RNSArticle

Invensys plc

12 June 2013

Invensys plc

Annual Financial Report

Invensys plc (the "Company") has today posted its 2013 Annual Report and Accounts (the "2013 Annual Report and Accounts") and Notice of the 2013 Annual General Meeting of the Company (the "2013 AGM Notice") to shareholders.

The 2013 Annual Report and Accounts, which were approved by the Board of Directors on 15 May 2013, constitute the Annual Financial Report for the purposes of DTR 4.1.

The Annual General Meeting is to be held at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE on Thursday, 25 July 2013 at 11.00 a.m.

In compliance with LR 9.6.1, the Company has submitted to the National Storage Mechanism the following documents, which will be available for inspection at: www.Hemscott.com/nsm.do

1. 2013 Annual Report and Accounts;

2. 2013 AGM Notice;

3. Invensys plc Forms of Proxy in relation to the Annual General Meeting 2013; and

4. Invensys plc 'Highlights and Notice of Availability'.

The 2013 Annual Report and Accounts and 2013 AGM Notice are also available on the Company's website at www.invensys.com.

In compliance with DTR 6.3.5, the following information is extracted from the 2013 Annual Report and Accounts and should be read in conjunction with the Company's Results Announcement issued on 16 May 2013, both of which can be found at www.invensys.com. Together, these constitute the material required by DTR 6.3.5 to be communicated to the media in full unedited text through a Regulatory Information Service. This material is not a substitute for reading the 2013 Annual Report and Accounts in full and page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2013 Annual Report and Accounts.

Chairman's Statement

The following information is extracted from pages 6 and 7 of the 2013 Annual Report and Accounts.

Dear Shareholder

The past year has undoubtedly been transformational for Invensys. Our decision to sell Invensys Rail to Siemens for £1,742 million followed a detailed strategic review that concluded that a disposal would be the best way of maximising value for shareholders. As a result, we have been able to deal with our legacy UK pension issues in a way that has been acceptable to our shareholders, the Trustee and the Pension Regulator. We will also be returning £625 million of cash to shareholders and we will still retain substantial funds to invest in our more focused technology businesses both organically and through acquisitions. Going forward, one of the major priorities of your Board will be to ensure that the investment of these funds continues to build upon the significant increase in shareholder value that has already taken place.

The Board

There were no changes to the membership of the Board during the year.

Francesco Caio and Pat Zito have informed the Board that they do not intend to seek re-election at the Annual General Meeting (AGM) and accordingly will be retiring from the Board at the close of that meeting. Given the smaller size of the Group following the disposal of Invensys Rail, we have decided that they will not be replaced and the future Board will now consist of the Chairman, three executive directors and five non-executive directors.

The Board would like to thank Francesco and Pat for their contributions to the Board and we wish them well for the future.

Our people

The achievements of the past year reflect the efforts of everyone at Invensys. Many were involved in the disposal of Invensys Rail and the subsequent reorganisation and all were responsible for ensuring that our daily business was not affected by these activities. On behalf of the Board, I would like to thank all of Invensys' people for contributing to such a transformational year.

Dividend and dividend policy

The Board has recommended a final dividend of 2.85 pence per share, amounting to £23 million, which brings the total dividends payable in respect of the year ended 31 March 2013 to 4.6 pence per share (2012: 4.4 pence per share), an increase of 5%. The amount paid per share could increase dependent upon the share capital consolidation as detailed below.

If the return of cash to shareholders and subsequent share capital consolidation are approved by shareholders and take place as planned, the Board has recommended that the total amount of the final dividend will remain the same, £23 million, but will be paid on the smaller number of shares in issue resulting from the share consolidation. Therefore the amount paid per share would increase and details of these changes will be set out in the circular to shareholders to be issued regarding the return of cash.

Subject to approval by shareholders at the AGM on 25 July 2013, the final dividend will be paid on 2 August 2013 to shareholders on the register at 21 June 2013. A dividend reinvestment plan (DRIP) is available for this final dividend, which will enable shareholders to reinvest their dividends directly into Invensys shares.

The Board remains committed to a progressive dividend policy with future dividend growth reflecting the long-term sustainable trend in underlying earnings per share and free cash flow.

Outlook

Looking ahead, we do not expect any significant changes to general market conditions in the near term but anticipate an improved performance due to continued growth in our higher-margin segments, especially Software, and the benefits of the Group reorganisation.

We expect our Software segment to show good growth supported by our customers' requirements for optimisation, efficiency and productivity. The Industrial Automation segment is likely to see continued strength in its brownfield revenue stream which will be offset by an anticipated decline in revenue from large greenfield projects such as China Nuclear; however, margins should improve due to the improved sales mix. Energy Controls is likely to be stable as management works to consolidate the range of businesses and drive market and technology synergies. Appliance is expected to see modest growth helped by somewhat improved conditions in North America.

