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Providing display solutions to a 
global industrial marketplace
Annual Report and Accounts  
for the year ended 31st December 2012
Registered Number: 1962726
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Welcome to  
Densitron Technologies plc
This report and more information on products  
and services are available on our website at: 
www.densitron.com
Scan with your 
smartphone to 
find out more
Densitron Technologies plc is a public company listed on 
the Alternative Investment Market (AIM) in London. For over 
40 years, the Densitron Group has been a leading global 
company in the electronic technology sector.
Today Densitron Displays operates in 35 countries worldwide, with offices in
the UK, Germany, France, Finland, Italy, the Netherlands, India, the USA, Japan 
and Taiwan. Densitron provides a focused and unrivalled service for a growing 
customer mix which seeks individual solutions in the areas of product display 
technologies. We work collaboratively with our global clients to deliver an end-to-
end service from product conceptualisation, design, manufacture and installation. 
In a world where consumer demand for information is expanding rapidly, it makes 
sense to ensure that the display solution brings the product capabilities to life.
Our Strategy
Revenue and profit growth through organic 
development of the core business, expansion 
of geographical reach and development of 
branded products and services.
Our corporate vision remains 
true to the core beliefs established 
in the 1970’s – innovative product 
design through:
•	Quality engineering; and
•	Integrated customer solutions
Why Densitron?
Densitron is a world leading provider of display 
technology solutions to the industrial marketplace. 
The Group’s unique selling points are its:
Operating from subsidiaries and branch offices 
and a network of distributors the Group is able 
to service customers throughout the world.
•	Geographical spread
•	Experienced workforce
•	Longstanding supplier relationships
•	Technical excellence
•	Professional sales and marketing network
Visit us 
online
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Our Business Our Governance Our Financials
1
www.densitron.com
Stock Code: DSN
Our Business
01 Highlights
02 Group at a Glance
06 Chairman’s Statement
08 Chief Executive Officer’s Review
Our Governance
11 Directors and Advisers
12 Report of the Directors
18 Independent Auditors’ Report
Our Financials
19 Consolidated Income Statement
20  Consolidated Statement of 
Comprehensive Income
21  Consolidated Statement of  
Financial Position
22 Consolidated Cash Flow Statement
23  Statement of Changes in 
Shareholders’ Equity
24 Notes to the Financial Statements
51 Company Balance Sheet
52 Notes to the Company Accounts
Financial Highlights
•	  Orders booked increased 9.0% to £23.1 million 
(2011: £21.2 million).
•	  Profit from operations of £0.6 million  
(2011: £1.1 million).
•	  Dividends for the year totalling 0.3p per share (2011: 
0.6p per share). 
•	 Earnings per share of 0.36p (2011: 1.18p).
•	 Gross margin decreased from 29.6% to 28.6% 
reflecting the mix of sales made during the year.
•	 New branch office in India has progressed well  
in the year.
•	 Optical Bonding Facility in Taiwan has been set up.
•	 A suite of software and smart TFT Solution 
(Ripdraw™) has been introduced.
Revenue (£000)
2008 2007 2009 2010 2012
14,043
18,287
15,123
20,770
2011
23,130
22,612
2008
2007
2009 2010 2012
-244
468
246
605
2011
1,061
520
Adjusted for exceptional gains and losses on asset disposals
Profit before tax
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2
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Group at a Glance
Densitron Technologies plc is a UK-based AIM Quoted Company whose primary business is the sale of electronic displays 
into the industrial marketplace. It operates through subsidiaries located in the UK, US, Japan, France, Finland, Germany and 
Taiwan along with offices in India, Italy and the Netherlands and a global network of distributors.
Our Areas of Operation
There are three main parts to the displays business operations:
Standard products
As this suggests this is a range of 
off-the-shelf displays provided by 
manufacturers. This type of business 
tends to be relatively low margin 
and requires high volume to make it 
viable and due to the nature of the 
products being standard, business is 
won on price meaning that customer 
retention is difficult. Standard 
products represent approximately 
20% of the Group’s business.
Custom business
This is where a standard display is 
taken and customised in order to 
meet a customers’ requirements. 
Order volumes tend to be lower 
than for standard products but 
margins achieved are higher due to 
the technical input by the Group’s 
engineers. Once the Group has 
designed a display to meet a 
customer’s requirements it is likely 
that the customer will continue to 
buy the display from the Group for 
the lifespan of its product. Custom 
business represents the largest part 
of the Group’s revenues making up 
approximately 60% of the total  
Group revenues.
Total solutions
This is where the business takes a 
complete product from a customer 
and manufactures it in its entirety. 
At this level the margins attracted 
start to fall again due to the low cost 
of the associated plastic housing. 
However, this type of business 
remains attractive as it generally 
means that a customer will be 
retained for the life of its product 
resulting in repeat business. Total 
solutions represent approximately 
20% of the Group’s revenues.
Product: Thin-Film Transistor
Description: Liquid crystal display that uses thin-film transistor 
technology to improve visual quality.
Key Uses: Computer monitors, mobile phones, handheld 
devices, metering equipment, navigational systems.
TFTs
Product: Organic Light-Emitting Diode (OLED)
Description: Displays that combine the benefits of organic light-
emitting technology, giving a brighter and clearer, richer image with 
those of an active matrix technology (as used on TFTs).
Key Uses: Mobile phones, personal digital assistants, portable 
handheld devices, digital cameras, household goods, dynamic 
information displays.
OLEDs
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Our Business Our Governance Our Financials
3
www.densitron.com
Stock Code: DSN
Product: E-Paper or E-Ink Displays
Description: Low power consuming displays that can retain an 
image without power. Power is only consumed when the display 
content is changed. The displays are designed to be sunlight 
readable with a very wide viewing angle.
Key Uses: Shelf labelling, security tags, advertising boards, direction 
signs, energy meters, notice boards, hospital patient cards.
E Paper
Product: Touchscreen Displays
Description: Touchscreen displays transform a standard TFT or 
monochrome graphic display into an interactive device.
Key Uses: Medical instrumentation, industrial and commercial 
interfaces, gaming equipment, vandal proof products.
Touchscreens
Since the 1970s, as one of the largest designers and 
manufacturers of display technology, Densitron Displays 
has established the best local design facilities wherever its 
customers are located in the world. Utilising state of the art 
production facilities, situated globally to take advantage of the 
most appropriate type of manufacture, the Group is able to 
deliver solutions to its customers that trouble even the largest 
blue chip OEMs.
Engineering Design
Monochrome
Product: LCD Module and LCD Glass
Description: Traditional forms of display technology that still perform a 
critical role in a world where consumer demand for information display 
is growing rapidly. Densitron LCD Modules ensure that the display 
solution brings the product capabilities to life.
Key Uses: Rack mounted servers, instrumentation, portable 
monitoring and measuring devices, multilingual instrumentation, 
medical monitoring equipment.
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Group at a Glance continued
Case Study
Optical Bonding
The rapid growth in consumer electronics has been 
particularly driven by the mobile phone and tablet markets. 
Each manufacturer is striving to produce a device that 
displays its information perfectly in all environments. A  
device can be made up of several different layers such as  
a display, touchscreen and cover lens and the gap that arises 
in between each of these layers can cause a reduction in the 
quality of the visual experience. The way in which this  
problem is solved is by bonding the layers together which 
prevents, for example, light reflection when a device is  
viewed in direct sunlight.
Whilst consumer electronics is not an area that the Group 
addresses, the quality of the displays in these devices has 
led to a demand in the markets that the Group does address 
and this demand is currently not being well served. The 
Group targets Original Equipment Manufacturers (OEMs) 
whose particular order requirements are generally for small 
and medium sized quantities of displays. Since the major 
manufacturers in Taiwan and China that provide bonding 
services typically concentrate on providing this service to the 
consumer markets, the Group identified an opportunity to 
provide a service to its customers that was currently either 
closed to them or difficult and expensive to achieve.
The Group has developed a process called Solisbond ® 
which offers optically bonded engineering solutions to its 
customers. The process entails using gel to bond the layers 
of a display together. This is undertaken in a vacuum chamber 
located in a clean room which has been set up in Taipei, 
Taiwan. Unlike the glue and curing process used in other 
solutions Solisbond ® allows for rework in the event of any 
issues during the process which reduces the level of yield 
issues. The advantages of the process are:
•	 Improved Sunlight Readability — It decreases reflection on 
the display glass from external light sources which improves 
the contrast ratio.
•	 Shock-resistant  — The adhesive is soft and not brittle.
•	 Reworkable process — The advantage here is that the 
process does not suffer from yield problems.
•	 Improved Luminance — The process reduces light loss from 
displays which use backlights which increases the brightness 
of the display by about 8%.
•	 Straightforward process — Other processes use glue and a 
curing process, this is not required using Solisbond ®.
•	 Green process and material
•	 Cost-effective — The solution is more affordable than the 
glue and curing process.
It is expected that the demand for this type of process will 
be considerable and Solisbond ® will be an extremely useful 
addition to the Group’s portfolio of products and services. Not 
only does it enable the business to offer an additional service to 
its existing customers aiding customer retention but it will also 
enable it to promote the service as an adjunct to the displays 
it promotes to potential customers. It will also help to generate 
business in Taiwan and China where there has been interest 
from display manufacturers that are unable to offer this service. 
The facility in Taiwan opened in December 2012 and there is 
already considerable interest in the process and the use of the 
facility and we would expect to see it operating to a significant 
level by the second half of 2013.
A display showing the benefits of optical bonding
Optical bonding process
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Our Business Our Governance Our Financials
5
www.densitron.com
Stock Code: DSN
Case Study
Ripdraw™ Smart TFT Product Line
The primary customer for the Group is an Original Equipment 
Manufacturer that has a small to medium sized requirement 
for electronic displays. In its simplest form the process for a 
customer to bring a product to market is:
•	 Design and development of the product itself – this is 
generally where a customer’s expertise lies.
•	 Selection of a display to be incorporated into the product – 
this is where the Group has its expertise and will work with 
the customer on the most appropriate solution.
•	 Development of software to display the information on the 
product – this is often outsourced to an expensive software 
design house.
In the past five years it has been increasingly difficult to 
guarantee customers’ longevity of supply of a particular 
display. Since the Group is dependent on third party 
manufacturers for its displays it cannot guarantee that a 
manufacturer will not withdraw a particular display from the 
market or change the components making up a display. 
This has the potential to alter the way in which information is 
presented on a display which can have an adverse impact 
on a customer’s product. The consequence of this is that a 
customer cannot guarantee that the display that was chosen 
to be incorporated into their product will be available in the 
medium to long term.
To overcome this problem the Group has developed the 
Ripdraw™ TFT. This solution works with all electrical and 
coding requirements that glass manufacturers and integrated 
circuit manufacturers may have now or may develop in the 
future meaning that the display will be available for the life of a 
customers’ product.
A second issue for customers is the ability to create the 
visual images to be displayed by their product. Often this is 
outsourced to software design houses which can not only 
be extremely expensive but also create a delay in getting 
a finished product to market. Over the past 18 months 
the Group has developed a straightforward solution that 
enables customers to design the way in which they present 
information on the display in their product. Using a cloud-
based system the Group has developed in excess of 8,000 
images which are simply incorporated using a seven level 
intuitive drawing tool. This means that a customer can take its 
own idea and quickly and easily incorporate it into its finished 
product. By using seven layers it gives the flexibility to build up 
a final design in stages with the ability to change each different 
element through the design process until the desired solution 
has been achieved.
The combination of these two solutions means that the Group 
has positioned itself not only to provide more to its customers 
than its competitors but also to introduce more value added 
products which will enhance the Group’s competitive edge. 
It has guaranteed that the display that is selected for the 
finished product will be available for the lifetime of the product 
eliminating the risk of a possible expensive redesign, and 
enabled the customer to eliminate the requirement to employ 
an expensive software house to design the imagery that will 
be displayed on the product. It also has the advantage that 
taking away this layer of the process will reduce the time it 
takes for a customer to get its product to market.
Both Optical Bonding and Ripdraw™ demonstrate the 
Group’s commitment to the development of the business and 
what can be achieved by organic growth. Through market 
knowledge the Group has been able to identify areas where 
its customers will benefit from additional services provided by 
the Group, and through technical knowhow the Group has 
been able to deliver these services to the market. The Group 
will continue the process of developing products and services 
that will add value to the products and services it provides 
to further enhance its position in the markets in which it 
operates.
  Read more at: www.densitron.com
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Chairman’s Statement
to offer a service to customers to improve the quality of the images 
displayed by their product. In addition we have developed a 
suite of software (Ripdraw™) and smart TFT line that will enable 
customers to develop their own design to display their information 
without the requirement for employing expensive software 
developers. We anticipate that both of these new developments 
will enable our business to not only develop new customers but 
retain existing ones by ensuring the business is offering more to its 
customers than its competitors.
Land at Blackheath
The Group owns a 1.25 acre piece of land that the Group owns 
in Blackheath, South East London.
I reported in my statement last year that we were working on 
the reclassification of the land through the Local Development 
Framework and also exploring existing use rights on the site. 
This continues to be the case with the Local Development 
Framework issuing its consultancy document on 14th February 
2013 with a consultation period of 3 months. We have lodged 
representations detailing the reasons that we consider that the 
land should no longer be designated as Metropolitan Open 
Land. Following the consultation period the plan will be revised 
and passed to a Planning Inspector who will review the plan 
and the key issues during a period of public examination prior to 
submitting the final plan to the Secretary of State for approval. It 
is likely that the timescales involved in the process will mean that 
the final plan will not be adopted by the Council until next year. 
In the meantime the Council has confirmed the existing use 
class of the land and clubhouse as D2 and accordingly issued 
an appropriate certificate of lawful use for both the land and 
clubhouse. This confirmation was received in April 2013 and it 
is now our intention to submit a planning application to develop 
the footprint of the clubhouse into a residential dwelling.  We will 
continue to advise Shareholders when there is further information 
to report.
Shareholders
Capital growth – It is disappointing that the share price fell 25% 
during the year and has further weakened since the year end. 
I believe that this was in part due to operational performance 
and in part due to the uncertainty caused by the ongoing issue 
of the claim against the Company in respect of the lease of a 
property in Newcastle. The Executives have continued to meet 
with investors and potential investors during the year to present 
our business and future expectations and will continue to do so 
throughout the year. 
Introduction
It is disappointing to report on the results for the year ended 
31st December 2012 as I do not believe that they truly reflect 
the positive progress that the business has made over the last 
five years. The results reflect a general lack of confidence in 
the economy and caution exercised by customers which has 
resulted in delays to orders which themselves have been at lower 
levels than originally anticipated. Together with some additional 
supply issues this has caused revenues to be at a lower level 
than expected and consequently operating profit to be lower 
than that achieved in the previous year. Nevertheless, I am 
pleased to report that the investment made over the year will 
enable the business to progress during the ensuing years.
