directors and senior management at an exercise
     price equal to the market price of the Company’s shares on the day immediately preceding the date of grant. The exercise
     of options is subject to performance targets over a three year period prior to exercise, details of which are set out in the
     Remuneration Report on pages 14 to 16. Subject to the performance conditions being achieved, options are exercisable
     from the third anniversary of the date of grant and lapse if they remain unexercised at the tenth for approved options and
     at the seventh for unapproved options.

     Long-Term Incentive Plan – This plan was established in 1998 and received shareholder approval at the Company’s
     Annual General Meeting held on 18 September 1998. Awards of shares are granted to Executive Directors and other
     executives by the Trustees of the ESOP Trust following the acceptance of recommendations made by the Remuneration
     Committee. The shares conditionally awarded are held in trust for a period of three years from the award date (the
     performance period) and their release is conditional upon and allocated in equal portions to the achievement of Total
     Shareholder Return and Earnings per Share targets during the performance period. If neither of the targets are achieved
     the awards lapse and the shares retained by the Trust. This plan terminated on 18 September 2008, being the tenth
     anniversary of its adoption by the Company. Having taken advice from independent consultants the Remuneration
     Committee will keep the establishment of a new plan under review.

     As at 31 March 2011, the ESOP Trust held 678,112 Ordinary Shares (2010 : 678,112).

     19,000 Ordinary shares were issued under the SAYE scheme during the year.

     Options over the Company’s share capital under the 1996 and 2010 Executive Share Option Schemes and the 1996
     Savings-Related Share Option Scheme at 31 March 2011 were as follows:

     No of shares   Option price*     Exercisable between             No of shares   Option price*      Exercisable between

     11,036            206.52p        26/6/2004   - 25/6/2011         83,758            252.57p          1/7/2008   - 30/6/2012

     14,257            296.24p       16/12/2005   - 15/12/2012        45,000             26.25p          6/1/2012   -   5/1/2019

     17,738            509.54p        14/7/2007   - 13/7/2014         60,000                50p        15/03/2013   - 14/03/2020

     56,099            509.54p        14/7/2007   - 13/7/2011         2,640,000             50p        15/03/2013   - 14/03/2020

     26,997            252.57p         1/7/2008   - 30/6/2015         130,853            42.26p          1/3/2011   - 31/8/2011

     * As a result of the special dividend of 20 pence paid to shareholders on 15 October 2010 and the resultant fall in value of the
     options granted, the Company is seeking advice on any adjustments required to the option price and the number of shares under
     option so that the total consideration remains unchanged.

     The number and weighted average exercise prices of share options granted under the Company’s Executive and Savings-
     Related Share Option Schemes are as follows:-

                                                                                                 Notes to the Accounts

                                                   2011         2011                  2010           2010                     2009                 2009
                                               Number       Weighted               Number         Weighted                 Number               Weighted
                                               of share      average               of share        average                 of share              average
                                                options      exercise               options        exercise                 options              exercise
                                                                price                                 price                                         price
                                                                    £                                     £                                             £
Outstanding at the beginning of the year       4,238,97           0.71           1,762,898                  1.79        2,403,562                   2.00
Granted during the year                                -                 -       2,700,000                  0.50            45,000                  0.26
Exercised during the year                      (19,000)           0.43                    -                    -                     -                  -
Lapsed during the year                       (1,134,232)          0.77            (706,259)                 2.11         (685,664)                  2.43
Adjustments during the year                            -                 -         482,331*                 1.11                     -                  -
Outstanding at the end of the year             3,085,73           0.69           4,238,970                  0.71        1,762,898                   1.79
Options exercisable at the end of the year      141,889           0.55              38,928                  3.37            41,669                  4.64

* as a result of a return of cash of 30p per Ordinary share paid to shareholders in January 2009, HM Revenue & Customs
approved a reduction in the exercise price and a corresponding increase in the number of shares under option so that the
total consideration remained unchanged.

The factors agreed by HM Revenue & Customs were:
For increase in the number of shares over which options are held = 55.75 / 37.75
For reduction in exercise price of options = 37.75 / 55.75
These adjustments were not applied to options granted in January 2009 and March 2010

The weighted average share price at the date of exercise for share options exercised during the year was
£0.43 (2010 : £nil : 2009 : £nil)

The options outstanding at the end of the year have weighted average remaining contractual lives and exercise
prices as follows:-

                                                    2011         2011            2010          2010               2009                2009
                                                Number     Weighted           Number      Weighted             Number            Weighted
                                                of share     average          of share      average            of share            average
                                                 options   contractual         options   contractual            options         contractual
Range of exercise prices £                                        life                           life                                   life
                                                                Years                         Years                                  Years