Sir Nigel Rudd
Chairman

Chief Executive's Statement

The following information is extracted from pages 8 and 9 of the 2013 Annual Report and Accounts.

The past year was transformational for Invensys. The disposal of Invensys Rail for £1,742 million has enabled us to deal with our legacy UK pension issues, recommend a substantial return of cash to shareholders and provided us with significant funds to invest in our future. It has also allowed us to carry out a reorganisation of the Group, removing our previous divisional structure and providing significant cost savings of £25 million per annum by April 2014.

Invensys is now a focused supplier of industrial software, systems and control equipment, delivering state-of-the-art technologies to the world's major industries. The lines of business structure we began to put in place last year has enabled us to concentrate upon those areas with the greatest opportunities for growth and profitability. We now have significant resources to invest in these businesses which we will do in a thoughtful and disciplined manner to enhance shareholder value.

Disposal of Invensys Rail

Following a strategic review which highlighted the likely consolidation in the global rail signalling market and the limited scope to increase the size of the Invensys Rail division, we decided to refocus the Group around our industrial software, systems and control equipment businesses and, accordingly, to dispose of Invensys Rail.

On 28 November 2012, we announced that we had reached agreement to sell the business to Siemens for £1,742 million on a cash and debt free basis. That price represented an attractive value for the business and fully recognised Invensys Rail's leading positions in long-term growth markets with returns ahead of its peers and well invested technology. The disposal was completed on 2 May 2013 and therefore the results of Invensys Rail have been included in discontinued operations with comparatives

restated accordingly.

Following completion, a contribution of £400 million has been made to the UK Pension Scheme and a further payment of £225 million has been made into a reservoir trust. As a result of these payments, the previous deficit reduction payments of £40-47 million per annum have ceased and it is anticipated that no further contributions will be payable into the Scheme for the foreseeable future. More details of the pension arrangements are contained in the Financial Review on page 26.

As previously announced, we now intend to return £625 million of cash to shareholders and information on the return of cash will be set out in a circular to shareholders which will be issued as soon as practicable. The return of cash is subject to the approval of Invensys shareholders at a General Meeting which is expected to take place in June 2013. It is intended that shareholders will be able to elect to receive their cash as income, capital or deferred capital or a combination of the three. Following the return of cash, we are proposing a share capital consolidation that, subject to market fluctuations, will result in the share price being returned to approximately the same level as before the return of cash.

Reorganisation and revised business segment reporting

Following last year's creation of individual lines of business within our divisions to bring additional focus upon our leading brands and technologies, the disposal of Invensys Rail has enabled us to take the further step of removing our former divisional structure. This reorganisation will give rise to significant savings of around £25 million per annum by April 2014.

As a result, we have changed our external reporting from 1 April 2013 to reflect the new basis on which information will be reported internally. We will group our lines of business into four new business segments. This grouping brings together businesses with similar economic characteristics, operating margins, market drivers and technologies as well as providing greater transparency as to the true value of our market-leading businesses:

• Software which consists of the software businesses previously within Invensys Operations Management and includes our Wonderware®, SimSciTM and Avantis® brands.

• Industrial Automation which consists of the systems businesses of our Foxboro®distributed control systems (DCS) and Triconex® safety systems with the addition of the Foxboro measurement and instrumentation products previously within the equipment business of Invensys Operations Management.

• Energy Controls which consists of the Eurotherm® and IMServ® businesses previously included within the equipment business of Invensys Operations Management, together with the residential heating and commercial businesses that were formerly part of Invensys Controls.

• Appliance which consists of the Appliance controls line of business previously within Invensys Controls, together with the appliance replacement parts business formerly within Wholesale, also part of the former Invensys Controls.

Although the commentary on the past year's performance contained in this Annual Report and Accounts is based upon the previous reporting structure, we will be using these new business segments for future reporting.

The past year's performance by new business segment, together with an estimate of the allocation of cost savings from the Group reorganisation is shown on page 23 in the Financial Review.

Looking ahead

As a focused supplier of industrial software, systems and control equipment to the world's major industries, we will be focusing our investment on growing those lines of business which offer attractive long-term growth prospects with high returns on investment and excellent cash conversion. In particular, we will focus on expanding the breadth and depth of our higher-margin software businesses, which represent a major engine of future growth.

Our long-term sustainable growth will therefore be driven by maintaining and developing our leading technologies; focusing on project and commercial execution excellence; developing our portfolio through bolt-on acquisitions; supporting and expanding our customer base and growing our business in emerging markets.

Operationally and financially, Invensys is now well placed to capitalise on markets with long-term structural growth prospects and deliver further value for shareholders.

Wayne Edmunds

Chief Executive

Directors' responsibility statement

The following information is extracted from page 76 of the 2013 Annual Report and Accounts.