Densitron Displays
The year was an extremely challenging and ultimately frustrating 
one for the displays business. Right up until the end of the 
year there was an expectation that certain revenues would be 
achieved but for reasons outside the Group’s control these 
were delayed causing a shortage in the expected revenues and 
consequently operating profit for the year.
I outlined in my statement in the 2011 Annual Report that four 
specific business objectives had been identified and would be 
incorporated into the business plan:
•	 Increase in market share from the existing business;
•	 Geographical expansion of the business;
•	 Introduction of new products to the current product offerings; 
and
•	 Creation of more value by development of the Group’s own 
products and intellectual property.
The first three of these objectives reflect how the business had 
been grown over the previous years and as objectives they remain 
unchanged but due to the global recession it has been difficult to 
increase our market share. However, at the beginning of 2012 we 
opened an office in India and this has progressed satisfactorily 
with a strong pipeline of business opportunities being developed. 
It is a complex marketplace and one that we will look to develop 
further as we see revenues being generated over the next 12 
months. At the end of 2012 we appointed a commissioned agent 
to exclusively represent the business in The Netherlands and we 
are already seeing new opportunities for business in that region. 
We have also continued to expand on our existing product offering 
including our new range of E-Paper technology that generated its 
first sales during the year.
The final objective is an intention to differentiate the business from 
its competitors by offering either internally developed products or 
by providing additional services. During the year we have opened 
an Optical Bonding facility in Taiwan that will enable the business 
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Our Business Our Governance Our Financials
7
www.densitron.com
Stock Code: DSN
Share Price
02/01/2012
02/02/2012
02/03/2012
02/04/2012
02/05/2012
02/06/2012
02/07/2012
02/08/2012
02/09/2012
02/10/2012
02/11/2012
02/12/2012
0
2
4
6
8
10
12
14
Dividends
An interim dividend of 0.2p per share was paid to Shareholders 
in September 2012. Considering the results for the full year I 
think it is appropriate to propose a final dividend for the year 
of 0.1p per share (2011: 0.4p per share) resulting in a total 
dividend payment for the year of 0.3p per share (2011: 0.6p 
per share). This represents a return to Shareholders of 85% of 
profit for the year (2011: 51%). The Board remains committed 
to paying dividends to its Shareholders but will do so taking into 
account the requirements of the Group to ensure continued and 
sustained growth.
Claim against the Company
I reported in my statement in the 2011 Annual Report that the 
Company had received a writ in respect of unpaid rents on a 
property occupied by a former Group Company. Having reviewed 
all of the documentation surrounding the lease, some of which 
dates back more than 10 years with our Lawyers, we believe 
that there is considerable uncertainty surrounding the lease. We 
believe that the most appropriate way forward is to achieve a 
negotiated settlement with the Landlord to bring this matter to a 
close in order to avoid further substantial costs accruing on both 
sides and to make it possible to let the property which currently 
stands empty. At this stage we are unable to say at what level 
that settlement would be achieved. More details of the writ are 
discussed in note 29 of the accounts on page 49.
Outlook and strategy
The Board regularly reviews the medium and long term strategy 
for the business and believes the main driver of the business 
should remain organic growth. I have already written about the 
strategy in my review of the business above and consider that 
the results from this strategy have yet to be realised to their 
maximum potential.
During the year, through internal development, we have added 
two potentially significant revenue streams with the Optical 
Bonding line and Ripdraw™ software and smart TFT Line. We 
begin 2013 with little or no revenue from these two new products 
but consider that the demand for optical bonding in particular will 
grow rapidly during the year. However, we expect that Ripdraw™ 
will take longer to generate significant levels of business due to 
its complexity and consider that revenues will start to be made in 
the second half of the year and beyond.
The addition of an office in India provides a great opportunity 
for the business but it is a difficult market so it is taking time to 
develop. At the beginning of 2013 we have a good pipeline of 
business opportunities and we expect to see those opportunities 
being turned into orders and revenues during the current year.
Overall the first four months of the year have been mixed with 
parts of the Group exceeding expectations while other parts 
have found closing business to be particularly difficult. The 
pipeline of new business remains strong and we expect to see 
this being converted into new orders over the next few months. 
We have addressed certain operational issues which should 
mean that the business is more focussed and able to support its 
customers more effectively going forward.
I would like to thank the Directors and staff throughout the Group 
for their continued dedication during what has turned out to be  
a very difficult year. Despite the difficulties of 2012 the Group is  
in a far better position to move forward than it was even three 
years ago.
Finally I would like to thank the Company’s Shareholders for their 
continued support.
Jan G Holmstrom
Chairman
21st May 2013
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Chief Executive Officer’s Review
We began 2012 with optimism that the economic climate was 
improving and together with the changes that had been made 
to the business over the previous few years and the plans to 
strengthen the business further the prospects were good that 
the progress the business had made during the previous 12 
months would continue. Unfortunately, in the markets in which 
we operate, rather than seeing confidence return we saw a 
continuation of uncertainty and consequently caution from 
our customers. This has had the result of customers delaying 
placing new orders, placing new orders at lower levels and more 
importantly, delaying bringing new products to market. Right 
up to the end of the year we were expecting certain additional 
revenues to be delivered but ultimately this did not happen and 
have been delayed into 2013. We are now beginning to see 
some of these projects being finalised and the orders starting to 
come through.
With this backdrop it would be very easy to write the year off as 
a bad year and emphasise that 2013 will improve but despite the 
issues faced during 2012 there have been some very important 
and positive progressions in the business. We have continued 
to expand geographically, introduced new product offerings that 
contain our own intellectual property and developed additional 
services to attract new and retain existing customers. This 
demonstrates the continuing development of the business and 
will ensure that it is positioned to enable it to deliver growth into 
the future.
Performance for the year
Overall the results for the year were disappointing with 
the growth that was expected at the start of the year not 
materialising. Revenues decreased by 2% from £23.1 million 
in 2011 to £22.6 million in 2012 and gross profit by 6% from 
£6.9 million in 2011 to £6.5 million in 2012. The gross margin 
percentage decreased from 29.6% in 2011 to 28.6% in 2012 
primarily reflecting the mix of business being conducted during 
the year but also indicating the pressure the business is under 
to offer competitive pricing to customers. Combining this with a 
small increase in operating expenses, operating profit decreased 
from £1.1 million in 2011 to £0.6 million in 2012.
Orders booked during the year increased by 9% from £21.2 million 
in 2011 to £23.1 million in 2012 indicating the potential for future 
growth.
Regional review
European business — The European business describes the 
location of where business is managed from so can incorporate 
sales outside the region. It is made up of four subsidiaries, three 
local offices and a number of distributors located throughout 
Europe and in other key locations.
Densitron Europe Ltd is the Group’ s UK subsidiary responsible 
for sales in the UK, management of offices in Italy, India and the 
Netherlands, management of the Group’ s distribution network, 
providing support to other European subsidiaries and direct sales to 
other regions where the Group does not have a physical presence.
During 2012 the revenues remained flat at £6.1 million while 
gross profit decreased by 19% from £1.9 million in 2011 to £1.7 
million in 2012. Order intake increased by 17% from £5.4 million 
in 2011 to £6.3 million in 2012. As a result of a decrease in gross 
margin and an increase in administrative expenses following a 
decision to invest in the future of the business, the UK generated 
a small loss before taxation compared with a profit of £338,000 
in 2011. For the medium and long term future of the business it 
was essential that investment was made in the business during 
the year and the benefit of this is reflected in the increase in 
orders booked which will enable the UK business to return to 
growth during the coming year.
The office that was opened in India at the beginning of 2012 
has been slower than expected in delivering business. However, 
during the year a strong pipeline of business opportunities has 
been developed and we would expect to see those being turned 
into revenues during the coming year. India is undoubtedly 
an excellent opportunity for the business but is a very difficult 
market to operate in and is taking longer to develop than we 
had hoped. We expect that the new products and services that 
have been developed will be particularly attractive to the Indian 
market and remain confident that it will be a region that will 
deliver significant business to the Group in the future. Towards 
the end of 2012 the UK appointed a commissioned agent in 
the Netherlands to promote the Group’s products in that region 
further demonstrating the Group’s commitment to expanding the 
business geographically.
2008 2007
■  Orders    ■  Sales
£0
£5
£10
£15
£20
£25
2009 2010 2012 2011
Performance Highlights
Order and sales 2007 to 2012 (£m)
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Our Business Our Governance Our Financials
9
www.densitron.com
Stock Code: DSN
During 2011 France made a number of higher volume sales at 
lower margin; in 2012 these sales were not repeated resulting 
in a fall in revenues from £3.5 million in 2011 to £2.4 million in 
2012. The margin percentage achieved on external sales in 2012 
improved from 23.3% in 2011 to 26.9% in 2012. Together with 
the control of administration expenses this has resulted in the 
operating profit of the business remaining similar to that achieved 
in 2011.
Germany is the largest market for displays in Europe but as 
a result of this it is also the most competitive. During the year 
revenues declined in Germany from £2.3 million in 2011 to  
£2.1 million in 2012. Following a year of declining revenues in 
2011 action was taken to restructure the business in Germany 
during 2012 and we now believe that the structure is appropriate 
to be able to effectively service the market. Despite the decline 
in revenues the restructuring enabled savings in administration 
expenses which resulted in a small increase in operating profit. 
Orders booked in the year increased from £1.7 million in 2011 
to £2.2 million in 2012 indicating that the restructuring that was 
done has made the business more effective.
Finland achieved a similar result to that achieved in the previous 
year of revenues of £0.5 million and a small loss. Opportunities 
remain in Finland but competition in certain product lines has 
increased markedly in the last few years. As such the business 
will benefit from the differentiation the new product lines and 
services that the Group is able to offer will bring over the next  
12 months.
US business — The US business continued to perform 
extremely well with revenues increasing 2.6% from £7.8 million 
in 2011 to £8.0 million in 2012. However, due to a decrease in 
gross margins and an increase in administrative expenses the 
operating profit reduced from £774,000 in 2011 to £656,000 in 
2012. Orders booked in the year fell by 1.3% from £7.7 million in 
2011 to £7.6 million in 2012.
The US business identified Brazil as a growing economy and 
one which the Group could expand into successfully. It has tried 
several ways to penetrate this market but as yet with limited 
success, it continues to believe that there are opportunities in 
Brazil and will continue to pursue them in the future.
Asian business — The Asian business is made up of the 
Group’s subsidiary located in Japan selling display products into 
the Japanese market and a subsidiary that is located in Taiwan 
that acts as a facilitator to the Group for product that is sourced 
and manufactured in Taiwan and mainland China. It also has a 
limited amount of sales into the Taiwanese domestic market.
Japan continued to grow during the year increasing revenues 
by 20% from £2.4 million in 2011 to £2.9 million in 2012. It also 
increased its profit from operations from £307,000 in 2011 to 
£331,000 in 2012, an increase of 8%.
Densitron Display Taiwan Ltd provides the Group with a support 
operation that provides project management, engineering 
support and supplier relationship services to the rest of the 
Group. It also provides some direct sales into the Taiwanese 
market and the management of the Bonding Facility opened 
at the end of 2012. In the current year external revenues 
remained at a similar level but due to a fall in intra Group trading 
Densitron Display Taiwan returned an operating loss of £100,000 
compared with a profit of £71,000 in 2011. The introduction 
of the Bonding Facility is a key component to generating more 
external business in Taiwan and China and the early indications 
are that this will be a service that is marketable directly to Far 
East customers.
Developments
I identified in my report in the 2011 Annual Report that it was 
essential that in order for the business to move to another level it 
needed to create its own products and consequently intellectual 
property. Over the last 12 months we have developed Ripdraw™ 
and opened our own Optical Bonding Facility. There are detailed 
case studies on both of these developments in this Annual 
■  2009
■  2010
■  2011
■  2012
£0.0
£1.0
£2.0
£3.0
£4.0
£5.0
£6.0
£7.0
£8.0
£9.0
USA UK Germany France Finland Japan Taiwan
Sales by location of subsidiary over past four years (£m)
Densitron AR2012.indd   9 21/05/2013   14:03:18 22418.04      21 May 2013 1:58 PM    PROOF 7
10
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Report so I will not explain in great detail what each is but I will 
explain the reasoning behind the development of them and what 
they will offer the business going forward.
Optical Bonding — The Group has offered optical bonding to 
its customers for some time through a third party manufacturer. 
However, there have been a number of issues involved with 
the process which has limited its effectiveness. The volumes of 
displays for bonding that the Group has subcontracted to third 
party manufacturers have been small and consequently have 
not been prioritised by the manufacturer causing excessive 
lead times between order and delivery. In addition the process 
used by the manufacturer has led to yield problems causing 
substantial quantities of displays to be destroyed during the 
process. The main reason for the yield rate was the inability to 
rework any errors which resulted in displays being scrapped. 
We identified that most manufacturers that offer this service are 
targeting the mobile phone and tablet markets so the volumes 
that our customers and our competitors’ customers were 
ordering were always going to be a low priority. We considered 
that if we could offer this service ourselves at a cost effective 
price it would enable us to provide a greater service than our 
competitors making the business more attractive to potential 
customers. We spent some time reviewing the options and found 
a solution that is far simpler than that used by our manufacturer 
which reduces the yield issues considerably as any problems 
can be reworked and means that smaller sample orders can 
be delivered to customers as well as larger production orders. 
We have already seen interest from manufacturers that aren’t 
currently offering optical bonding which is the reason we have 
confidence that this will enhance the opportunities to generate 
additional business in China and Taiwan.
Ripdraw™ Software — A barrier to small businesses including 
a display in their product is the cost of the development of the 
software required to project the images required. In most cases 
software houses are employed which can be very expensive. 
The software suite developed by the Group enables a user to 
develop the way in which they project the information on their 
display quickly and easily. The fact that a customer can do this 
for themselves means that they can develop a product and 
get it to market far quicker than they would be able to if they 
employed a software house. In the past the decision as to which 
display to put in a product may have been taken on price which 
would have often meant that the Group could not compete with 
the distribution arms of the major manufacturers. By offering 
software with the display it means that a new range of customers 
will be open to the Group.
Ripdraw™ Hardware — this provides a total plug and play 
solution for customers requiring a certain quality of display 
(guaranteed for three to five years) with touchscreen and pcb 
(printed circuit board) built in. This niche product will be a major 
requirement in certain markets.