0 to 5                                        3,011,901          8.25        4,119,519          8.10         1,620,381                   5.07
5 to 10                                          73,837          1.77         119,451           2.48          142,517                    3.74

The Group recognised the following charges in the income statement in respect of its share-based payment plans:

                                                                             Year ended Year ended
                                                                                         31 March                  31 March
                                                                                              2011                     2010
                                                                                         £’millions                £’millions

Charge to income statement (all equity settled)                                                         -                   -

     Notes to the Accounts

     The weighted average estimated fair value for the following options granted was calculated using a Black-Scholes option
     pricing model. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis
     of the share price over a ten year period. Similarly, the forfeiture rate is an estimate of the percentage of options that do not
     vest and is based on an analysis of the Group’s past experience. The estimated fair values and the inputs into the model are as

     1996 Executive options
     Date of grant                  16/12/2002 16/12/2002 14/07/2004 14/07/2004 01/07/2005 01/07/2005 08/01/2008 08/01/2008 06/01/2009

     Fair value (p)                     157.6       178.8          27.1    307.1         139.3    158.7     25.0      28.8        12.1
     Share price at date of grant        435          435         747.5    747.5          377.5   377.5     78.0      78.0      27.75
     Exercise price (p)                437.5        437.5         752.5    752.5           373      373    73.25     73.25      26.25
     Expected volatility                 36%         36%           36%      36%           36%      36%      36%       36%        36%
     Expected life (years)               4.25         5.4           4.25     5.4          4.25       5.4   4.25       4.25         5.4
     Risk free rate                   4.85%         4.85%        4.85%     4.85%         4.85%    4.85%    4.85%    4.85%      4.85%
     Forfeiture rate                    14%          14%           14%      14%           14%      14%      14%       14%        14%

     Date of grant                     01/03/2008           01/03/2008      01/03/2008

     Fair value (p)                        44.9                 51.5            56.9
     Share price at date of grant          93.5                 93.5            93.5
     Exercise price (p)                    62.4                 62.4            62.4
     Expected volatility                   36%                  36%             36%
     Risk free rate                      4.85%               4.85%            4.85%
     Forfeiture rate                       14%                  14%             14%

     1996 and 2010 Executive options

     The weighted average estimated fair value for the following options granted was calculated using a Monte Carlo option pricing model

     Date of grant                                                                 15/03/2010
     Fair value (p)                                                                      19.56
     Share price at date of grant                                                         49.0
     Exercise price (p)                                                                   50.0
     Expected volatility                                                      65.1%/43.8%
     Expected life (years)                                                                 6.0
     Risk free rate                                                           2.55%/3.52%
     Expected dividend yield                                                               0%

     The expected volatility is calculated on two bases; over a period of time commensurate with the performance period (65.1%); over a
     period of time commensurate with the remaining expected term after the performance period (43.8%)
     The risk free rate is calculated on two bases; over a period of time commensurate with the performance period (2.55%); over a period
     of time commensurate with the remaining expected term after the performance period (3.52%)

                                                                                    Notes to the Accounts

20 Nature and Purpose of Other Reserves                            in the ESOP Trust (“The Trust”) maybe transferred by the
                                                                   Trustees to any employee or ex employee who has validly
Share premium account
                                                                   exercised an option under the Company option schemes.
This reserve records the consideration premium for shares
issued at a value that exceeds their nominal value.
                                                                   Translation reserve
                                                                   The translation reserve is used to record exchange
Capital redemption reserve
                                                                   differences arising from translation of the financial
This reserve relates to the value of shares redeemed or
                                                                   statements of foreign subsidiaries. It is also used to
cancelled by the Company, thus maintaining the capital of
                                                                   record the net exchange differences on monetary items
the Company after such redemption or cancellation.
                                                                   that form part of the net investment in foreign operations.

Investment in Own Shares
                                                                   Share based payment reserve
678,112 Ordinary Shares of 10p each, which represent
                                                                   This reflects the accumulated vested share based
1.32% of the issued ordinary share capital of the Company,
                                                                   payment costs charged through the income statement less
are held by the ESOP Trust which has waived its right to
                                                                   the cost attributed to shares that have since lapsed or been
receive ordinary dividends. Administrative costs of the Trust
                                                                   exercised. The cost of the lapsed and exercised options are
are charged to the income statement as incurred. Shares
                                                                   transferred to retained earnings.