We confirm that to the best of our knowledge:

a) the Group Financial Statements for the year ended 31 March 2013, prepared in accordance with International Financial Reporting Standards as adopted for use in the European Union or, in this case of the Company's financial statements, United Kingdom Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation as a whole; and

b) the Business Review includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

Wayne Edmunds

Chief Executive

David Thomas

Chief Financial Officer

Risks and Uncertainties

The following description of Risks and Uncertainties is extracted from pages 36 to 38 of the 2013 Annual Report and Accounts.

Failure to maintain a competitive and technologically advanced product range could reduce margins and revenue growth

Invensys operates in highly competitive markets and the Group's products and services are characterised by continually evolving industry standards and rapidly changing technology, driven by the demands of the Group's customers. As an illustration of this, our Software business segment continues to invest in industrial software applications to optimise plant performance for our global customers.

Impact

Failure to keep pace with technological changes and system or application requirements in the industrial sectors may result in loss of market share and lower margins. Furthermore, delays to development programmes may adversely impact the delivery of major projects.

Mitigation

The Group invests in research and development to create new technologies and products to sustain or improve its competitive position. However, all new technologies and products involve business risk in terms of possible abortive expenditure including asset impairments, reputational risk and customer claims. The Group reviews its portfolio of technologies as part of the strategic planning process. In addition, there is a regular review process to control individual development programmes.

The timing and frequency of substantial contract awards are uneven

Our Industrial Automation business segment is associated with the supply of technology and consulting to the oil and gas, chemical and nuclear industries. Capital expenditure requirements from customers in these industries are often highly cyclical and linked to the international supply, demand and pricing of hydrocarbons. Also the timing of new contract awards in the nuclear industry may be impacted if certain nuclear programmes are subject to delay or cancellation.

Impact

The timing of contract awards is uncertain and delays in awards may result in volatility in the order book and operating performance. Major projects may also impact the profitability where a substantial element of the contract may be supplied by third parties. In addition, the opportunity to develop control and safety systems for the nuclear industry may lead to an increased dependence on a small number of major customers for our Industrial Automation business segment.

Mitigation

The Group monitors its order pipeline, sales activity, sales cover in its order book, expected margins and the impact of potential delays on the expected results to allow appropriate mitigating actions to be considered.

Undertaking large, long-term projects exposes the Group to risk of loss

A significant amount of the Group's business involves long-term projects that can take many months or even years to complete. These projects may be subject to delays and cost overruns due to delays in technology development, equipment deliveries, engineering problems, work stoppages, unanticipated cost increases, shortages of materials or skilled labour or other unforeseen problems inherent in the nature of such projects.

Impact

The Group's failure to anticipate technical and development problems, estimate costs, control delivery or receive timely payments may reduce the profitability of such a contract and impact cash collection.

Mitigation

The Group has an established process with clear delegated authorities for the approval of major contracts, which includes a review system for the approval of bids submitted to customers. Contracts with a large monetary value or non-standard contractual terms require Board approval. Execution of major projects is subject to regular reporting to the Board.

The Group may be subject to financial loss and/or damage to its reputation as a result of product liability claims

Errors and defects in the Group's products, systems or applications, which may be used in safety-critical applications, could cause injury to persons or damage to property and equipment or be the subject of product recalls.

Impact

These occurrences could result in claims, loss of revenue, warranty costs, costs and damages associated with product recalls, litigation, delays in market acceptance or harm to the Group's reputation for safety and quality.

Mitigation

Each business segment has an established quality control function and, if an event occurs, there are processes to investigate and manage the occurrence.

The Group may be exposed to liability through the actions of co-source partners or its supply chain

On occasions the business activities of the Group are conducted with co-source partners whose day-to-day management actions are outside the control of the Group. A significant element of the Group's risk profile is the delivery performance of its supply chain. These partnerships exist across our businesses.

Impact

Given the nature of the Group's business mix, a quality or other failure in the supply chain could present a risk to safety and delivery which might have a material adverse effect on the Group's business, financial performance and/or reputation. There is also a risk that regulatory non-compliance of partners could have a material adverse effect on the Group's reputation.

Mitigation

Assessment, mitigation and management of these risks are addressed by the business segments in conjunction with our legal and risk departments. In-depth due diligence on partners is undertaken where considered appropriate, and cross indemnities entered into to mitigate liability.

The Group may be exposed to additional liabilities with respect to its UK and US pension plans

The Group has a large level of gross liabilities in respect of its major pension plans relative to its market capitalisation.

Impact

With respect to both of the Group's major pension plans for its UK and US operations, any material decline in the equity market, improvement in life expectancy, change in expected morbidity rates, long periods of low inflation or deflation, or future decreases in interest rates could require additional funding contributions in excess of those currently expected.