Outlook and future strategy
The development of any business rarely runs smoothly and the 
performance of the business in 2012 is a case in point. At the 
end of 2011 we were confident that the growth we had seen 
in the previous years would continue and invested to take the 
business forward. The continuing lack of confidence in the 
economy shown by our customers has undoubtedly held the 
development of the business back but within these constraints 
we have been able to deliver most of the strategies outlined in 
my 2011 report. The overall strategy of organic growth remains in 
place and within that there are four key strategies for developing 
the business:
•	 Increasing market share from the existing business — as a 
result of the lack of confidence in the markets in which the 
business operates we were unable to achieve this during the 
year but it will be an area of key focus during 2013. Each 
of the subsidiaries has targets that they themselves have 
set as being achievable and the cost bases have been set 
accordingly to meet the targets;
•	 Geographical expansion of the business — in 2012 we 
opened offices in India and the Netherlands. In 2013 we do 
not have specific plans to open new offices but will continue to 
try and address the Brazilian market;
•	 Introduction of new products to the current product offerings 
— during 2012 we introduced a range of our own TFT displays 
and will continue to develop products as we see a need for 
them within the business; and
•	 Creation of more value by development of the Group’s own 
products and consequently intellectual property — we have 
developed Ripdraw™ and opened the Bonding Facility. Neither 
of these opportunities brought any revenue to the business 
during 2012 so we would expect to see additional revenues 
from these business streams going forward. We are committed  
to increasing the intellectual property within the business and 
to that end will continue to identify areas where we can add 
value to the products that we offer our customers.
I would like to thank all of the staff within Densitron for their hard 
work during what was a very difficult year and look forward to the 
business returning to growth during the forthcoming year.
Grahame Falconer
Chief Executive Officer
21st May 2013
Chief Executive Officer’s Review
continued
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11
www.densitron.com
Stock Code: DSN
Our Governance Our Business Our Financials
Jan Holmstrom
Non-Executive Chairman (appointed October 2007)
Jan is the nominee of Bronsstädet AB and is the Managing 
Director of Browallia AB, a subsidiary of Bronsstädet AB. He 
has broad management experience in the UK and the Far East 
and is a non-executive director of several other UK companies. 
Jan is a member of the Nomination, Remuneration and Audit 
Committees.
Grahame Falconer
Chief Executive Officer (appointed August 2004)
Grahame joined the Board as Sales and Marketing Director in 
August 2004. He has a BSc Hons in Computing Sc from the 
University of Glasgow and a Diploma in Management Studies. 
Following the move to a divisional structure he became the 
Managing Director of the Display Solutions Division and was 
appointed Chief Executive Officer in 2008. He is a member of 
the Institute of Sales and Marketing, formerly serving as Global 
Sales and Marketing Director of StatPro Plc and was previously 
Strategic and European Sales Director of Netg Plc.
Richard Lane OBE
Non-Executive Director (appointed June 2005)
Richard is a Chartered Accountant, who retired as a Senior 
Partner from the Bromley Office of BDO Stoy Hayward, 
Chartered Accountants in December 2003. He specialises in 
advising businesses on the development and implementation 
of their growth strategies. He is very much involved in a variety 
of local and national charities, including being President of 
Diabetes UK, and other voluntary sector organisations. Richard 
is the Chairman of the Audit Committee and a member of the 
Nomination and Remuneration Committees.
Tim Pearson
Group Finance Director (appointed April 2007)
Tim is a member of the Institute of Chartered Accountants 
England and Wales and has a BA (Hons) in Accounting and 
Finance. He joined the Group in 1992 and gained experience in a 
number of financial and accounting positions. He was appointed 
Company Secretary in 2002 and joined the Board as Finance 
Director in April 2007.
John Farrell
Non-Executive Director (appointed January 2010)
John is the owner and managing director of the Sterling Property 
Holdings group of companies and controls Sterling Trust Ltd. 
Prior to acquiring control of Sterling Trust in 1993, he worked in 
various banks in the City of London including Morgan Grenfell  
& Co and The Bank of New York, specialising in corporate 
finance and corporate and asset based lending. John is the 
Chairman of the Remuneration and Nomination Committees and 
a member of the Audit Committee.
Secretary and Registered 
Office
Tim Pearson
4th Floor
72 Cannon Street
London EC4N 6AE
Nominated Adviser and 
Stockbroker
Westhouse Securities Ltd
One Angel Court
London EC2R 7HJ
Solicitors
K & L Gates
One New Change
London EC4M 9AF
Auditors
BDO LLP
2 City Place
Beehive Ring Road
Gatwick
West Sussex RH6 0PA
Principal Banker
Barclays Bank Plc
80 High Street
Sevenoaks
Kent TN13 1LR
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Directors and Advisers
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12
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
The Directors have pleasure in submitting this report together 
with the accounts of Densitron Technologies plc (‘the Company’) 
and its subsidiary undertakings (together ‘the Group’) for the year 
ended 31st December 2012.
Principal activities and results
The Group’s principal activities are in the design, development 
and delivery of display technologies and related electronics on 
an international basis. It operates from subsidiaries based in the 
UK, US, Japan, Taiwan, France, Finland and Germany along with 
offices in India and the Netherlands and a network of distributors 
to enhance its global reach.
The Group profit after taxation and non-controlling interests 
amounted to £244,000 (2011: profit £816,000).
Review of the business
The Directors are disappointed that the business has not 
progressed in the way in which it did during the previous year. 
The negative global economic conditions have undoubtedly 
caused customers to be more cautious in both the way in which 
they purchase to ensure that they are holding a minimum amount 
of inventory and the time taken to take a product to market 
to ensure that it has the best chance of success at its launch. 
Combining this with factors such as long term business coming 
to an end during the year and new business initiatives taking 
longer than expected to make an impact the Group’s revenues 
have fallen by 2.2% from £23,130,000 to £22,612,000 and gross 
profit by 5.6% from £6,856,000 to £6,473,000.
The level of orders received during the year increased by 9% 
from £21.2 million to £23.1 million which gives the Directors 
confidence that the business will return to growth during the 
coming year.
Key performance indicators
The Directors set budgets for the year which are reviewed 
against the management accounts on a monthly basis. In 
addition to these results the Directors review a number of 
key performance indicators to assess the performance of the 
business and assist in decision making. Some of the indicators 
that are monitored are:
Order intake — The first tangible indicator of the health of the 
Group is the level of orders that are being booked. The Board 
monitors not only the level of orders booked during each month 
against budget but also the 12 month moving average order 
intake. In order to achieve its medium term strategy the Board 
needs to be comfortable that, while orders booked on a monthly 
basis may be subject to peaks and troughs, the moving average 
trend is at an adequate level. During the year the orders that 
were booked amounted to £23.1 million (2011: £21.2 million) 
against a budget of £27.8 million (2011: £23.9 million). The 
Directors are disappointed that the target that was set has not 
been achieved and this reflects the facts that some existing 
customers did not place orders to the level that was expected, 
new business initiatives have taken longer to generate tangible 
returns and several projects have been delayed by customers 
into 2013. The Directors are confident that the level of business 
opportunities (the pipeline) being worked on are at a sufficient 
level to ensure that the level of orders will grow into the future.
Revenue — The Board considers that the growth of revenue 
is key to the future of the business. While building order input 
is important it is imperative that these orders are delivered to 
customers in a timely manner. During the year the revenue 
achieved was £22.6 million (2011: £23.1 million) against a 
budget of £27.1 million (2011: £22.9 million). The Directors are 
disappointed with the level of revenues achieved during the 
year but are confident that with the steps that have been taken 
within the business, such as investment in new revenue streams, 
introduction of new products and geographical expansion will 
ensure that there will be a return to growth during 2013.
Book to bill ratio — The book to bill ratio is the ratio of orders 
taken to sales made. The Board recognises that in order for the 
business to grow the Group needs to be booking orders at a 
ratio of orders to sales in excess of 1. The ratio is looked at on a 
weighted average basis in order to take account of fluctuations 
from month to month. The weighted average ratios achieved on 
the business’s operations was 1.02 (2011: 0.92). The Directors 
consider that the positive book to bill ratio is an indication that 
the business is growing again.
Gross margin percentage — The Board recognises the 
importance of growing the Group’s turnover but believes that this 
should only be done at acceptable margins. To that end gross 
margin targets are set and monitored. The margin achieved on 
operations was 28.6% (2011: 29.6%) against a target of 29.1% 
(2011: 29.5%). The Directors consider that the reason for the fall 
in gross margin is primarily the mix of sales made during the year 
but recognise that, due to the competitive nature of the markets 
in which the business operates, the pressure on gross margins 
will continue into the future.
Report of the Directors
Densitron AR2012.indd   12 21/05/2013   14:03:18 22418.04      21 May 2013 1:58 PM    PROOF 7
13
www.densitron.com
Stock Code: DSN
Our Governance Our Business Our Financials
Operating margin — The Directors consider that the operating 
margin (the ratio of operating profit to revenue) is important to 
ensure that the business is deriving an acceptable return for its 
Shareholders. The Group’s goal is to achieve between 8% and 
10% but recognise that to do this the business needs to grow 
while expenses are controlled. The return achieved during the 
year was 2.5% (2011: 4.7%) against a budget of 6.9% (2011: 
6.9%). The Directors consider that the reason for the fall in 
operating margin was primarily due to the fall in revenues. They 
remain committed to improving the operating margin and to that 
end have invested in revenue streams that will not only provide 
additional revenues but also a better return through the creation 
of intellectual property.
Working capital ratios — The Board recognises the need to 
not have its cash tied up excessively in working capital and to 
that end sets targets for inventory days, debtor days and creditor 
days.
Inventory — The actual number of days carried in inventory  
was 29 days (2011: 29 days) against a target of 23 days  
(2011: 20 days). In both years the Directors took the decision 
to hold certain levels of stock of certain products due to 
discontinuation of product lines. The stock held for this purpose 
in 2011 was sold during 2012 and it is expected that the stock 
held at the end of 2012 will be sold during 2013.
Debtors — This represents the number of days taken to collect 
amounts due from customers. In 2012 the average collection 
was 56 days (2011: 52 days) against a target of 54 days 
(2011: 64 days). Although a target is set for which debtors are 
monitored against, the time taken in which to collect debts is 
largely determined by the credit terms afforded to customers. At 
the current level the Directors are comfortable that there are no 
issues with the debts.
Creditors — This represents the length of time to settle the 
Group’s liabilities. The average time taken to settle liabilities in 
2012 was 40 days (2011: 44 days) against a target of 39 days 
(2010: 40 days). The Directors ensure that amounts due are 
settled within a reasonable timeframe in order to maintain a good 
relationship with the Group’s suppliers. The Directors are satisfied 
with the timeframe in which liabilities were settled during the year.
Post balance sheet events
On 17 April 2013 the Group received a Certificate of Lawful Use 
on the clubhouse and land that it owns at Blackheath, South 
East London. This is the first stage of being able to progress the 
Group’s strategy of developing existing use rights of the site.
Risks and uncertainties
The Directors recognise that risk is inherent in any business and 
seeks to manage risk in a controlled manner. The key business 
risks are set out below:
Commercial — The market for displays continues to grow 
despite continuing global economic uncertainties. Within the 
market there is considerable competition for business with a 
number of competitors located in each of the regions in which 
the Group operates as well as the distribution arms of the major 
manufacturers. In order to try and mitigate the commercial risk 
that it faces, the Group targets a specific niche in the market that 
is less attractive to a distributor due to the volumes and technical 
complexity of the products being sold. The Group targets low 
volume customised business which requires significant technical 
input and thus is less attractive to pure distributors who generally 
target high volume business at lower margins. With the level of 
technical expertise that it has developed over a number of years, 
the Group is able to compete successfully against companies 
that target the same type of business in the regions in which it 
operates.
Geographic and environmental — All companies are subject 
to risks associated with geographical and environmental issues. 
In the last few years the Group has faced disruption as a result 
of the Icelandic volcano and the earthquake and subsequent 
tsunami in Japan. These environmental issues cannot be 
managed directly by the Group but by having a global spread of 
subsidiaries and customers and a range of suppliers the impact 
on the Group can be limited.
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14
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Economic — The Group is subject to the same economic risk 
that other businesses are subject to during a period of economic 
downturn. The Group seeks to manage this risk in a number  
of ways:
•	 By maintaining a broad range of customers and suppliers.
•	 Ensuring that the business conducts business globally.
•	 Operating in a wide range of markets.
•	 By setting the amount of core business expense at a level 
required to support the forecast level of business.
Supply chain — A substantial part of the Group’s business is 
long term and repeat business. To be able to deliver continuous 
supply to customers this depends on suppliers being able to 
deliver on time and to the same quality over a number of years. 
This is managed by close relationships being formed with a 
number of key suppliers and frequent quality reviews being 
carried out.
Employee risk — The type of business that the Group conducts 
relies on the technical knowledge of its staff to be able to work 
with its customers to develop the best solution for the customer’s 
requirements. Due to the competitive nature of the markets in 
which the Group operates it cannot guarantee to retain key staff 
within the business which could potentially damage its future 
growth potential. In order to mitigate this risk the Group has 
entered into contractual arrangements with all key individuals and 
incentive plans have been designed to retain their services.
Financing — The Group’s funding requirements are primarily 
provided by its Bankers. The Board seeks to maintain close 
relationships with its funders to ensure a good working 
relationship by providing monthly reporting information and 
holding regular meetings to give an update on the business and 
strategy.
Financial — The Group has a specific exposure to credit 
risk, foreign currency risk and liquidity risk. The Directors have 
adopted a range of methods in which they seek to manage these 
risks. Further details in the way in which these risks are managed 
are discussed in note 22.
The Group holds a weekly Executive Meeting at which the 
business risks are reviewed and any areas that are causing 
concern are discussed and an action plan to either manage the 
risk or resolve any issues is put in place.
The risks outlined above are not an exhaustive list of the risks 
faced by the Group and are not intended to be presented in any 
order of priority.
Dividends
A dividend of £138,338 equating to 0.2p per share was paid in 
the year (2011: £138,338) and the Directors recommend the 
payment of a final dividend of £69,669 equating to 0.1p per 
share (2011: £278,676).
Research and development
The Group’s activities in this field relate to the development of 
specific projects and products for commercial purposes.
Directors
The Directors that served during the year were:
J Holmstrom — Non-Executive Chairman
R Lane — Non-Executive Director
G Falconer — Chief Executive Officer
T Pearson — Group Finance Director
G Hayes — President Densitron Corporation of America 
(resigned 7 March 2012)
J Farrell — Non-Executive Director
In accordance with the Articles of Association, Mr T Pearson 
retires by rotation and, being eligible, offers himself for  
re-election.
The Director seeking re-election does not have a service contract 
with the Company or any of its subsidiaries of more than one 
year’s duration nor requiring more than one year’s notice of 
termination.
Biographies of all Directors are given in the Directors and 
Advisers’ section on page 11.
Employees
The Group has continued to give full and fair consideration 
to applications made by disabled persons, having regard to 
their respective aptitudes and abilities, and to ensure that they 
benefit from training and career development programmes 
in common with all employees. The Group has continued its 
policy of employee involvement by making information available 
to employees through the medium of frequent staff meetings, 
together with personal appraisals and feedback sessions.
