Getech : 2012 Annual Report & Accounts

02 Review of the year

At a glance

At Getech, we offer a range of services dedicated to helping customers understand the geological risks and opportunities associated with locating natural resources – whether it’s working on a global or regional scale.

Our eco-system offers a holistic view of how our core services interact, with Globe at the centre.

and Accounts 2012

Globe

Globe is our live GIS earth platform – designed to help our partner clients in their new ventures and asset-based exploration.

The platform is fuelled by our global gravity and magnetic data and delivers state of the art palaeogeographic reconstructions, source to sink characterisation, fully auditable structural solutions and our cutting-edge global plate model.

Global gravity and magnetic data

In addition to our core services, we archive and license the world’s most extensive commercial library of gravity and magnetic data. We have data covering almost every country in the world,

at a variety of scales and resolutions.

Regional Reports

Our specialists build higher resolution Regional Reports using the core components of Globe. These reports highlight key exploration opportunities, from continental to sub-basin scales. We feed this knowledge back into Globe to enhance the framework for subsequent reports, keeping us at the cutting edge of exploration.

Commissions

We work closely with our clients on every commission, which might include a depth-to-basement study, block evaluation, training course, or an R&D study. Once we’ve agreed the scope of the project, we draw on Globe and our Regional Reports to design the work programme.

August 2011

Further Iraq data sale

Getech announces sale of the full Iraq aeromagnetic data-set with gross revenue $500k.

October 2011

Sale of Russian products

Getech announce resumption of Russian data sales, with a sale of its aeromagnetic data products at gross value $550k.

April 2012 Sub-saltstudies in the Red Sea

A new Advanced Geophysical Services study with Aramco to map the sub-salt basin structures in part of the

Red Sea.

April 2012

Licence of US gravity data

The largest sale to date from the gravity data acquired

in December 2008 from Lisle Gravity at $1.2m.

An overview of our studies

We have over 30 non-exclusive studies in five continents

which are completed or currently proposed.

These studies address the critical issue of regional and basin‑scale exploration.

4 Studies

Europe and

the Arctic

7 Studies

South, Central

& East Asia

• Studies
  North Africa & the Middle East

6 Studies

Sub-Saharan

Africa

April 2012

New satellite R&D study

Commencement of R&D study to integrate Cryosat

2 altimeter data with existing data to improve the quality of the gravity map.

April 2012

Global Programmes successes

Three further companies have signed up to the three year Global Programmes, making five in total to date.

July 2012

Licence sales of global gravity and magnetic data products

Two licences signed for the Global Continental Margins gravity and magnetic data-sets with value in excess of $600k.

July 2012

Licence for Russian data products

Further licence for the Russian Arctic Shelf aeromagnetic data-set with gross revenue $1.28m.

Dr Stuart Paton

Non-executive Chairman

Highlights of the Chairman’s Statement

• Record revenue for the year of £6,441k generating a profit before tax £1,247k
• Proposed final dividend for the year ending July 2012 0.8p (final dividend year ended July 2011: 0.2p; interim dividend May 2011: 0.2p)
• Five clients signed up to the three year Global Programmes, with four further clients post year end
• Very strong data sales, including US data and Russian Arctic data
• Strong technical leadership through R&D, presentation at conferences and new technology
• Cash levels continue to improve strongly

I am pleased to make my second report as Chairman of the Company, on the seventh full year results since its admission to AIM, of Getech Group plc and its subsidiary company (“Getech” or “the Group”), for the year ended 31 July 2012. Getech is a geoscience services business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors.

Results

I report a Group profit before tax of £1,246,838 (2011: £669,702)

after interest receivable of £6,016 (2011: £5,356) on revenue of

£6,441,107 (2011: £5,326,866). The post-tax profit was £930,018

(2011: £574,987), giving earnings per share of 3.18p

(2011: 1.97p).

Dividends

Getech intends to continue its policy of progressive dividends as appropriate and is proposing a final dividend of 0.8p per share in respect of the year to 31 July 2011 (2011: 0.2p per share) in addition to the interim dividend of 0.2p per share announced in April 2012. The final dividend will be paid on 20 December to shareholders on the register of members on 23 November 2012.

Business review

I am pleased to report very strong growth in the performance of the Company this year following on from the turnaround in 2010-2011. The Company generated a record level of revenue which was an increase of 21{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} on the previous year. Pre-tax profits also increased 86{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} year on year. Both revenue and profits were significantly ahead of expectations.