Mitigation

The Invensys Pension Scheme (UK) has a high proportion of pensioners relative to its active workforce which provides a level of certainty with respect to the valuation of the plan's liabilities. In addition, its investment policy has been established to address the need to match the plan assets and liabilities as far as is realistically possible. On completion of the sale of Invensys Rail there was a £400 million contribution into the Scheme and the creation of a £225 million reservoir trust for the benefit of the plan. It is anticipated that no further contributions will be payable into the Scheme for the foreseeable future. The Group will continue to monitor the performance of the principal UK and US plans.

The Group is subject to on-going litigation and environmental liabilities

As a consequence of the past disposal of a significant number of businesses, the Group has, or may incur, certain liabilities in relation to environmental claims (including the cost associated with the remediation of contaminated sites no longer owned by the Group), litigation (including personal injury claims arising from alleged exposure to asbestos and silica), indemnity claims and other disposal costs relating to the disposed businesses. These risks have receded over time as warranties and indemnities in relation to past disposals have expired, existing disputes have been settled and remediation work on contaminated sites has been completed. The Group also has environmental liabilities in relation to the remediation of vacant sites which it owns.

Impact

All of these liabilities are subject to a number of uncertainties, assumptions and contingencies, and there can be no assurance that the liabilities will not be substantially higher or become payable sooner than anticipated, or that the provisions in the Group's accounts in respect of any such liabilities will be sufficient.

Mitigation

The Group continually monitors the remaining liabilities and has established performance indicators to support and facilitate this. The indicators include cash spend, provisions, insurance recoveries and estimated exposures. The Group has recently carried out a detailed review of the related provisions and will continue to monitor the level of provisions going forward. In negotiations it aims to limit the risk of future liabilities or disputes.

The Group is exposed to cyber risks

In common with other entities, the Group is exposed to risk of business disruption and intellectual property loss associated with adverse cyber incidents. Invensys provides products, services and solutions for industrial control systems responsible for monitoring and controlling a variety of processes and operations including gas and electricity distribution, water treatment and oil refining. These control systems may be susceptible to disruption through cyber events and the Group may incur liabilities as a result of such events.

Impact

These events could result in claims, loss of revenue, warranty costs, costs and damages associated with product recalls, litigation, delays in market acceptance or harm to the Group's reputation for safety and quality.

Mitigation

The Group has established quality and security processes to address this.

Directors' loan and pension commutation

The following description of Director's loan is extracted from Note 32 on page 137 of the 2013 Annual Report and Accounts.

During the year ended 31 March 2011, a loan was made to Mr Henriksson while he was a director of the Company in view of the double taxation suffered in relation to his US employment duties in 2009/10. Mr Henriksson left the Company on 24 March 2011. Invensys Systems Inc. advanced £312,691 on 29 June 2010 to Mr Henriksson, being an amount equal to the expected refunds due from HMRC. As at 31 March 2013 this loan remains outstanding, is free of any interest, and will be repayable within five business days from the date of HMRC making the expected refund to Mr Henriksson. Mr Henriksson's repayment obligations are not affected by the termination of his employment with the Company.

A further loan has been advanced to Mr Edmunds during the year ended 31 March 2013 in view of the double taxation suffered in relation to his US employment duties in 2010/11 and 2011/12. Invensys Systems Inc. advanced £78,498 on 24 May 2012 to Mr Edmunds, being an amount equal to the expected refunds due from HMRC. As at 31 March 2013 an amount of £65,532 remained outstanding, with the

balance being repaid to Invensys Systems Inc. on 13 May 2013 following HMRC refunding the amount to Mr Edmunds.

No further loan has been advanced to any director during the year ended 31 March 2013.

Related Party Disclosures

The following description of related party transactions is extracted from Note 33 on page 137 of the 2013 Annual Report and Accounts. A condensed version of this note was published in the Results Announcement as Note 14.

Details of transactions that have been entered into with related parties for the years ended 31 March 2013 and 31 March 2012 are as follows:

(i) Remuneration of key management personnel

The key management comprises the Group Leadership Team and the non-executive directors. This represents a change from previous years, when key management was considered to comprise only the directors. The Group has changed its conclusion on the composition of key management as a result of the increased contribution to decision making made by those members of the Group Leadership Team who are not also directors. The membership of the Group Leadership Team and the non-executive directors are disclosed on pages 43 and 44.

Remuneration is as follows:

2013

£m

2012

£m

Short-term employee benefits

Share-based payment

Short-term employee benefits comprise salary and benefits earned during the year and bonuses awarded for the year.

Full details of individual directors' remuneration are given in the Remuneration Report.

(ii) Other related party transactions

There are no other related party transactions that have a material effect on the financial position or performance of the Group in the year (2012: none) other than the directors' loans disclosed in Note 32.

Contact:

Invensys plc Steve Devany tel: +44 (0) 20 3 155 1301