                                                                                            Group                  Group
                                                                                       year ended             year ended
                                                                                         31 March              31 March
                                                                                             2011                   2010
21 Cash flow from operating activities:                                     Note        £’millions              £’millions

Operating profit from continuing operations                                                     0.7                   1.2
Operating loss from discontinued operations                                 8 (i)                 -                  (5.3)
                                                                                                0.7                  (4.1)
Adjustments for:
       Depreciation of property, plant & equipment                                              0.2                   0.3
       (Increase)/decrease in receivable                                                       (7.9)*                 3.1
       (Increase)/decrease in inventories                                                      (2.8)                  1.8
       Increase/(decrease) in payables                                                          4.0                  (2.5)
       Decrease in provisions                                                                  (0.2)                 (4.0)

Cash flow used by operating activities                                                         (6.0)                 (5.4)

Net cash

Cash and cash equivalents                                                                     13.5                  28.9

Cash and cash equivalents comprise cash at bank and bank overdrafts all with a maturity of three months or less.

*Excludes movement on expected earnout on disposal of Grundig disclosed in note 8 (ii)

      Notes to the Accounts

                                                                                                              Group                  Group
                                                                                                         year ended             year ended
                                                                                                           31 March              31 March
     22 Analysis of net funds and reconciliation                                                               2011                   2010
     of cash flow to movements in net funds                                                               £’millions              £’millions

     Net cash and cash equivalent at end of period                                                              13.5                  28.9

     Reconciliation of net cash flow to movements in net borrowings
     (Decrease)/increase in cash and cash equivalents                                                          (15.4)                   4.3

     Translation difference                                                                                            -               (0.1)
     (Decrease)/increase in net funds                                                                          (15.4)                   4.2
     Net cash at beginning of the period                                                                        28.9                   24.7
     Net cash at end of the period                                                                              13.5                  28.9

     23 Guarantees and other financial commitments

     (a)   No capital commitments had been authorised or contracted for but not provided in the accounts by the Group
           or the Company (2010 : £nil and £nil respectively).

     (b)   The Group has entered into non-cancellable leases in respect of plant and machinery, the payments for which
           extend over a period of up to three years. The total annual rental (including interest) for the year ended
           31 March 2011 was £34k (2010 : £157k) of which £nil (2010 : £nil) was applicable to the Company.
           The lease agreements provide that the Group will pay all insurance. The total rental (including interest) for the
           remainder of the leases is:

                                                                               Property leases                 Plant and machinery
                                                                                Group          Group             Group              Group
                                                                           year ended     year ended        year ended         year ended
                                                                            31 March       31 March          31 March           31 March
                                                                                 2011           2010              2011               2010
                                                                             £’millions     £’millions        £’millions         £’millions

     Within one year                                                             0.4             0.4                       -             -
     Within two to four years                                                    0.3             0.6                       -             -
                                                                                  0.7            1.0                       -             -

     (c)   The Company has guaranteed the borrowings of its subsidiary companies which total £nil (2010 : £nil).

     (d)   Information on the Group’s financial instruments is given in Note 15.

                                                                                     Notes to the Accounts

24 Related party disclosure

i) The key management personnel of the Company comprise members of the Harvard International plc Board of Directors. The
Directors do not receive any remuneration from the Company (2010 : £nil) as their emoluments are borne by subsidiaries. It is
impracticable to isolate the cost of service to the Company from the cost of service to the other members of the Group.

On 30 September 2009, the group disposed of the Medical Divison and a portfolio of surplus assets to a consortium led by the
Harris family and senior management including Daniel Harris and Andrew Rose. A Transitional Service Agreement exists between the
consortium and the Group whereby during the period from 1 April 2010 to 31 March 2011 the Group has recharged the Medical
Division £241k for salaries and office expenses and the Medical Division has recharged the Group £50k for office rent. At 31
March 2011 £29k was receivable from and £nil was due to the Medical Division. During the year ended 31 March 2010 the Group
recharged the Medical Division £200k for salaries and office expenses and the Medical Division recharged the Group £15k for office
rent. At 31 March 2010 there were no amounts due to or receivable from the Medical Division.

ii) The details of amounts owed from/to subsidiaries at the year end are given in notes 14 and 16 respectively. Movements in these
balances during the year were as follows:

                                                                 Year ended        Year ended
                                                                   31 March         31 March
                                                                       2011              2010
                                                                  £’millions        £’millions
Amounts provided against sums due from
subsidiaries in the year                                                 (1.6)          (1.6)
Amounts received from subsidiaries in the year                         (10.1)           (1.6)

Interest on inter-company balances are charged at 1% above the base rate.

iii) Details of impairment against the carrying value of the Company’s investments in subsidiary companies is given in Note 12.

iv) Harvard International plc guarantees the borrowings of its subsidiaries.

25 Ultimate controlling party

The Group is not under the control of any one party.


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