The business is generating significant cash flow from operations and, at 31 July 2012, we had a gross cash position of £3,010,782, outstanding debt under the National Westminster Bank facility of £404,762 and hence a net cash position of £2,606,020.

We announced a number of major successes during the year in three key areas.

First, our strategic aim to diversify from our core business of sales of gravity and magnetic data and multi-client studies into multi-year Global Programmes has been very successful with five sponsors already signed up. Since the financial year end, we have signed up a further four major companies to the Global Programmes. We have now developed and extended the scope of the work and rebranded the Global Programmes as Globe. Globe is aimed initially at major companies but we are seeing increasing interest from smaller companies with significant international exploration portfolios who want to access our products, skills and expertise.

• The very strong level of initial commitments to Globe covers a three year work programme which substantially improves the forward visibility of earnings. We also believe that the close relationships with the sponsoring companies will lead to sale of further Globe products and proprietary contracts and that we will establish further sales as a “provider of choice” in the field of integrated global geoscience”.

Second, gravity and magnetic data sales, and associated proprietary studies, have continued to be very strong and demonstrate the continued requirement for our traditional products in exploration. Further, we are actively adding to our global database through agreements with host countries and we see a continuing demand for such products.

Third, we strive to be thought leaders in our field. Our staff regularly present at major international conferences across a range of topics where their papers are highly regarded, we are leading a consortium on the use of new satellite-based gravity data and we are undertaking a ground-breaking study for Aramco to map sub-salt structures using new potential field methods. We believe that this intellectual lead differentiates us from our competitors and builds the basis for future business.

Outlook

The continuing high oil and gas prices (outside the USA) have resulted in a continued recovery in the oil and gas sector, particularly for exploration and production companies.

We continue to believe strong commodity prices are likely to lead to further increased spending from companies in exploration and hence on the services we offer.

We are pleased to report that we have made a solid start to 2012-13. As reported we have already signed up four further sponsors for Globe. One of these sponsors has committed to a €1m call-off contract for a range of services including the core Globe products.

The very strong level of initial commitments to Globe covers a three year work programme which substantially improves the forward visibility of earnings. We also believe that the close relationships with the sponsoring companies will lead to sale of further Globe products and proprietary contracts and that we will establish further sales as a “provider of choice” in the field of integrated global geoscience.

With the requirement for E&P companies to expand into new frontier basins, and to minimise cost at the early stages of such exploration, we consider that there will be a continuation of the strong trend in gravity and magnetic data sales. We believe that the combination of our ever increasing library of products and data and our strong sales presence in the UK and USA will reinforce the growth path and we are optimistic about the coming years.

With our current strong cash position and proven ability to develop the business, we are actively looking for acquisition opportunities which will grow our core areas of expertise.

Finally, I would like to say how pleased I am to be involved with the Company and to thank the staff and my fellow Directors for all their hard work and dedication. I would particularly like to thank Mr Ian Somerton and Dr David Roberts, who both left the Board of Directors during the last year, for their substantial contributions to the Company.

Dr Stuart Paton

Raymond Wolfson

Chief Executive Officer

Highlights of the Operating Review

• Continuing growth in revenue (up 21{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to £6,441,107) and profits (up 86{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to £1,246,838)
• Strong overall data sales (up 45{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} year on year) including the largest sale to date from our US domestic dataset ($1.2m) and a major sale of the Russian Arctic Shelf aeromagnetic data ($1.28m)
• Successful launch of our multi-year Global Programmes with five full sponsors signed up by July 2012 and a further four signed after the balance sheet date
• Scope of the Global Programmes has now been expanded and rebranded as Globe, with sponsors now committing to Globe core projects
• Globe has resulted in significantly improved forward visibility of income
• Continued emphasis on technical and scientific leadership led to new funded research and development projects
• Cash levels recovered strongly rising to £3,010,872 by 31 July 2012

I report that in our seventh year as a public quoted company, Getech Group plc (“Getech” or “the Group”) returned

a pre‑tax profit of £1,246,838 (2011: £669,702) for the year ended 31 July 2012.

Business setting

The exploration market in the oil and gas sector has been strong throughout the year. This has been well supported by the continuing firm oil price.

We believe that the relative stability of the oil price at historically high levels will continue to provide a sound market environment for exploration giving a very positive outlook for our business.

