APPLEDORE SHIPBUILDERS LTD.

We have an overriding objective that drives the way we aim to do business:

· To be the leading engineering support services business in the UK and selected overseas markets, thereby creating value for our stakeholders – our customers, our investors and our people.

We will achieve this through:

Leading market positions.

Working with preferred customers.

Supporting customer focused, long term relationships.

Integrating engineering and technical expertise.

Balancing risk and reward.

Maintaining an excellent safety record.

We expect our business to be one of the top three in their market sector. If they are not they will have clear plans to acheive this goal.

Progress:

During the year we have consolidated our leading position in all our divisions through acquisitions and major contract wins.

Key Examples:

Sole provider of support to the Royal Navy's submarine fleet.

Largest Prime contractor for Defence Estates.

The sole distributer of Volvo equipment in South Africa.

We seek to work with customers who own large strategically important assets. These customers tend to be government departments, public bodies or private companies operating in highly regulated markets.

Progress:

The majority of our revenue is derived from our preferred customer base. This is consistent with previous years.

Key Examples:

The MoD is our largest customer in both the Marine and Defence divisions.

Network Rail, our Rail division’s largest customer, owns and operates Britain's rail infrastructure.

We provide support to British Energy’s fleet of AGR nuclear power stations.

Eskom, the South African power utility.

We seek to work collaboratively with our customers to support the long-term nature of our contracts.

Progress:

We have been awarded a number of contracts where the emphasis is on long-term partnerships rather than on short-term tasks.