Share options
Historically the Company’s policy has been to grant options to 
reward special services to the Company or to meet specific 
requirements. There has been no departure from this policy 
during the year under review and there were no share options in 
place at the end of the year.
Report of the Directors
continued
Densitron AR2012.indd   14 21/05/2013   14:03:18 22418.04      21 May 2013 1:58 PM    PROOF 7
15
www.densitron.com
Stock Code: DSN
Our Governance Our Business Our Financials
Substantial shareholdings
As at 1st May 2013, the following interests in 3% or more of the 
issued ordinary share capital appear in the register maintained 
under the provisions of Section 808 of the Companies Act 2006.
 
No. of shares 
Percentage
of issued  
share capital
Mr Peter Gyllenhammar 20,745,000 29.78%
Sterling Property Trust Ltd 11,509,675 16.52%
Nordea Bank Luxembourg 4,406,308 6.32%
Mr and Mrs W and  
S Campbell 3,150,000 4.52%
Payment of creditors
The Group does not follow any published code or statement 
on payment practice. However, it is the Group’s policy to settle 
all amounts due to its creditors on a timely basis, taking into 
account the credit period given by each creditor. Further details 
on the payment of creditors is given in the key performance 
indicator section earlier in this report.
Corporate governance
There is currently no requirement for AIM companies to comply 
with current corporate governance guidelines but the Board 
considers that it is appropriate to do so insofar as they are 
appropriate for a company of this size.
Board of Directors
The Board of Directors comprises the Chairman, two Executive 
Directors and two Non-Executive Directors. Their biographical 
details are shown on page 11 under Directors and Advisors. 
The intention is to maintain a Board with a broad range and 
level of business experience which will enable it to provide clear 
and effective leadership of the Group. The Board meets at least 
six times a year and more frequently if required. The Board 
has a schedule of matters reserved to it for decision and the 
requirement for Board approval on these matters is known to 
the senior management within the Group. These include such 
matters as appointments to the boards of subsidiaries, material 
capital investment projects, material revenue commitments 
and business acquisitions and disposals. Below the Board and 
responsible for day to day business matters and issues and 
driving Board strategies is the Executive Board which is chaired 
by the Chief Executive Officer and comprises the Chairman, 
Finance Director and President of the US subsidiary. The 
Executive Board generally meets on a weekly basis.
Each of the Directors is subject to election by the Shareholders 
at the first opportunity after their appointment and to re-election 
at regular intervals or at least every three years.
There is an agreed procedure by which the Directors may take 
independent professional advice in the furtherance of their duties 
as Directors at the expense of the Company. Each of  
the Directors has access to the advice and services of the 
Company Secretary.
Committees — The Group has three committees: the 
Nomination, Remuneration and Audit Committees.
The Nomination Committee is chaired by John Farrell and is  
made up of Jan Holmstrom and Richard Lane. The committee 
meets as required to recommend the filling of a vacant position 
on the Board.
The Remuneration Committee is chaired by John Farrell and is 
made up of Jan Holmstrom and Richard Lane. The committee 
meets as required and is responsible for the recommendation of 
the Executive Directors’ remuneration. The Board is responsible 
for the approval of all remuneration packages with the Director 
whose pay is under review excluded from the approval process.
The Audit Committee is chaired by Richard Lane and made up 
of Jan Holmstrom and John Farrell. The committee meets as 
required during the year and meets with the Group’s Auditors 
regarding the Annual Report and accounts prior to submission  
to the Board for approval.
Communication with Shareholders
The Company recognises the importance of communication with 
its Shareholders to ensure that its strategies and performance 
are clearly understood. This is principally achieved through the 
Company’s Interim and Annual Report along with the Annual 
General Meeting. In addition a range of corporate information is 
available on the Company’s website. The Executives additionally 
carry out roadshows following the announcement of the Interim 
and Annual Reports to give further details of the results and the 
Company as a whole to investors and prospective investors.
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16
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Accountability and audit
Internal financial controls — the Board of Directors has 
overall responsibility for the Group’s system of internal financial 
controls, which have been designed to provide reasonable, but 
not absolute assurance against misstatement or loss. The key 
procedures that the Group has are:
•	 A comprehensive budgeting process at subsidiary level which 
is reviewed by the Executive team prior to recommendation to 
the full Board.
•	 Monitoring of actual results compared to budget for each 
subsidiary on a monthly basis.
•	 A clearly defined organisation structure for each subsidiary 
detailing the roles and responsibilities of each of the 
subsidiary’s personnel.
•	 Defined procedures for the appraisal, review and authorisation 
of revenue, capital and development expenditure.
Going concern
The Group’s business activities, together with the factors 
that are likely to affect the future of the business are set out 
in the Chairman’s statement on pages 6 and 7 and the Chief 
Executives’ report on pages 8 to 10.
The Directors have reviewed the current cash flow projections 
for the next 12 months taking account of possible changes 
in trading performance and existing borrowing facilities. The 
Directors have no reason to believe that any of the existing 
borrowing facilities might be withdrawn or that there would be 
any other material changes to the current financial projections of 
the Group. As a result the Directors have formed a judgement 
that there is reasonable expectation that the Group has adequate 
resources to continue in operational existence for the foreseeable 
future. For this reason the Directors consider that it is appropriate 
to continue to adopt the going concern basis in the preparation 
of these financial statements.
Relationship with the Group’s Auditors
During the year the Company’s Auditors, BDO LLP , provided 
tax and other non-audit services to the Company and its 
subsidiaries. The Board has considered the effect this has on 
the independence of the Auditors and has concluded that the 
provision of these services has not affected the independence 
of the Auditors. The Audit Committee is responsible for the 
monitoring of the scope of the Auditors’ work.
Statement of Directors’ responsibilities
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 the group financial statements in 
accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union and the Company 
financial statements in accordance with United Kingdom 
Generally Accepted Accounting Practice (United Kingdom 
Accounting Standards and applicable law). Under company law 
the Directors must not approve the financial statements unless 
they are satisfied that they give a true and fair view of the state 
of affairs of the Group and Company and of the profit or loss 
of the Group for that period. The Directors are also required to 
prepare financial statements in accordance with the rules of the 
London Stock Exchange for companies trading securities on the 
Alternative Investment Market.
In preparing these financial statements, the Directors are  
required to:
•	 Select suitable accounting policies and then apply them 
consistently.
•	 Make judgements and accounting estimates that are 
reasonable and prudent.
•	 State whether they have been prepared in accordance with 
IFRSs as adopted by the European Union, subject to any 
material departures disclosed and explained in the financial 
statements.
•	 Prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the Company will 
continue in business.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Group and 
Company’s transactions and disclose with reasonable accuracy 
at any time the financial position of the Group and Company 
and enable them to ensure that the financial statements comply 
with the requirements of the Companies Act 2006. They are 
also responsible for safeguarding the assets of the Group 
and Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
Report of the Directors
continued
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17
www.densitron.com
Stock Code: DSN
Our Governance Our Business Our Financials
Website publication
The Directors are responsible for ensuring the Annual Report 
and the financial statements are made available on a website. 
Financial statements are published on the Company’s website 
in accordance with legislation in the United Kingdom governing 
the preparation and dissemination of financial statements, which 
may vary from legislation in other jurisdictions. The maintenance 
and integrity of the Company’s website is the responsibility of 
the Directors. The Directors’ responsibility also extends to the 
ongoing integrity of the financial statements contained therein.
Parent company financial statements
Company law requires the Directors to prepare financial 
statements for each financial year which give a true and fair view 
of the state of affairs of the Group and the Company and of the 
profit or loss of the Group for that period. In preparing these 
financial statements, the Directors are required to:
•	 Select suitable accounting policies and then apply them 
consistently.
•	 Prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the Company will 
continue in business.
•	 Make judgements and estimates that are reasonable and 
prudent.
•	 State whether applicable accounting standards have been 
followed, subject to any material departures disclosed and 
explained in the financial statements.
Political and charitable donations
No political or charitable donations were made in the year  
(2011: £nil).
Auditors
BDO LLP have expressed their willingness to continue in office.  
A resolution to reappoint them will be proposed at the 
forthcoming Annual General Meeting.
Each of the Directors confirms that he is aware of no relevant 
audit information of which the Auditors are unaware and that he 
has taken all steps that he should have taken as a Director to 
make himself aware of such information and to establish that the 
Auditors are aware of it.
The Report of the Directors was approved by the Board on 
21st May 2013 and signed on its behalf by:
Tim Pearson
Group Finance Director
and Company Secretary
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18
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Independent Auditors’ Report
to the members of Densitron Technologies plc
We have audited the financial statements of Densitron 
Technologies plc for the year ended 31st December 2012 
which comprise the Group income statement, Group statement 
of financial position and Company balance sheet, the Group 
statement of comprehensive income, the Group statement of 
cash flow, the Group 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 
(IFRSs) as adopted by the European Union. The financial 
reporting framework that has been applied in 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 Auditors’ 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 statement of Directors’ 
responsibilities, 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 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.
Scope of the audit of the financial statements
A description of the scope of the audit of the financial statements 
is provided on the APB’s website at
http://www.frc.org.co.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
•	 the financial statements give a true and fair view of the state  
of the Group’s and the Parent Company’s affairs as at  
31st December 2012 and of the Group’s profit for the year  
then ended;
•	 the Group financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union;
•	 the Parent Company’s 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 matters prescribed by the 
Companies Act 2006
In our opinion the information given in the Directors’ report 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
•	 we have not received all the information and explanations we 
require for our audit.
John Everingham (Senior Statutory Auditor)
For and on behalf of BDO LLP , Statutory Auditor
Gatwick
United Kingdom
21st May 2013
BDO LLP is a limited liability partnership registered in England 
and Wales (with registered number OC305127).
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Stock Code: DSN
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Our Financials Our Business
Note
2012
£000
2011
£000
Continuing operations
Revenue 8 22,612 23,130
Cost of sales (16,139) (16,274)
Gross profit 6,473 6,856
Other operating income 6 12 78
Distribution costs (69) (72)
Administrative expenses (5,851) (5,769)
Profit from operations 4 565 1,093
Financial income 7 — 1
Financial expenses 7 (45) (33)
Profit before tax 520 1,061
Income tax expenses 9 (276) (245)
Profit for the year 244 816
Attributable to:
Equity holders of the Parent 248 818
Non-controlling interests (4) (2)
244 816
Basic and diluted earnings per share 10 0.36p 1.18p
Consolidated Income Statement
For the year ended 31st December 2012
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20
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Consolidated Statement of 
Comprehensive Income
For the year ended 31st December 2012
2012
£000
2011
£000
Profit for the year 244 816
Other comprehensive (expense)/income
Exchange (losses)/gains on translation of foreign operations (483) 50
Total other comprehensive (expense)/income (483) 50
Total comprehensive (expense)/income for the year (239) 866
Total comprehensive (expense)/income attributable to:
Owners of the Parent (234) 870
Non-controlling interests (5) (4)
(239) 866
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Our Financials Our Business
Consolidated Statement of  
Financial Position
At 31st December 2012
Note
2012
£000
2011
£000
Non current assets
Property, plant and equipment 11 839 806
Goodwill 12 143 143
Other intangible assets 13 388 174
Deferred tax assets 24 29 48
1,399 1,171
Current assets
Inventories 16 1,282 1,311
Trade and other receivables 17 5,132 4,673
Financial assets 15 — 74
Income tax recoverable 116 130
Cash and cash equivalents 1,577 1,809
8,107 7,997
Total assets 9,506 9,168
Current liabilities
Borrowings and overdrafts 19 2,132 1,694
Trade and other payables 18 3,234 2,503
Current tax payable 62 232
Provisions 23 9 134
5,437 4,563
Non current liabilities
Borrowings 19 134 25
Provisions 23 117 117
Deferred tax liabilities 24 54 44
305 186
Total liabilities 5,742 4,749
3,764 4,419
Equity
Share capital 25 697 697
Retained earnings 26 2,750 2,907
Special reserve 26 97 107
Revaluation reserve 26 450 450
Translation reserve 26 (260) 223
Equity attributable to Shareholders of Densitron 3,734 4,384
Non-controlling interests 26 30 35
Total equity 3,764 4,419
The accounts were approved by the Board and authorised for issue on 21st May 2013 and signed on its behalf by:
Jan G Holmstrom
Chairman
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22
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Note
2012
£000
2011
£000
Cash flows from operating activities
Profit/(loss) before taxation 520 1,061
Adjustments for:
Depreciation 82 60
Amortisation 27 —
Net finance expense 45 32
674 1,153
Change in financial assets — (74)
Change in inventories (17) 23
Change in trade and other receivables (897) 243
Change in trade and other payables 813 (928)
Change in provisions (122) 100
451 517
Income tax paid (388) (299)
Net cash from operating activities 63 218
Cash flows from investing activities
Interest received — 1
Deferred consideration on past disposal of discontinued operations 74 165
Payment for intangible assets (243) (87)
Acquisition of property, plant and equipment (126) (111)
Net cash (used in)/generated from investing activities (295) (32)
Cash flows from financing activities
Inception of new loans 237 83
Repayment of borrowings (24) (24)
Interest paid (45) (33)
Change in invoice discounting creditor (14) (675)
Change in letters of credit (71) (128)
Dividends paid to owners of the Company (415) (968)
Repayment of capital to owners of the Company — (2,821)
Net cash (used in)/generated from financing activities (332) (4,566)
Net (decrease)/increase in cash and cash equivalents (564) (4,380)
Cash and cash equivalents at 1st January 1,616 6,002
Effect of exchange rate fluctuations on cash held (91) (6)
Cash and cash equivalents at 31st December 30 961 1,616
Consolidated Cash Flow Statement
At 31st December 2012
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Our Financials Our Business
Statement of Changes  
in Shareholders’ Equity
For the year ended 31st December 2012
Share
capital
£000
Translation
reserve
£000
Special
reserve
£000
Revaluation
reserve
£000
Retained
earnings
£000
Total
attributable
to equity
holders of
Parent
£000
Non-
controlling
interest
£000
Total
equity
£000
Balance at
1st January 2011 3,483 171 117 450 3,082 7,303 39 7,342
Profit/(loss) for the year — — — — 818 818 (2) 816
Other total comprehensive 
income — 52 — — — 52 (2) 50
Payment of dividends — — — — (968) (968) — (968)
Capital reduction (2,786) — — — 2,806 20 — 20
Return of capital to 
Shareholders — — — — (2,786) (2,786) — (2,786)
Costs associated with the 
capital reduction — — — — (55) (55) — (55)
Transfer from special reserve — — (10) — 10 — — —
Balance at
31st December 2011 697 223 107 450 2,907 4,384 35 4,419
Balance at 1st January 2012 697 223 107 450 2,907 4,384 35 4,419
Profit/(loss) for the year — — — — 248 248 (4) 244
Other total comprehensive 
income — (483) — —
 
(483) (1) (484)
Payment of dividends — — — — (415) (415) — (415)
Transfer from special reserve — — (10) — 10 — — —
Balance at
31st December 2012 697 (260) 97 450 2,750 3,734 30 3,764
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24
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
1. General
Densitron Technologies plc is a public limited company (“the Company”) incorporated in the United Kingdom under the Companies Act 
2006 (registration number 1962726).