Business activities

Getech’s strength lies in its ability to provide a range of data, services and solutions at scales ranging from global to sub-regional. Key to our success is the ability to understand the needs of our clients and provide high quality solutions to help them in their goal of finding oil and gas resources. We have now developed and expanded the scope of the Global Programmes and rebranded it as Globe, which incorporates the data, knowledge and experience that we have acquired over many years and at many levels of resolution. Globe enables us to deliver the core Global Programmes to our sponsors but will also provide an effective and efficient way of delivering information and solutions to clients whose needs are regional or sub-regional.

Oil, gas and mining companies license our data and studies when they are evaluating new exploration areas and when they wish to expand their current exploration activities into neighbouring regions. We are uniquely able to provide integrated solutions across a broad range of disciplines including, amongst others, potential field geophysics, structural geology, plate tectonics, palaeolandscape analysis and geochemistry. We actively work with a number of universities that are at the forefront of their disciplines (e.g. in palaeo-climate modelling) and also attend a range of international conferences to ensure we continue our technical excellence.

This year continued the strong upward trend in revenue and profits. The main reasons for this were the continued strong growth in data sales and the very successful launch and market entry of our multi-year Global Programmes, now within the Globe brand.

• This year continued the strong upward trend in revenue and profits. The main reasons for this were the continued strong growth in data sales and the very successful launch and market entry of our multi-year Global Programmes, now within the Globe brand.”

Data sales were up by 45{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} on the previous year and we made a number of significant individual data sales:

•In April, we announced a licence of US gravity and magnetic data valued at $1.2m. These data were licensed out of the assets we acquired from Lisle Gravity Inc. in December 2008. While there has been a stream of licences of various sizes for these data over the period since the acquisition, this sale is the largest to date of that data.

•In July, we issued two licences for our global continental margins gravity and magnetic datasets with an aggregate value in excess of $600,000. The global continental margin datasets are part of the library of gravity and magnetic data to which Getech has acquired access over the past 25 years and demonstrate the continuing value of global datasets to E&P companies in their exploration efforts.

•Also in July, the Company signed a further licence for its Russian Arctic Shelf magnetic data set with a gross sales value of $1.28m. The Russian Arctic Shelf is a major under‑explored area which is still in the early stages of exploration for oil and gas due to its harsh climate conditions and high exploration and production costs.

•We also made substantial sales of the Iraqi and Russian onshore magnetic datasets (gross values $500k and $550k respectively).

The last year has seen the fruition of a number of years of strategic investment in Globe. This was launched to the market in November 2011 and by July 2012 we had five sponsors signed up to the three year programme of deliverables. The aim of Globe is to provide exploration teams in oil and gas companies with a robust and constantly updated platform which supports their understanding, investigation and risking of new areas of interest. Initial development work started in 2009 and Globe now encompasses a range of products that build on Getech’s traditional strengths in potential field geophysics as well as its unique global plate model and palaeogeographic mapping techniques. These provide insights into the shape and evolution of sedimentary basins and the geographic context of the deposition within those basins. The palaeogeographies will then be used as the boundary conditions for state-of-the-art palaeoclimate, ocean and tide modelling. The successful market entry of Globe has resulted from a combination of the innovative thought-leading content which results from the technical work of Dr Paul Markwick and his team, combined with the sales direction and drive from Dr Paul Carey.

The Company recognises that, in order to continue to grow the business, it is vital to stay in the forefront of our technologies. In this context three particular areas are of note:

•In July 2012, we announced a nine month research and development study, funded by six companies, to develop and improve methodologies and techniques to integrate the latest results of the CryoSat-2 satellite data into the existing Getech satellite gravity map of the Earth’s oceans. The inclusion of the CryoSat-2 data will improve the quality of the gravity map and make such data of even greater value for oil exploration in marine areas. The R&D study has focused on four test areas chosen by the study sponsors, who will provide terrestrial gravity data for comparison purposes. This R&D study costs £15,000 per sponsor and it is intended that a successful outcome of this study will lead in early 2013 to a full scale study.

“Our staff are critical to the development of new ideas, insights and delivery of our products. We have strengthened our team in a number of key areas in the last year and are increasing our cooperation with key universities. In particular we continue to strengthen our sales team to help us to capitalise on the global interest in our products and services.”

Business activities continued

•In April 2012 we announced an Advanced Geophysical Services study with Aramco Overseas Company B.V. to map the sub-salt basin structures and depth to basement in a part of the Red Sea. The study uses new methodologies and techniques that have been developed by Getech to specifically map sub-salt basin areas that are difficult to map with conventional seismic reflection data. The Advanced Geophysical Services study results from over two years of developing and testing new 2D and 3D potential field inversion methods allowing better imaging and clearer understanding of deep basement structures.

•We have implemented new studies to evaluate the potential of unconventional resources in currently unexplored areas. The success of the shale gas business in the USA has had a dramatic effect on the US economy. Although the surface aspects, in respect of permitting, access to infrastructure and drilling technology, are vital to the success of an unconventional play, understanding the subsurface is absolutely key. Getech has a range of data, skills and expertise which can be applied to this new and exciting exploration concept.

Staff and corporate identity

Our staff are critical to the development of new ideas, insights and delivery of our products. We have strengthened our team in a number of key areas in the last year and are increasing our cooperation with key universities. In particular we continue to strengthen our sales team to help us to capitalise on the global interest in our products and services.

At the end of the year we started a strategic rebranding exercise. This has led to a set of clear statements about our aspirations and values which in turn led to fresh and innovative new branding concepts and imagery. We are actively using these to inform our actions at all scales from short-term plans through to long-term strategy development.

The future

Getech has invested heavily over the last few years in a number of areas ranging from developing Globe, through long-term relationship building with national oil companies and other partner organisations, to the development of new and innovative methodologies and techniques across a range of disciplines. The results of these technical investments, combined with our strongly directed sales team, are increasingly being reflected in our trading performance and we anticipate this trend will continue.

Since the year-end we have announced that a further four sponsors have committed to Globe, which now include, amongst others, ConocoPhillips and ENI bringing the total to nine. These give us a significantly improved forward visibility of income but also provide what we hope will be a series of long-term relationships through which we can continue to develop and deliver innovative and valuable services to our clients. We believe that these sponsors will increasingly use Getech for proprietary studies which build on the strong technical basis of our programmes.

We continue to develop our technical skills with internal R&D but we are also working with universities that are well known in their fields to make sure that we can deliver leading-edge solutions to our clients. We believe that these will help to reinforce our technical credibility and underpin our future growth.

Finally we have delivered a record result for the year and once again would like to thank all our staff and Board colleagues for their unstinting efforts on behalf of Getech. We believe we have made it a company that people want to work for and our team looks forward to the new challenges that the future years will bring.

Raymond Wolfson

Chief Executive Officer

Revenue £m

£6.4m +21{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Profit before tax £m

£1.2m +86{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Cash £m

£3.0m +124{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net assets £m

£5.5m +18{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Registered office

Convention House

St Mary’s Street

Leeds LS9 7DP

Nominated advisor and broker

WH Ireland Limited

Third Floor

Royal House

28 Sovereign Street

Leeds LS1 4BJ

Auditor

Grant Thornton UK LLP

No. 1 Whitehall Riverside

Leeds LS1 4BN

Solicitors

Walker Morris

Kings Court

12 King Street

Leeds LS1 2HL

Dr Stuart Paton (aged 44)

Non‑executive Chairman

Stuart was previously CEO of Dana Petroleum, a FTSE 250 company. Prior to that he was Technical and Commercial Director of Dana. He delivered a number of acquisitions for Dana which was taken over by the Korean National Oil Company. Prior to joining Dana he held a number of roles in Shell. He has a B.A. in Earth Sciences and a Ph.D. in Geology from Cambridge University.

Peter Stephens (aged 57)

Non‑executive Director

Peter was previously Head of European Equities Sales at Salomon Brothers and Credit Lyonnais. Since 2001 he has been working as a venture capitalist. He has an M.A. in Jurisprudence from Oxford University and qualified as a Barrister

in 1978. He is a founding shareholder of Desire Petroleum plc and is a non‑executive director of Tristel plc, a company quoted on AIM.

Principal bankers

National Westminster Bank Plc

PO Box 183

8 Park Row

Leeds LS1 1QT

Registrars

Capita Registrars

Northern House

Woodsome Park

Fenay Bridge

Huddersfield HD8 0LA

Dr Paul Markwick (aged 48)

Technical Director

Paul has a B.A. in Geology from

St. Edmund Hall, Oxford, and a Ph.D. in Geophysical Sciences from The University of Chicago. He worked for two years at BP’s Research Centre in Sunbury on Thames before moving to Chicago, where Paul studied with Professor Fred Ziegler’s oil industry sponsored Palaeogeographic Atlas Project. Paul is also a Research Fellow at the Universities of Leeds and Bristol.