The Company is domiciled in the United Kingdom and its registered address is 4th Floor, 72 Cannon Street, London, EC4N 6AE. The 
Company’s Ordinary Shares are traded on the Alternative Investment Market (“AIM”). The Group’s principal activities are the design, 
development and delivery of display and display related technologies.
2. Basis of preparation
(a) Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting 
Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the 
European Union (Adopted IFRSs).
(b) Use of estimates and judgements
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions 
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results 
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the 
period in which the estimates are revised and in any future periods affected. The main areas where estimates and assumptions have the 
most significant bearing on the carrying value of assets and liabilities are explained below:
Impairment of goodwill — In line with IAS 36 the Group is required to test the carrying value of goodwill, at least annually, for 
impairment. As part of this review process the recoverable amount of goodwill is determined using value in use calculations, which 
requires estimates for future cash flows and as such is subject to estimates and assumptions. Further details are contained in note 12 to 
the consolidated financial statements.
Depreciation of property, plant and equipment — Depreciation is provided in the consolidated financial statements so as to write 
down the respective assets to their residual values over their expected useful lives and as such the selection of the estimated useful 
lives and the expected residual value of the assets requires the use of estimates and judgement. Details of the estimated useful lives are 
as shown in the policy for depreciation.
Land valuation — Land has been included at a valuation based on a report conducted by a professional firm of property consultants. 
Further details of the valuation are contained in note 11 to the consolidated financial statements.
Financial assets — Available for sale investments are carried at fair value. The carrying value of the investments is reviewed annually 
based on fair value calculations. These calculations require estimates and assumptions to be made regarding future cash flows and 
discount rates to be applied. Further details are contained in note 15 to the consolidated financial statements.
3. Significant accounting policies
The principal accounting policies adopted are set out below.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or 
business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial information presents the 
results of the Company and its subsidiaries (the ‘Group’) as if they formed a single entity. Subsidiaries are included in the consolidation 
from the date that control commences until the date that control ceases.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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Our Financials Our Business
3. Significant accounting policies continued
Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated 
balance sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition 
date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.
Business combinations that took place prior to 1st January 2006 have not been restated.
Revenue recognition
Revenue consists of sales of displays and display related products to the Group’s customers. Revenue from the sale of goods is 
recognised when the Group has transferred the significant risks and rewards of the ownership of the goods to the buyer and it is probable 
that the Group will receive the previously agreed upon payment. These criteria are generally considered to be met when the goods are 
delivered to the buyer. The value is recognised to the extent that it is probable that the economic benefits will flow to the Group and the 
revenue can be reliably measured. Revenue is measured at the fair value of consideration, net of returns and value-added taxes.
Other operating income
Other operating income includes rents receivable, royalties receivable, commissions receivable and gains made on disposal of property, 
plant and equipment.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of the 
identifiable net assets of the acquired subsidiary at the date of acquisition. Goodwill is recognised as an asset on the Group’s balance 
sheet in the year in which it arises. Goodwill is tested for impairment at least annually and more frequently if events or changes indicate 
that the carrying value may be impaired and is carried at cost less accumulated impairment losses. Any impairment is recognised 
immediately in the consolidated income statement and is not subsequently reversed. Goodwill arising on acquisitions before 1st January 
2006 (the date of transition to IFRS) has been retained at the previous UK GAAP amounts subject to being tested for impairment at that 
date and subsequently.
Capitalised development
An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if 
all of the following have been demonstrated:
•	 The technical feasibility of completing the intangible asset so that it will be available for use or sale;
•	 The intention to complete the intangible asset and use or sell it;
•	 The ability to use or sell the intangible asset;
•	 How the intangible asset will generate probable future economic benefits;
•	 The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible 
asset; and
•	 The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially incurred for internally generated intangible assets is the sum of the expenditure incurred to date when the intangible 
asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development 
expenditure is recognised in the income statement in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and 
accumulated impairment losses.
Amortisation is calculated to write down the cost of development over the expected period to which revenues are generated from the 
expenditure or five years, whichever is shorter.
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26
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
3. Significant accounting policies continued
Property, plant and equipment
Property, plant and equipment assets are carried at cost less accumulated depreciation and any recognised impairment in value. 
Freehold land is carried at a revalued amount. The land was last revalued in 2010 and it is intended that revaluations will be carried out 
by an independently qualified valuer periodically. In the years between the periodical valuations the Directors review the value of the land 
and adjustments are made if the carrying values differ significantly from its fair value.
Increases in the carrying value arising from revaluations are credited to the revaluation reserve. Decreases in the carrying values from 
revaluations are first offset against increases from earlier revaluations in respect of the same asset and are thereafter charged to the 
income statement.
Depreciation is calculated to write down the cost of the assets to their residual values, on a straight-line method on the following bases:
Freehold buildings 2%–5%
Leasehold improvements over the period of lease
Plant and machinery 15%
Fixtures and fittings 10%–20%
Computer equipment 15%–25%
The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate on an annual basis. An 
item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or 
disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the 
carrying amount of the asset) is included in the income statement as other income in the year that the asset is derecognised. All tangible 
fixed assets are reviewed for impairment in accordance with IAS 36, Impairment of Assets, when there are indications that the carrying 
value may not be recoverable.
Financial instruments
(a) Other financial assets — Deferred consideration relating to asset disposals of the Company is included within financial assets at 
amortised cost. Royalties receivable based on future turnover of the businesses disposed of are recognised in the period in which 
they are earned.
(b) Trade and other receivables — Trade and other receivables are initially recognised at fair value and thereafter at amortised cost less 
provision for impairment.
(c) Cash and cash equivalents — Cash and cash equivalents in the balance sheet comprise cash at bank and in hand. Bank overdrafts 
that are repayable on demand and form an integral part of the Group’s cash management are included as components of cash and 
cash equivalents for the purposes of the cash flow statement.
(d) Trade and other payables — Trade and other payables are initially recognised at their fair values and subsequently carried at 
amortised cost using the effective interest method.
(e) Loans and borrowings — Loans and borrowings are initially recognised at their fair values net of any transaction costs directly 
attributable to the loan. These liabilities are subsequently measured at amortised cost using the effective interest rate method 
ensuring that any interest expense is recognised at a constant rate on the balance of the liability carried in the balance sheet. 
Interest expense will include transaction costs and any premium payable on redemption.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first in, first out basis and includes carriage 
and duty costs. Net realisable value is based on estimated selling price.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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3. Significant accounting policies continued
Foreign currencies
Foreign operations
On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the 
transaction took place. All assets and liabilities of overseas operations are translated at the rate ruling at the balance sheet date. 
Exchange differences arising on translating the opening net assets at the opening rate and the results of overseas operations at actual 
rate are recognised directly in equity (the “translation reserve”).
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that 
operation up to the date of disposal are transferred to the consolidated income statement as part of the profit or loss on disposal.
At 1st January 2006 Densitron Technologies plc used an exemption available under IFRS 1, ‘First time adoption of International Financial 
Reporting Standards’, which resulted in cumulative exchange differences for all foreign operations being deemed to be zero at the date 
on transition to IFRS. Any gain or loss on the subsequent disposal would exclude translation differences that arose before the date of 
transition to IFRS and include only subsequent translation differences.
Foreign currency transactions
Transactions entered into by Group entities in a currency other than the functional currency of the country in which they operate are 
recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rate ruling 
at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised 
immediately in the consolidated income statement.
Provisions
Provisions are recognised when there is a present legal or constructive obligation as a result of past events, for which it is probable that 
an outflow of economic benefit will be required to settle the obligation, and where the amount of the obligation can be reliably measured. 
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessment of 
the time value of money and the risks specific to the liability.
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership to the 
Group. All other leases are classified as operating leases. Assets held as finance leases are recognised as assets of the Group at their 
fair value or, if lower, at the present value of the minimum lease payments during the lease term at the inception of the lease. Lease 
payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a 
constant rate of interest in the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the 
estimated useful life of the assets and the lease term.
Assets leased under operating leases are not recorded on the balance sheet. Rental payments are charged directly to the income 
statement in the period in which they are incurred. Lease incentives, primarily up-front cash payments or rent-free periods are spread 
over the period of the lease term. Payments made to acquire operating leases are treated as prepaid lease expenses and amortised 
over the life of the lease.
The land and buildings element of property leases are considered separately for the purposes of lease classification.
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28
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
3. Significant accounting policies continued
Pensions
The Group contributes to the personal pension plans of certain staff. The contributions are charged as an expense as they fall due. Any 
contributions unpaid at the balance sheet date are included as an accrual at that date. The Group has no further payment obligations 
once the contributions have been paid.
Post retirement benefit payments are made to two former employees of the Company. The provision is not considered to be material 
and the benefit will not be offered to any further employees, consequently IAS 19 disclosures have not been given.
Income taxes
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities, based on tax 
rates and laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised using the balance sheet liability method, providing for temporary differences between the tax bases 
and the accounting bases of assets and liabilities. Deferred tax is calculated on an undiscounted basis at the tax rates that are expected 
to apply in the period when the liability is settled or the asset is realised, based on tax rates and laws enacted or substantively enacted 
at the balance sheet date. Deferred income tax liabilities are recognised for all temporary differences, except where the deferred income 
tax liability from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the 
time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in 
which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset against each other when they relate 
to income taxes levied by the same tax jurisdiction and when the Group intends to settle its current tax assets and liabilities on a net 
basis and there is a legal right of set-off.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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3. Significant accounting policies continued
New standards and interpretations
The International Accounting Standards Board and the International Financial Reporting Interpretations Committee have issued the 
following standards and interpretations that could potentially affect the Company and were not applied. These are to be applied to 
financial statements with periods commencing on the following dates:
Standard and interpretations Effective date
Joint Operations (IFRS 11) — This standard sets out the principle that a party to a joint arrangement recognises its rights 
and obligations arising from that arrangement rather than focusing on the legal form. The impact of this new standard will 
not have an effect on the Group’s financial statements although will have a bearing on how the Group accounts for the 
Bonding Facility that it has opened in Taiwan as a joint operation. 1st January 2013
Disclosure of interests of other entities (IFRS 12) — This standard sets out the disclosure requirements for all forms of 
interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.  
It is not expected that this new standard will have any significant impact on the Group’s financial statements. 1st January 2013
Fair value measurement (IFRS 13) — This standard defines fair value and sets out a single IFRS framework for measuring 
fair value and requires disclosures about fair value measurements. It is not anticipated that this standard will affect the 
disclosures to the Group’s financial statements. 1st January 2013 1st January 2013
Separate financial statements (IAS 27) — This standard contains accounting and disclosures for investments in 
subsidiaries, joint ventures and associates when an entity prepares separate financial statements. The standard  
requires an entity preparing separate financial statements to account for those investments at cost or in accordance  
with the applicable financial instrument standard. It is not anticipated that this standard will have an impact on the  
Group’s financial statements. 1st January 2013
Disclosures offsetting financial assets and financial liabilities (amendments to IFRS 7) — this amendment introduces 
disclosures intended to enable users of financial statements to evaluate the potential effect of netting arrangements on 
an entity’s financial position. It is not anticipated that this will have a material impact on the disclosures to the Group’s 
financial statements. 1st January 2013
Offsetting financial assets and financial liabilities (amendments to IAS 32) — The amendments to IAS 32 seek to clarify 
rather than to change the offsetting requirements previously set out in IAS 32. The changes clarify the meaning of 
“currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent 
to net settlement. It is not anticipated that the amendments will affect the disclosures to the Group’s financial statements. 1st January 2014
Financial Instruments (IFRS 9) — IFRS 9 will eventually replace IAS 39 in its entirety, however, the process has been 
divided into three main components — classification and measurement, impairment and hedge accounting. To date 
only classification and measurement and recognition/derecognition of financial instruments has been addressed. It is not 
anticipated that this will have a significant impact on the Group’s financial statements. 1st January 2015
Application of Reporting Requirements (FRS 100) – This standard sets out the financial reporting requirements for entities 
and identifies the accounting standards that should be applied when producing their financial statements. This standard 
will affect the individual parent and subsidiary accounts but will have no impact on the Group’s financial statements. 1st January 2015
Reduced Disclosure Framework (FRS 101) – This standard permits certain qualifying entities to adopt the majority of  
the recognition and measurement requirements of EU IFRS in their individual financial statements but with fewer 
disclosures. This standard will affect the individual parent and subsidiary accounts but will have no impact on the  
Group’s financial statements. 1st January 2015
The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) – This is the new UK GAAP , 
replacing all UK accounting standards with a single FRS. This standard will affect the individual parent and subsidiary 
accounts but will have no impact on the Group’s financial statements. 1st January 2015
Presentation of Items of Other Comprehensive Income (amendments to IAS 1) - This amendment requires companies to 
group together items within Other Comprehensive Income (OCI) that may be reclassified to the profit or loss section of the 
income statement. It is not anticipated that this will have a material impact on the Group’s financial statements. 1st July 2012
None of the other new standards is expected to have a material effect on the financial statements.
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
4. Profit from operations
2012
£000
2011
£000
This has been arrived at after charging/(crediting):
Staff costs (see note 5) 3,803 3,642
Depreciation of property, plant and equipment 82 60
Amortisation 27 —
Foreign exchange (gains)/losses (126) (80)
Design and development costs 22 10
Operating lease expenses:
— Plant and machinery 20 23
— Property 222 212
Fees payable to the Company’s Auditors for the audit of the Company’s accounts 24 24
Fees payable to the Company’s Auditors and their associates for other services 10 5
The audit of the Company’s subsidiaries, pursuant to legislation 85 91
Tax advisory services 15 15
5. Employee information
The average number of employees (including Directors) during the year was as follows:
2012
£000
2011
£000
Selling and marketing 22 21
Design and development 10 8
Administration 32 34
64 63
Staff costs for the above employees during the year amounted to:
2012
£000
2011
£000
Wages and salaries 3,209 3,043
Social security costs 402 449
Pension costs 192 150
3,803 3,642
Remuneration of Directors and key employees
Salary
£000
Bonus
£000
Other
payments
£000
Defined
 contribution
pension
payments
£000
2012
£000
2011
£000
G Falconer (Chief Executive Officer) 102 — 11 46 159 137
G Hayes (President US business) 127 23 11 18 179 166
T Pearson (Group Finance Director) 100 — — 8 108 103
R Lane (Non-Executive) 18 — — — 18 18
J Farrell (Non-Executive) 18 — — — 18 18
365 23 22 72 482 442
In addition payments are made to Somerset AB in respect of services provided by Mr J Holmstrom. For the year ended 31st December 
2012 the payments were £34,125 (2011: £32,500).