Raymond Wolfson (aged 58)

Chief Executive Officer

Raymond has a B.A. in Physics from Magdalen College, Oxford. He worked for 13 years in BNFL in various management consultancy and commercial roles and then moved to Ernst & Young and qualified as a Chartered Accountant. In 1991 he joined the technology transfer company at the University of Leeds, as Finance Director and later Investment Director.

Colin Glass (aged 69)

Non‑executive Finance Director

Colin is a Chartered Accountant and a partner in Winburn Glass Norfolk, Chartered Accountants. He is a founder director of the AIM quoted Surgical Innovations Group plc which reversed into Haemocell plc in 1998 and also a non‑executive director of Straight plc, which he assisted in flotation on AIM in 2003. He is a board member of

a number of private companies.

Professor Derek Fairhead (aged 67)

President

Derek is the founder of Getech. Derek received a B.Sc. in Geology and Physics from Durham University, an M.Sc. in Geophysics from Newcastle University and a Ph.D. in Geophysics from Newcastle University. He was Managing Director of Getech for over 14 years until his appointment as Executive Chairman

in November 2007 and President in October 2009.

Dr Alison Fielding (aged 48)

Non-executive Director

Alison holds an MBA from Manchester Business School, a Ph.D. in Organic Chemistry and a first class degree in Chemistry from the University of Glasgow. Early in her career she spent five years at McKinsey & Co and more recently, while at IP Group, has sat on the board of, and advised, several early stage and quoted technology companies. Alison is currently a director of several other companies.

Professor Paul Carey (aged 45)

Marketing and Sales Director

Paul has a B.Sc. in Geology and a Ph.D. from Queens University Belfast where he lectured until joining Badley Ashton & Associates as a Reservoir Technologist. He was then appointed to the Chair in Petroleum Geology at the University of the Western Cape with academic, commercial and consulting positions. He then joined Fugro Robertson, taking roles including Head of Geochemistry and Head of Global Multi-client Products in Fugro Data Solutions. After a short return to Capetown he joined Getech in 2011.

The Directors present their report and financial statements for the year ended 31 July 2012.

Principal activity

The Group’s principal activity is the provision of gravity and magnetic data, services and geological studies to the petroleum and mining industries to assist in their exploration activities. A detailed business review of the year and future development is included in the Chairman’s Statement and the Operating Review on pages 4 to 8. That business review is incorporated in this Report of the Directors by reference.

Substantial shareholders

The Parent Company has been notified at 18 September 2012 of the following interests in excess of 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of its issued Ordinary Share capital:

Results and dividends

The profit for the year before taxation was £1,246,838 (2011: £669,702). The revenue for the year was £6,441,107

(2011: £5,326,866). This result is discussed further in the Chairman’s Statement and the Operating Review.

The Directors have considered the trading position of the Group. The market for exploration services remains very active and

is underpinned by the continuing strength of the oil price. Profitability has continued to improve and cash levels have strengthened considerably. Repayment of the debt facility has continued to schedule and the capital outstanding has fallen to £404,762 at 31 July 2012.

On the basis of a value in use assessment, the Directors do not believe that there is a permanent impairment in the valuation of the property and land owned by the Parent Company.

The Directors recommend a dividend of 0.8p per share (2011: 0.2p).

Directors

The Directors of the Parent Company who served during the year were:

Professor Derek Fairhead Dr Alison Fielding

Colin Glass

Dr Paul Markwick

Dr Stuart Paton

Dr David Roberts (resigned 31 January 2012) Ian Somerton (resigned 31 July 2012)

Peter Stephens Raymond Wolfson

The following Director of the Parent Company was appointed after the reporting date:

Professor Paul Carey (appointed 1 August 2012)

Corporate governance

As an AIM listed company, Getech Group plc applies those principles of good governance appropriate to a group of its size.

Internal control and risk management

The Board has overall responsibility for the Group’s systems of internal control and for reviewing their effectiveness. The Group maintains systems which are designed to provide reasonable but not absolute assurance against material loss and to manage rather than eliminate risk.