G Hayes resigned as a Director on 7th March 2012 but remains a key employee of the business.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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6. Other operating income
2012
£000
2011
£000
Royalties receivable — 74
Other 12 4
12 78
7. Financial income and expense
2012
£000
2011
£000
Financial income
Bank deposit interest — 1
— 1
Financial expenses
Bank borrowings 35 18
Invoice discounting charge 10 15
45 33
8. Business and geographical segments
The chief operating decision maker in the organisation is made up of an Executive Committee comprising the Executive Directors and 
Chairman. They have determined the operating segments detailed within this report and on which the business is managed.
The Group is managed by the geographical location of its subsidiaries and resources are allocated as required on this basis:
•	 Europe — The European market, being so diverse, is serviced by subsidiaries based in four locations:
•	 UK — The UK is responsible for business conducted in the UK, management of offices in India, Italy and the Netherlands, 
management of the Group’s distribution network and sales into other locations where the Group does not have a physical 
presence. The UK business contributed 27% (2011: 26%) to Group revenues.
•	 France — The subsidiary in France is responsible for business conducted in France and with French customers whose 
manufacturing operations may be located elsewhere in the world. The French business contributed 11% (2011: 15%) to Group 
revenues.
•	 Nordic — Densitron Nordic is the Group’s subsidiary located in Finland and services business locally along with Sweden and 
customers located in the Baltic region. The Finnish business contributed 2% (2011: 2%) to Group revenues.
•	 Germany — Densitron Deutschland is the Group’s subsidiary based in Germany. It is responsible for business conducted in 
Germany, Switzerland and Austria and through the Group’s distributor based in Germany. The German business contributed 9% 
(2011: 10%) to Group revenues.
In total the European region represented the largest part of the business contributing 49% (2011: 53%) to Group revenues.
•	 US — The US segment is responsible for business conducted in the US, Canada and Central and South America. It represents 35% 
(2011: 34%) of the Group total revenues.
•	 Asia — The Asian segment is made up of subsidiaries located in Japan and Taiwan.
•	 Japan — Densitron Japan is responsible for sales into Japan. It contributed 13% (2011: 11%) to Group revenues.
•	 Taiwan — Densitron Asia is the Group’s subsidiary located in Taiwan. It is primarily a facilitating function for the rest of the Group 
managing suppliers located in Taiwan and China. It contributed 3% (2011: 2%) to Group revenues.
Inter-segment transfer pricing is based on the level of work carried out and the risk encountered by each party in order to make a third 
party sale.
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
8. Business and geographical segments continued
Inter-segment transfer pricing is based on the level of work carried out and the risk encountered by each party in order to make a third 
party sale.
UK
£000
France
£000
Finland
£000
Germany
£000
US
£000
Japan
£000
Taiwan
£000
Total
£000
2012
Revenue   
Total 7,696 2,513 591 2,140 8,033 2,911 6,162 30,046
Intercompany (1,565) (78) (74) (44) (63) — (5,610) (7,434)
Revenue from external customers 6,131 2,435 517 2,096 7,970 2,911 552 22,612
Profit/(loss) before tax (13) 76 (20) 69 656 331 (97) 1,002
Balance Sheet   
Assets 2,351 791 187 749 2,307 1,333 1,074 8,792
Liabilities (1,937) (236) (47) (109) (1,066) (210) (1,314) (4,919)
Net assets 414 555 140 640 1,241 1,123 (240) 3,873
Other   
Interest payable 26 5 — — 7 2 — 40
Capital expenditure
— Property, plant and equipment — 10 — 1 26 29 60 126
— Depreciation 1 4 1 1 63 7 — 77
—  Capitalised development  
expenditure 29 — — 19 185 — 10 243
— Amortisation 27 — — — — — — 27
UK
£000
France
£000
Finland
£000
Germany
£000
US
£000
Japan
£000
Taiwan
£000
Total
£000
2011
Revenue   
Total 7,794 3,516 472 2,328 7,997 2,434 7,045 31,586
Intercompany (1,703) (50) (21) — (158) — (6,524) (8,456)
Revenue from external customers 6,091 3,466 451 2,328 7,839 2,434 521 23,130
Profit/(loss) before tax 338 81 (14) 55 779 306 71 1,616
Balance Sheet   
Assets 1,899 1,137 209 734 2,255 1,438 565 8,237  
Liabilities (1,777) (268) (44) (101) (910) (263) (766) (4,129)
Net assets 122 869 165 633 1,345 1,175 (201) 4,108
Other   
Interest payable 39 8 — — 3 1 — 51
Capital expenditure   
— Property, plant and equipment — 7 — — 89 15 — 111
— Depreciation 1 3 1 1 51 — — 57
—  Capitalised development  
expenditure 87 — — — — — — 87
— Amortisation — — — — — — — —
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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8. Business and geographical segments continued
Reconciliation of reportable segments, profit and loss, assets and liabilities to the Group’s corresponding amounts:
2012
£000
2011
£000
Revenue   
Total revenue for reported segments 30,046 31,586
Elimination of inter-segmental revenues (7,434) (8,456)
Group’s revenue per consolidated statement of comprehensive income 22,612 23,130
2012
£000
2011
£000
Profit after income tax expense   
Total profit for reporting segments 1,002 1,616
Costs associated with Head Office (482) (555)
Income tax expenses (276) (245)
Profit after income tax expense 244 816
2012
£000
2011
£000
Assets   
Total assets for reportable segments 8,792 8,237
Assets attributable to Head Office 215 432
Land at Blackheath 499 499
Group assets 9,506 9,168
Liabilities   
Total liabilities for reportable segments 4,919 4,129
Liabilities attributable to Head Office 823 620
Group liabilities 5,742 4,749
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
8. Business and geographical segments continued
The analysis of the Group’s segmental information by geographical location is:
External revenue by
location of customers
Non-current assets by
location of asset
Capital expenditure by
location of assets
2012
£000
2011
£000
2012
£000
2011
£000
2012
£000
2011
£000
Total operations
UK 2,549 2,349 615 617 30 14
France 2,114 3,466 24 18 10 7
Finland 517 451 9 10 — —
Germany 1,848 2,328 119 100 20 —
Portugal 785 703 — — — —
Italy 428 557 — — — —
Other European 824 740 — — — —
USA 6,443 6,392 476 381 211 162
Canada 990 785 — — — —
Other Americas 15 22 — — — —
Japan 2,206 1,909 36 17 29 15
Taiwan 557 531 99 28 69 —
Malaysia 335 523 — — — —
China 1,736 1,405 — — — —
Other Asia 1,099 512 — — — —
Tunisia — 326 — — — —
Other Rest of the World 166 131 — — — —
22,612 23,130 1,378 1,171 369 198
9. Tax expense
2012
£000
2011
£000
Current tax expense
UK corporation tax and income tax of overseas operations on profits for the year 294 408
Adjustments for under/(over) provision in prior periods 11 (59)
305 349
Deferred tax expense
Origination and reversal of temporary differences (29) (104)
Total tax charge 276 245
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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9. Tax expense continued
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to 
profits for the year are as follows:
2012
£000
2011
£000
Profit before tax 520 1,061
Expected tax charge based on the standard rate of corporation tax in the UK of 24% (2011: 26%) 125 276
Losses carried forward 99 4
Disallowed expenses 28 37
Utilisation of tax losses brought forward (66) (85)
Adjustments for overseas rate 79 72
Adjustments to prior years tax charge 11 (59)
276 245
10. Earnings per share
The earnings and weighted average number of ordinary shares used in the calculation of earnings per share are as follows:
2012
£000
2011
£000
Profit attributable to ordinary Shareholders 248 818
2012
Number
2011
Number
Weighted average number of ordinary shares
Issued ordinary shares at 1st January 69,669,106 69,669,106
Effect of purchase of Treasury shares on 23rd October 2008 (500,000) (500,000)
Weighted average number of ordinary shares at 31st December 69,169,106 69,169,106
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
11. Property, plant and equipment
Freehold land
and buildings
£000
Leasehold
improvements
£000
Plant and
machinery
£000
Fixtures and
fittings
£000
Computer
equipment
£000
Total
£000
Cost
Balance at 1st January 2011 528 44 181 163 193 1,109
Additions — 1 78 22 10 111
Disposals — — (3) (72) (4) (79)
Effect of movement in foreign exchange rate — — — (2) — (2)
Balance at 31st December 2011 528 45 256 111 199 1,139
Balance at 1st January 2012 528 45 256 111 199 1,139
Additions — — 63 29 34 126
Disposals — — (53) (18) (41) (112)
Effect of movement in foreign exchange rate — (2) (11) (5) (7) (25)
Balance at 31st December 2012 528 43 255 117 185 1,128
Accumulated depreciation
Balance at 1st January 2011 14 2 79 141 116 352
Depreciation charge for the year 1 7 21 6 25 60
Disposals — — (3) (72) (4) (79)
Effect of movement in foreign exchange rate — — 1 (1) — —
Balance at 31st December 2011 15 9 98 74 137 333
Balance at 1st January 2012 15 9 98 74 137 333
Depreciation charge for the year 2 7 27 14 32 82
Disposals — — (53) (18) (41) (112)
Effect of movement in foreign exchange rate — (1) (5) (2) (6) (14)
Balance at 31st December 2012 17 15 67 68 122 289
Net book value
At 1st January 2011 514 42 102 22 77 757
At 31st December 2011 513 36 158 37 62 806
At 31st December 2012 511 28 188 49 63 839
Freehold land relates to 1.25 acres of land owned by the Group at Blackheath in South East London. The fair value of the land would 
be considerably greater if planning permission was to be granted but even without permission the Directors are of the opinion the fair 
value would be at least £500,000. During 2010 the Directors engaged a firm of property consultants, Drivers Jonas Deloitte, to carry 
out a formal valuation of the land at 31st December 2010. This was carried out in accordance with RICS Valuation Standards (“The Red 
Book”) published by the Royal Institution of Chartered Surveyors.
The valuation that they put on the land was £500,000 and consequently, the Directors have increased the valuation of the land 
accordingly and credited the uplift of £450,000 to the revaluation reserve in the year ended 31st December 2010. The Directors 
consider that the fair value of the land does not differ materially from its carrying amount and as such do not consider that a revaluation 
is required in the current year. 
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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12. Goodwill
2012
£000
2011
£000
Balance at 1st January 2012 and 31st December 2012 143 143
Impairment reviews are carried out in March each year or more frequently if circumstances suggest there has been an impairment, for the 
purposes of the preparation of the accounts based on information at the previous December. The impairment reviews carried out in March 
2013 and March 2012 indicated that no impairment provision was necessary at 31st December 2011 or 31st December 2012.
Details of goodwill allocated to cash generating units for which the amount of goodwill so allocated is significant in comparison to total 
goodwill is as follows:
2012
£000
2011
£000
France 11 11
Germany 99 99
Finland 5 5
Asia 28 28
143 143
The recoverable amounts of all of the above cash generating units have been determined from value in use calculations based on cash 
flow projections from formally approved budgets covering the year to 31st December 2013.
•	 Cash flows were based on the internal budgets for 2013 with reference to the three year forecast to 2015 (2011 cash flows 
were based on the budgets for 2012 with reference to the three year forecast to 2014). Cash flows for a further two years were 
extrapolated using a constant growth rate. The rate of growth of each of the cash generating units is shown in the following table. No 
growth was forecast beyond this period.
•	 Each of the trading companies operates in its own geographical location and the nature of the business conducted can vary from 
location to location. Where business is of a standard nature assumptions have been made regarding the growth potential of these 
products. Where business is of a project nature there is far greater visibility of future business to be conducted in the future. Both of 
these types of business have been taken into account in putting the budgets together.
•	 The estimated weighted average cost of capital of the group is 13.42% (2011: 13.20%). In order to reflect the risks of each of the 
cash generating units the cash flows have been run using discount rates of between 15% and 20% (2011: 12.50% and 20%). The 
discount rate used for each of the cash generating units is shown in the following table.
•	 A sensitivity analysis was carried out on the cash flows for each of the cost generating units. The growth rates were reduced to zero 
and the discount rate in each unit was increased to 25%. In all cases the value in use exceeded the carrying value.
•	 The method used for calculating the value in use in 2012 was the same that had been used in 2011. Growth rates have been 
adjusted from those used in 2011 to reflect the respective cash generating units’ expected performances based on historical results 
and future opportunities. The discount rates used are unchanged and reflect risks associated with each of the cash generating units. 
Similar sensitivity analysis was carried out for each of the cash generating units as performed in 2011 and in each case the value in 
use exceeded the carrying value.
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
12. Goodwill continued
Following the sensitivity analysis that was carried out there were no areas that were identified as being particularly sensitive for either 
2012 or 2011.
            Growth rate      Discount rate applied
2012
%
2011
%
2012
%
2011
%
France 5.00 5.00 17.50 17.50
Germany 5.00 2.50 17.50 20.00
Finland 2.50 2.50 20.00 20.00
Asia 1.00 1.00 15.00 12.50
13. Other intangible assets
Capitalised 
development 
£000
Cost
Balance at 1st January 2012 174
Additions 243
Effect of movement in foreign exchange rate (2)
Balance at 31st December 2012 415
Accumulated amortisation
Balance at 1st January 2012 —
Amortisation expense 27
Balance at 31st December 2012 27
Net book value
At 31st December 2012 388
At 31st December 2011 174
Capitalised development expenditure represents the cost of the development of new products. The main addition to design and 
development during the year was the capitalisation of expenditure incurred in developing Ripdraw™. This incorporates both a hardware 
and a software solution for customers: a hardware solution that ensures the TFT display selected by a customer to incorporate into their 
product will be available for the life of a product, and a software solution that offers customers a cloud-based graphic user interface 
design web-based portal that enables them to produce their own designs for imagery to be projected on the display incorporated 
into their product. The useful life of capitalised development expenditure is over the expected life of the business generated from the 
expenditure or five years, whichever is shorter.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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14. Principal subsidiary undertakings
The principal subsidiary undertakings which operated during the year are listed below. They all operate in the country of their 
incorporation, which is Great Britain unless otherwise stated. They are all wholly owned unless there is a figure in brackets, which 
indicates the percentage of Ordinary Shares and voting rights held by the Group.
Company name Nature of business
Densitron Europe Ltd Sale of electronic products in the UK and Europe
Parent company of European subsidiary undertakings
Densitron Corporation of Japan (incorporated in Japan) Sale of electronic products in Japan
Export of electronic products from Japan
Densitron Corporation (incorporated in USA) Sale of electronic products in North and South America
Densitron France (incorporated in France)* Sale of electronic products in France
Densitron Nordic Oy (80%) (incorporated in Finland)* Sale of electronic products in Finland, Sweden and Eastern Europe
Densitron Deutschland GmbH (incorporated in Germany)* Sale of electronic products in Germany and Austria
Densitron Asia Ltd (incorporated in Taiwan) Parent company of Taiwanese Investments and procurement of  
electronic products in Taiwan and China
Densitron Land Ltd Holder of land owned by the Group in Blackheath
Densitron Display Taiwan Ltd Procurement of electronic products in Taiwan and China
* Subsidiary of Densitron Europe Limited
15. Financial assets
Deferred
consideration 
£000
Total financial
assets
£000
Current
Balance at 1st January 2012 74 74
Cash receipts during the year (74) (74)
Balance at 31st December 2012 — —
Deferred consideration on discontinued operations represents the amount of consideration due to be paid as a result of disposals 
of businesses in previous years. The amounts represent the amounts that are due to be paid in future periods. The Directors have 
considered whether any impairment is required on these amounts based on available information and previous payment history and 
consider that no impairment to the amounts receivable is required.
16. Inventories
2012
£000
2011
£000
Finished goods 1,282 1,311
1,282 1,311
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
17. Trade and other receivables
2012
£000
2011
£000
Trade receivables 4,241 3,404
Prepayments and accrued income 252 357
Other receivables 639 912
5,132 4,673
The Group considers that the fair values of its trade and other receivables is not materially different from their carrying values.
The Group’s exposure to credit and currency risks relating to trade and other receivables is disclosed in note 22.
18. Trade and other payables — current
2012
£000
2011
£000
Trade payables 2,322 1,591
Other tax and social security 103 248
Other payables 337 170
Accruals 472 494
3,234 2,503
The Group considers that the fair value of its trade and other payables is not materially different from their carrying values.
The Group’s exposure to currency and liquidity risks related to trade and other payables is disclosed in note 22.
19. Loans and borrowing
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at 
amortised cost. For more information about the Group’s exposure to interest rate and foreign currency risk see note 22.
2012
£000
2011
£000
Non-current liabilities
Secured bank loans 134 25
134 25
Current liabilities
Secured bank overdrafts 616 193
Current portion of secured bank loans 173 73
Letters of credit 1,113 1,184
Advances received from invoice discounters 230 244
2,132 1,694
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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20. Financial assets and liabilities
Maturity of financial assets
2012
£000
2011
£000
In less than one year — 74
In more than one year but not more than two years — —
— 74
Maturity of financial liabilities
The carrying amounts of financial liabilities, all of which are exposed to cash flow or fair value interest rate risk are repayable as follows:
2012
£000
2011
£000
In less than one year 2,132 1,694
In more than one year but not more than two years 49 25
In more than two years but not more than three years 44 —
In more than three years but not more than four years 41 —
In more than four years but not more than five years — —
2,266 1,719
21. Financial instruments — risk management
The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s financial performance.
The Group’s financial instruments comprise cash and liquid resources and various items such as trade payables and receivables that 
arise directly from its operations. The Group is exposed through its operations to the following risks:
•	 Credit risk
•	 Foreign currency risk
•	 Liquidity risk
•	 Interest rate risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes 
the Group’s objectives, policies and processes for managing those risks. Further quantitative information in respect of these risks is 
presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks and consequently the objectives, policies 
and processes are unchanged from the previous period.
The Board has overall responsibility for the determination of the Group’s risk management policies. The objective of the Board is to set 
policies that seek to reduce the risk as far as possible without unduly affecting the Group’s competitiveness and effectiveness.
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Annual Report and Accounts for the year ended 31st December 2012
21. Financial instruments — risk management continued
Further details of these policies are set out below:
Credit risk
The Group is exposed to credit risk primarily on its trade receivables, which are spread over a range of customers and countries, a 
factor that helps to dilute the concentration of the risk.
It is Group policy, implemented locally, to assess the credit risk of each new customer before entering into binding contracts. Each 
customer account is then reviewed on an ongoing basis (at least once a year) based on available information and payment history. In the 
UK and France a policy of using credit insurance has also been implemented to further mitigate any risk.
The maximum exposure to credit risk is represented by the carrying value in the balance sheet as shown in note 17. The amount of the 
total exposure shown in note 17 is stated net of provisions for doubtful debts.
The credit risk on liquid funds is limited as the funds are held at banks with high credit ratings assigned by international credit rating 
agencies.
Foreign currency risk
Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated in a currency other 
than their functional currency. The general policy for the Group is to sell to customers in the same currency that goods are purchased in 
reducing the transactional risk. Along with the use of foreign currency bank accounts it is considered that the risk is mitigated although it 
is recognised that the risk is not wholly eliminated due to the different payment periods of suppliers and customers. Where transactions 
are not matched excess currency amounts generated from trading are used and the use of forward currency contracts are considered 
(during the year no forward currency contracts were used).
Foreign exchange translation risk arises on translation of the balance sheets of Group operations whose functional currency is different 
to that of the Group as a whole. The predominant area where this risk applies is US dollars. This risk is mitigated by hedging the balance 
of the balance sheet of those operations by borrowing in that currency in the UK.
Liquidity risk
It is the general policy of the Group that liquidity risk is managed locally. In some instances local facilities are tied in with Head Office and 
managed alongside those of Head Office. The Group maintains banking facilities in the primary locations in which it operates in order to 
manage any cash requirement. In the UK invoice discounting is used on sales to customers meaning that the UK business can receive 
immediate payment on its sales. Additionally the use of letters of credit to make purchases from the Far East enables the UK to manage 
its purchases more effectively.
The Group has approximately a three month visibility in its trading and runs a rolling three month cash flow forecast. If any part of the 
Group identifies a shortfall in its future cash position the Group has sufficient facilities that it can direct funds to the location where they 
are required. If this situation is forecast to continue into the future remedial action is taken.
Interest rate risk
The Group is exposed to interest rate risk as it generally borrows funds at floating interest rates. This exposes the Group to fluctuations 
in interest rates. All borrowings require Board approval and while this doesn’t mitigate the risk it ensures that the Board controls the level 
of borrowing undertaken by the Group and the rate at which funds are borrowed at. The Board maintains a close relationship with its 
lenders to ensure that the financial instruments entered into and the margin charged by them are the most appropriate for the business 
and at the most competitive rates achievable.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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22. Financial instruments
Credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting 
date was:
Cash and receivables
2012
£000
2011
£000
Trade and other receivables 5,132 4,673
Other financial assets — current — 74
Cash and cash equivalents 1,577 1,809
6,709 6,556
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Carrying value
2012
£000
2011
£000
UK 1,972 1,424
France 166 136
Finland 83 37
Germany 449 547
US 1,078 850
Japan 410 339
Taiwan 83 71
4,241 3,404
The following table shows an analysis of trade and other receivables:
2012
£000
2012
%
2011
£000
2011
%
Current 2,924 56.98 2,406 51.49
0–30 days 1,139 22.19 1,161 24.84
31–60 days 547 10.66 595 12.73
61–90 days 123 2.40 78 1.67
91–120 days 140 2.73 138 2.95
Over 120 days 259 5.04 295 6.32
5,132 100.00 4,673 100.00
In line with the Group’s past trading and bad debt exposure experience a policy has been adopted to make a provision of 50% against 
those debts that are more than 90 days overdue. Any debts still outstanding after 120 days are fully provided against. Where there has 
been an agreement with a customer for credit terms to be extended and those terms are being adhered to no provision is made. During 
the year the value of provisions made in respect of bad and doubtful debts was £101,000 (2011: £30,000) which represented less than 
0.45% of turnover (2011: 0.13%).
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44
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
22. Financial instruments continued
Liquidity risk
Financial liabilities
2012
£000
2011
£000
Current financial liabilities
Trade and other payables 3,234 2,503
Loans and borrowings 2,132 1,694
5,366 4,197
Non-current financial liabilities
Loans and borrowings 134 25
The Board considers that the book value of its financial assets and liabilities approximate to their realisable values.
The following are maturities of financial liabilities, including estimated contracted interest payments:
Carrying
amount
£000
Contractual
cash flows
£000
6 months
 or less
£000
6–12
months
£000
1–2
years
£000
2–5
years
£000
2012
Secured bank loans 307 321 148 32 54 87
Bank overdrafts 616 616 616 — — —
Letters of credit 1,113 1,115 1,115 — — —
Advances received from invoice discounters 230 230 230 — — —
Trade and other payables 3,234 3,234 3,234 — — —
5,500 5,516 5,343 32 54 87
Carrying
amount
£000
Contractual
cash flows
£000
6 months
 or less
£000
6–12
months
£000
1–2
years
£000
2–5
years
£000
2011
Secured bank loans 98 101 38 37 26 —
Bank overdrafts 193 193 193 — — —
Letters of credit 1,184 1,187 1,187 — — —
Advances received from invoice discounters 244 244 244 — — —
Trade and other payables 2,503 2,503 2,503 — — —
4,222 4,228 4,165 37 26 —
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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22. Financial instruments continued
Interest rate risk
The Group finances its business through a mixture of bank overdrafts, bank and other loans, letters of credit and invoice discounting 
facilities. During the year the Group utilised these facilities at floating rates of interest. The table below shows the Group’s financial 
instruments that are exposed to interest rate risk at 31st December 2012.
Currency
2012
Effective
interest
rate 
2012
Carrying
amount
£000
2011
Effective
interest
rate
2011
Carrying
amount
£000
Floating rate with maturity within one year
Bank overdraft facility — UK UKS 4.70% 616 4.70% 193
Line of credit — US USD 2.75% 112 — —
Invoice discounting facility — UK UKS 3.25% 180 3.25% 60
Invoice discounting facility — UK USD 3.25% 50 3.25% 184
Letter of credit facility — UK USD 0.61% 1,113 0.86% 1,184
2,071 1,621
Floating rate with maturity between one and two years
Secured bank loan — USA USD 4.00% 24 4.00% 98
Floating rate with maturity between two and five years
Secured bank loan — USA USD 3.75% 171 — —
The Group is not particularly sensitive to increases in interest rates as it has the ability to utilise available funds to restrict the level of 
borrowings but if interest rates were to increase by 100 basis points the effect on the average borrowings of the Group would be an 
increase in annual interest payments of approximately £23,000 (2011: £17,000).
In the UK Barclays Bank PLC holds a debenture over the assets of the UK companies in order to secure overdraft, letters of credit, 
guarantee and invoice discounting facilities.
In the USA the bank loan is secured against the assets of the US subsidiary.
Foreign currency risk
The Group’s main foreign currency risk is the short term risk associated with accounts receivable and payable denominated in 
currencies that are not the subsidiaries’ functional currency. The risk arises on the difference in the exchange rate between the time 
invoices are raised/received and the time invoices are settled/paid. For sales denominated in foreign currencies the Group will try and 
ensure that the purchases associated with the sale will be in the same currency. The following table shows the net liabilities exposed to 
exchange rate risk that the Group has at 31st December 2012.
2012
£000
2011
£000
UK Sterling — —
US Dollars 1,853 1,630
Japanese Yen 41 9
Taiwanese Dollars — —
Euro 171 25
2,065 1,664
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46
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
22. Financial instruments continued
The effect of a strengthening/weakening of 10% of currencies against sterling at the balance sheet date on the foreign currency 
balances carried at that date would have resulted in an estimated net decrease/increase in pre-tax profit for the year and decrease/
increase in net assets of approximately £92,000 and £314,000 respectively (2011: £144,000 and £362,000 respectively).
Capital under management
The Group considers its capital to comprise its ordinary share capital, share premium account, translation reserve and accumulated 
retained earnings.
In managing its capital, the Group’s primary objective is to maximise returns for its equity Shareholders. The Group seeks to maintain a 
gearing ratio that balances risks and returns at an acceptable level and also to maintain sufficient funding to enable the Group to meet 
its working capital and strategic investment need. In making decisions to adjust its capital structure to achieve these aims the Group 
considers not only its short term position but also its long term operational and strategic objectives.
The Group’s gearing ratio at 31st December 2012 is shown below:
2012
£000
2011
£000
Bank overdrafts 616 193
Bank loans 307 98
Letters of credit 1,113 1,184
Invoice discounting advance 230 244
Cash at bank (351) (76)
1,915 1,643
Share capital 697 697
Retained earnings 2,750 2,907
Special reserve 97 107
Revaluation reserve 450 450
Translation reserve (260) 223
3,734 4,384
Gearing ratio 51.29% 37.48%
In calculating the level of the Group’s gearing cash at bank has been taken into account to the extent that it can be readily utilised to 
repay borrowings.
The increase in gearing during the year has been due to:
•	 An increase in borrowings to enable the business to invest in new products and services during the year.
•	 A reduction in retained earnings due to the payment of dividends to Shareholders.
•	 A movement on the translation reserve resulting from a movement in the exchange rates from the beginning to the end of the year.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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23. Provisions
Post
retirement
benefits
£000
Legal
expenses
£000
Other
£000
Total
£000
At 1st January 2012 107 125 19 251
Profit and loss account movement (10) (125) 10 (125)
At 31st December 2012 97 — 29 126
The provisions that the Company has are:
•	 Post retirement benefits relates to payments being made to former employees of the Company. The provision is not considered to be 
material and the benefit will not be offered to any further employees, consequently IAS 19 disclosures have not been given.
•	 Legal expenses relates to a provision being made by the Group in respect of present obligations to make future payments in respect 
of legal costs to defend the Group against a claim (see note 29).
•	 Other relates to certain provision that the Group has made in respect of obligations to make future payments.
2012
£000
2011
£000
Current liabilities 9 134
Non-current liabilities 117 117
126 251
24. Deferred taxation
2012 2011
Asset
£000
Liability
£000
Asset
£000
Liability
£000
At 1st January 2012 48 (44) 41 (141)
Exchange adjustment (1) 1 — —
Income statement (18) (11) 7 97
At 31st December 2012 29 (54) 48 (44)
Details of the deferred tax asset and amounts charged to the consolidated income statement are as follows:
Balance
2012
 £000
(Charged)/
credited 
to income 
statement
2012
£000
Balance
2011
£000
(Charged)/
credited 
to income 
statement
2011
£000
Asset
Employee compensation and other accruals 58 11 47 26
Capital allowances in excess of depreciation (59) (22) (37) (22)
Inventory allowance 18 12 6 (11)
Receivables allowance 12 (19) 32 14
29 (18) 48 7
Liabilities
Exchange gains — — — 129
Other differences (54) (11) (44) (32)
(54) (11) (44) 97
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
24. Deferred taxation continued
The Group has not provided deferred tax on losses or capital allowances where the timescale for recovery is uncertain.