The key features of the Group’s systems of internal control are as follows:

•management structure with clearly identified responsibilities;

•production of timely and comprehensive historical management information;

•detailed budgeting and forecasting;

•monthly analysis of risks and threats reviewed by the Board at each of its meetings; and

•day-to-day hands on involvement of the Executive Directors.

The key financial indicators used by the Directors to monitor the performance of the Group are revenue, operating profit and gross cash.

Revenue for the year was 28{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} greater than the previous year. Profit before tax in the year was £1,246,838 which continued the trend over the last four years from loss of £628,000 in 2008/09, loss of £228,000 in 2009/10 and profit of £669,702

in 2010/11. The gross cash balance increased from £1,345,327 at 31 July 2011 to £3,010,782 at 31 July 2012. Net cash after the outstanding debt improved to £2,606,020. The continued improvement reflected, primarily, the successful launch of the Global Programmes and the continuing strength of data sales.

The Directors set out below the principal risks facing the business:

Liquidity risk

The Group’s cash reserves increased substantially during the year. While part of this reflects commitments from clients to future work, it also reflects the profits during the year. Internal cost levels have risen during the year due to the increase in staff numbers but this reflects the increasing workload. The key risk assessment remains in relation to future income levels, although the year has started with a significantly increased level of forward sales commitments.

Financial risk

The most important components of financial risk are market borrowing interest rate risk, credit risk and currency risk. These are mitigated by regular monitoring of market rates, by the creditworthiness of the customer base and by the policy of matching, as far as possible, the timing of settling invoices where sales and purchases are made in currencies other than pounds sterling.

Staff engagement and retention

Recruitment and retention of specialist staff are key to

the success of the business. The Group aims to ensure that

it provides stimulating work in an attractive environment which, together with its employment policies and remuneration packages, are designed to attract and retain the high quality staff who are the basis for its success.

for profitable trading, the Directors are fully satisfied that the Group is a going concern and will be able to continue trading for the foreseeable future.

Directors’ indemnity

Qualifying third party indemnity provisions (as defined in Section 234 of the Companies Act 2006) are in force for the benefit of Directors.

Creditor payment policy

The Group’s strategy is to build mutually beneficial relationships with its key suppliers. So long as suppliers have provided the goods and services in accordance with the previously agreed terms and conditions, the Group’s policy is to pay in accordance with those terms. The average number of days for which purchases were outstanding for payment by the Parent Company was 31 (2011: 31 days).

Auditor

Grant Thornton UK LLP has expressed its willingness to continue in office as auditor and a resolution to re-appoint Grant Thornton UK LLP will be proposed at the forthcoming Annual General Meeting.

By order of the Board

Systems and infrastructure

The Group is reliant on its IT infrastructure in order to trade. A failure in these systems could have a significant impact on its business. The Group has invested in new and updated IT infrastructure within the year. Controls are in place to maintain the integrity and efficiency of its systems which are regularly backed up, updated and tested.

Oil price

At current price levels fluctuations in the oil price are not regarded as presenting a material risk. However, in the event the oil price fell to significantly lower levels, there may be an adverse impact on demand for our products and services.

Going concern

The Directors have instituted regular reviews of trading and cash flow forecasts and have considered the sensitivity of these forecasts to different assumptions about future income and costs. With the improved cash levels and continued prospects

C Glass

Company Secretary 30 October 2012

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and to prepare the Parent Company financial statements under United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Company and the Group for that period. In preparing these financial statements, the Directors are required to:

•select suitable accounting policies and then apply them consistently;

•make judgements and estimates that are reasonable and prudent;

•state whether applicable IFRS have been followed in the consolidated financial statements and UK Accounting Standards have been followed in the Parent Company financial statements, subject to any material departures disclosed and explained in the financial statements; and

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors confirm that:

•so far as each Director is aware there is no relevant audit information of which the Company’s auditor is unaware; and

•the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

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

We have audited the financial statements of Getech Group plc for the year ended 31 July 2012 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position and Parent Company balance sheet, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditors

As explained more fully in the Directors’ Responsibilities Statement set out on page 14, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Opinion on the financial statements

In our opinion:

•the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at

31 July 2012 and of the Group’s profit for the year then ended;

•the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;

•the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

•the Parent Company financial statements are not in agreement with the accounting records and returns; or

•certain disclosures of Directors’ remuneration specified by law are not made; or

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/ private.cfm.

•we have not received all the information and explanations we require for our audit.