2012
£000
2011
£000
Unused tax losses 835 840
Capital allowances 160 170
995 1,010
25. Called up share capital
2012
£000
2011
£000
Authorised: Ordinary shares of 1p each
At 1st January 2012 and 31st December 2012 140,000,000 140,000,000
Issued: Ordinary shares of 1p each
At 1st January 2012 and at 31st December 2012 69,669,106 69,669,106
On 26th May 2011, following High Court approval, the Company repaid 4p per share to Shareholders reducing the nominal value of the 
shares to 1p per share. The reduction in the value of the share capital is disclosed in the statement of changes in Shareholders’ equity.
On 23rd October 2008 the Company purchased 500,000 Ordinary shares of 5p each for 5p per share. These shares are being held in 
Treasury by the Company.
26. Reserves
The following describes the nature and purpose of each reserve within owners’ equity.
Share capital
Amount subscribed for share capital at nominal value.
Translation reserve
The translation reserve comprises all currency differences arising from the translation of the financial statements of foreign operations.
Special reserve
Following the cancellation of its share premium account the Company is required to set aside that amount of the share premium 
account totalling the value of creditors in existence at that time until those creditors are repaid.
Revaluation reserve
The revaluation reserve comprises the surplus on revaluation of land that is owned by the Group. When revalued land is sold the 
revaluation reserve that relates to it is transferred directly to retained earnings.
Retained earnings
Cumulative net gains and losses recognised in the consolidated income statement.
Non-controlling interests
The non-controlling interests relate to a minority shareholding in the Group’s subsidiary in Finland.
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
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27. Leases
Operating leases
The Group leases various offices, warehouses and equipment under non-cancellable operating lease agreements. The leases have 
varying terms and renewal rights.
2012
£000
2011
£000
Future minimum rentals payable under non-cancellable operating leases expiring:
Within one year 72 —
Between one and five years 179 369
251 369
28. Related party transactions
There were no transactions with related parties during the year or preceding year.
29. Contingent liabilities
It was reported in the 2011 report and accounts that the Group is a defendant in a legal claim involving a claim for outstanding rent 
arrears and the rectification of a 2003 lease of a property in Newcastle. The case is complicated and the Group continues to dispute the 
claim.  
The specific areas of doubt and/or dispute are:
•	 The validity of the 2003 lease itself.
•	 The manner in which terms within the lease were altered after the form of the lease had been agreed but before the lease was  
actually signed.
•	 Although the current Landlord believed there were errors in the signed lease in 2005, before it even bought the lease, it failed to lodge 
its current claim to change the tenant named in the lease from Ferrograph Limited to Densitron Technologies plc until 2012, six years 
after it had bought the lease when, on its own case, it had apparently alerted itself to the need for rectification, and almost two years 
after it had issued a notice to Ferrograph Limited, the party currently named in the lease as the tenant, to bring Ferrograph Limited’s 
tenancy to an end (after which and, the Board believes, because of which Ferrograph Limited vacated the premises).
•	 The manner in which from 2007 until mid-2010 the Landlord ostensibly accepted payment of rent from Ferrograph Limited and 
otherwise apparently treated it as its tenant following its sale by Densitron Technologies plc. 
•	 The liability for the fact that after issuing a notice to Ferrograph Limited to bring its tenancy to an end the Landlord delayed in bringing 
its claim to the attention of Densitron for a period approaching two years and then issued proceedings without complying with its 
obligation to give adequate notice of its intention to do so.
The Board considers that due to the level of uncertainty it remains inappropriate at present to make a provision against a potential 
loss. Nevertheless Shareholders should note that the Board is attempting to achieve a settlement with the Landlord in order to bring 
this matter to a close, to avoid further substantial costs accruing on both sides and to make it possible to try to let the property which 
at present stands empty as a result of the Landlord issuing the notice to Ferrograph Limited in 2010. At present the Landlord’s claim 
continues to escalate in line with the unpaid rent and this will continue to be the case until the matter is resolved in some way. If a 
settlement is achieved there will be a cost to the Group but at present there have been no substantive negotiations with the Landlord so 
it is not possible to estimate the cost of a settlement. At present the only information that can be provided is that the matter is expected 
to come to trial in December 2013 and the Board is trying to bring about a settlement. 
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Notes to the Consolidated
Financial Statements
For the year ended 31st December 2012
29. Contingent liabilities continued
In March 2012 it was announced to Shareholders that a claim had been received against the Group for approximately £300,000 
in unpaid back rent and that if the action was successful there would also be a liability for unpaid past business rates of £70,000. 
The announcement further explained that the Landlord of the property was seeking rectification of an existing lease on the premises 
that runs until 2023 with an annual rent of £167,000 and annual business rates of approximately £60,000 and that, if the claim was 
successful, the Group would be liable for the unpaid back rent and rates and the ongoing liabilities until the conclusion of the lease  
in 2023.
As summarised above there is still a significant amount of uncertainty surrounding this dispute and at the date of approving the financial 
statements the Board does not view this potential payment as a probable obligation on which a reliable estimate can be made, albeit it 
is a possible obligation. For these reasons no provision has been recognised in the financial statements and the Directors will continue 
to assess the likelihood of any payment becoming probable and reliable to estimate. 
30. Notes supporting the cash flow statement
Cash and cash equivalents for the purposes of the cash flow statement comprises:
2012
£000
2011
£000
Cash at bank and in hand 1,577 1,809
Bank overdrafts (616) (193)
961 1,616
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Notes
2012
£000
2011
£000
Fixed assets
Tangible assets 33 17 19
Investments 34 8,655 8,814
8,672 8,833
Current assets
Debtors — due within one year 35 1,834 421
Cash at bank and in hand 96 163
1,930 584
Creditors: amounts falling due within one year 36 (3,704) (3,583)
Net current assets (1,774) (2,999)
Total assets less current liabilities 6,898 5,834
Provisions for liabilities 37 (88) (223)
Net assets 6,810 5,611
Capital and reserves
Called up share capital 38 697 697
Revaluation reserve 39 1,537 117
Special reserve 39 97 107
Profit and loss account 39 4,479 4,690
Total equity Shareholders’ funds 6,810 5,611
The accounts were approved by the Board and authorised for issue on 21st May 2013 and signed on its behalf by:
Jan G Holmstrom
Chairman
Company Balance Sheet
For the year ended 31st December 2012
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
31. Principal accounting policies
Basis of accounting
The financial statements of the Parent Company, Densitron Technologies plc have been prepared in accordance with the Companies 
Act 2006 and applicable generally accepted accounting standards in the United Kingdom.
Transactions with wholly owned subsidiaries
The Company has taken advantage of the exemption under FRS 8 and has not disclosed transactions with subsidiaries wholly owned 
by the Group.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities 
denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date.
Tangible fixed assets
(a) Tangible fixed assets are stated at cost net of depreciation and any provision for impairment.
(b) Depreciation is calculated to write off the cost of all tangible fixed assets by equal instalments over their expected useful lives. 
Where there is evidence of impairment, fixed assets are written down to their recoverable amount. Any such write down is charged 
to the profit and loss account. No depreciation is provided on freehold land. The other assets are depreciated at the following rates 
per annum:
Freehold buildings 5% 
Fixtures and fittings 20%
Computer equipment 20%
(c)  Rental payments under operating leases are expensed on a straight line basis over the period of the lease.
Investments
Investments in subsidiaries are held at a Directors’ valuation.
Current taxation
Current taxation, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax 
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred taxation
Deferred tax is provided, except as noted below, on timing differences that have arisen but not reversed by the balance sheet date, 
where the timing differences result in the obligation to pay more tax, or a right to pay less tax, in the future. Timing differences arise 
because of differences between the treatment of certain items for accounting or tax purposes.
In accordance with FRS 19 deferred tax is not provided on timing differences arising from:
(d) revaluation gains on land and buildings, unless there is a binding agreement to sell them at the balance sheet date; and
(e) gains on the sale of non-monetary assets, where on the basis of all available evidence it is more likely than not that the taxable gain 
will be rolled over into replacement assets.
Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.
Notes to the Company Accounts
For the year ended 31st December 2012
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31. Principal accounting policies continued
Deferred tax is measured at the tax rates that are expected to apply in the periods when the timing differences are expected to reverse, based 
on tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.
Where gains and losses are to be recognised in the statement of total recognised gains and losses, the related taxation is also taken 
directly to the statement of total recognised gains and losses.
Pensions
The Company does not operate its own pension scheme. Payments are made to defined contribution retirement benefit schemes and 
are charged as an expense as they fall due.
32. Profit of the Parent Company
As permitted under Section 408 of the Companies Act 2006, the Income Statement of the Company is not presented as part of these 
financial statements.
The loss dealt with in the Company accounts was £221,000 (2011: loss £470,000).
33. Tangible fixed assets
Freehold 
land and 
buildings 
£000
Fixtures and
fittings
£000
Computer
equipment
£000
Total
£000
At cost
At 1st January 2012 30 10 — 40
Additions — — 2 2
At 31st December 2012 30 10 2 42
Depreciation
At 1st January 2012 16 5 — 21
Charge for the year 2 2 — 4
At 31st December 2012 18 7 — 25
Net book value
At 31st December 2012 12 3 2 17
At 31st December 2011 14 5 — 19
34. Fixed asset investments
Subsidiary
 undertakings
£000
Shares at cost or valuation of subsidiary
At 1st January 2012 11,637 
Revaluations 2,128 
At 31st December 2012 13,765 
Provisions
At 1st January 2012 2,823 
Additions 3,478 
Reversals (1,191)
At 31st December 2012 5,110 
Net book value
At 31st December 2012 8,655 
At 31st December 2011 8,814 
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54
Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Notes to the Company Accounts
For the year ended 31st December 2012
34. Fixed asset investments continued
During 2011 the Company acquired 100% of the share capital of Densitron Display Taiwan Ltd from Densitron Asia Ltd for a 
consideration of NT$43 million.
The principal subsidiaries are set out in note 14. The investments in subsidiary undertakings were revalued in April 2013 by the 
Directors. The Directors do not consider the current valuation to be different from the carrying value. If the investments had not been 
revalued the relevant fixed asset category would have been included in the accounts at the following amounts:
Subsidiary
 undertakings
£000
Cost 10,087
Provisions 2,215
At 31st December 2012 7,872
At 31st December 2011 7,872
35. Debtors
2012
£000
2011
£000
Due within one year
Amounts owed by subsidiaries 1,743 182
Other debtors 54 184
Prepayments and accrued income 37 55
1,834 421
36. Creditors: amounts falling due within one year
2012
£000
2011
£000
Bank loans and overdrafts 534 193
Trade creditors 62 48
Amounts owed to subsidiary undertakings 2,969 3,195
Other creditors 51 44
Accruals and deferred income 88 103
3,704 3,583
37. Provisions for liabilities
Legal
costs
£000
Post
retirement
benefits
£000
Total
£000
As at 1st January 2012 125 98 223
Charged in the year (125) (10) (135)
As at 31st December 2012 — 88 88
The provision for legal costs relate to the costs expected to be incurred in the defense of an action against the Company in respect of 
the lease of a property in Newcastle. Further details of the claim are in note 29.
The provision for post retirement benefits relates to payments to former employees of the Company. FRS 17 Defined Benefit disclosures 
have not been given on grounds of materiality.
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38. Called up share capital
2012
Number
2011
Number
Authorised: Ordinary shares of 1p each 
At 1st January 2012 and 31st December 2012 140,000,000 140,000,000
Issued: Ordinary shares of 1p each 
At 1st January 2012 and 31st December 2012 69,669,106 69,669,106
On 26th May 2011, following High Court approval, the Company repaid 4p per share to Shareholders reducing the nominal value of the 
shares to 1p per share.
On 23rd October 2008 the Company purchased 500,000 Ordinary shares of 5p each for 5p per share. These shares are being held in 
Treasury by the Company.
39. Share Capital and Reserves
Share
Capital
£000
Revaluation
reserve
£000
Special
reserve
£000
Retained
earnings
£000
Total
£000
Balance at 1st January 2011 3,483 117 117 5,130 8,847
Retained loss for the financial year — — — (470) (470)
Capital reduction (2,786) — — 20 (2,766)
Transfer from special reserve — — (10) 10 —
Balance at 31st December 2011 697 117 107 4,690 5,611
Balance at 1st January 2012 697 117 107 4,690 5,611
Retained loss for the financial year — — — (221) (221)
Revaluation of investments — 1,420 — — 1,420
Transfer from special reserve — — (10) 10 —
Balance at 31st December 2012 697 1,537 97 4,479 6,810
Following the cancellation of its share premium account the Company is required to set aside that amount of the share premium 
account totalling the value of creditors in existence at that time until those creditors are repaid.
40. Reconciliation of Shareholders’ funds
2012
£000
2011
£000
Shareholders’ funds at 1st January 2012 5,611 8,847 
Profit for the financial year 194 498 
Dividends paid (415) (968)
Revaluation of investments 1,420 —
Capital reduction — (2,766)
Shareholders’ funds at 31st December 2012 6,810 5,611 
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Densitron Technologies plc 
Annual Report and Accounts for the year ended 31st December 2012
Notes to the Company Accounts
For the year ended 31st December 2012
41. Employee information
The average number of employees (including Directors) during the year was as follows:
2012
Number
2011
Number
Administration 7 7
Staff costs for the above employees during the year amounted to:
2012
£000
2011
£000
Wages and salaries 297 296
Social security costs 33 27
Pension costs 17 15
347 338
2012
£000
2011
£000
Directors’ remuneration
Salaries and fees 282 391
Amounts paid to third parties 34 33
Defined contribution pension payments 58 51
374 475
The emoluments of the highest paid Director 159 166
The number of Directors receiving defined contribution pension payments are: 2 3
Two of the Executive Directors are directly employed by subsidiaries of Densitron Technologies plc.
Amounts paid to third parties are in respect of the services of Mr J Holmstrom provided by Bronsstädet AB.
42. Leases
2012
£000
2011
£000
Annual operating lease commitment
Land and buildings expiring within one year 43 —
Land and buildings expiring after more than one year — 60
43 60
43. Contingent liabilities and guarantees
The Company is a defendant in a legal action involving a property in which it is alleged that the Company is the legal tenant. Full details 
of the claim are in note 29.
At 31st December 2012 the Company had guaranteed:
•	 The bank facilities of its UK subsidiary undertakings. The overdraft amounted to £616,000 at 31st December 2012 (2011: £193,000). 
These facilities are secured by a fixed and floating charge with cross guarantee over the assets of the Group.
•	 Deferred vat liabilities in favour of HM Revenue and Customs up to £10,000 (2011: £10,000).
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Densitron Technologies plc
4th Floor
72 Cannon Street
London
EC4N 6AE
T +44 (0) 20 7648 4200
F +44 (0) 20 7648 4201
E sales@densitron.co.uk 
www.densitron.com
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