Company Registration No. 08988813 (England and Wales)
Aquila Services Group plc
Annual report and financial statements
for the year ended 31 March 2017
Aquila Services Group plc
Contents
Directors and Advisers
Chairman’s Statement
Strategic Report
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Statement of Directors’ Responsibilities
Independent Auditors’ Report to the Members
Consolidated Statement of Comprehensive Income
Consolidated and Company Statements of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
Page
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57
Aquila Services Group plc
Directors and Advisers
Directors
Jeffrey C Zitron
Derek M Joseph
Dr Fiona M Underwood
Steven F Douglas
Susan M Kane
J Richard Wollenberg
Chairman
Non-Executive Director
Joint Chief Executive
Joint Chief Executive
Finance Director
Non-Executive Director
Company Secretary
Dr Fiona M Underwood
Registered office
Independent Auditors
Corporate Advisor
Bankers
Registrars
Tempus Wharf
29A Bermondsey Wall West
London
SE16 4SA
Saffery Champness LLP
71 Queen Victoria Street
London
EC4V 4BE
Beaumont Cornish Limited
2nd Floor Bowman House
29 Wilson Street
London
EC2M 2SJ
National Westminster Bank plc
50 High Street
Egham
Surrey
TW20 9EU
Neville Registrars
Neville House
18 Laurel Lane
Halesowen
B63 3DA
Company Number
08988813
Company website
www.aquilaservicesgroup.co.uk.
1
Aquila Services Group plc
Chairman’s Statement
Dear Shareholder,
I am pleased to present the annual report and the Financial Statements for the year to 31 March
2017.
Aquila Services Group plc (‘‘the Company’’), previously General Industries plc, is the holding
company for Altair Consultancy & Advisory Services Ltd (‘‘Altair’’) and Murja Ltd (“Murja”) which form
the Group (‘‘the Group’’).
The Group provides financing and management consultancy advice on all aspects of affordable
housing across the United Kingdom and Republic of Ireland to housing associations, local
authorities, government agencies and other non-profit organisations as well as high level business
advice to the property sector.
The Group’s strategy is to expand the range of professional services either through organic growth
or acquisition to offer clients a 'one stop shop' for all their higher-level support requirements.
Group Members
Altair Consultancy and Advisory Services Limited
Altair is a specialist management consultancy providing professional services to local authorities,
housing associations, charities, property companies, regulators and government departments. The
consultancy covers the whole of the United Kingdom and in the year under review has focused on
expanding into the Republic of Ireland and increasing its client base in the Midlands and North of
England. This year Altair has undertaken its first consulting assignment in Africa. Altair advises on
all aspects of the development and management of affordable housing for rent and sale, and on the
effective management of organisations operating in this sector.
Murja Limited
Murja is a specialist treasury management consultancy authorised and regulated by the Financial
Conduct Authority. Murja advises local authorities, housing associations, colleges and other bodies
on their capital funding requirements and supports them in securing debt finance. The business
operates through both retained contracts with a significant number of clients and one-off specific
projects which result in additional fees being generated when projects are complete.
Business Review
During the year under review, the Group continued to grow both its capacity and its client-base;
expanding and strengthening its consultancy capacity through the recruitment of high-calibre
individuals to support the national coverage and increased product offering. The Group has
developed a series of new products and services and this has provided opportunities to successfully
bid for larger, and more complex, contracts.
Brexit, change in political leadership, the wider global economic uncertainty, and the recent General
Election all cause uncertainty for our clients. This coupled with changes in government policy,
regulation, devolution, the ever-changing funding environment, and exposure to the wider residential
property market affect the clients of both subsidiaries. Changes and challenges on this scale lead to
an increase in the demand for high quality consultancy advice as clients look to find ways of using
resources – money, people and technology – more effectively and efficiently.
2
Aquila Services Group plc
Chairman’s Statement
Alongside this, the public, regulators and government expect ever improving performance and
quality from the Group’s clients. The track record of the company’s subsidiaries show that they are
well placed to provide the support services and therefore the trading conditions required by our
clients.
During the period of review, we have successfully partnered with 3C, a specialist IT consultancy
company to increase our offering to the sector.
Financial results
For the year to 31 March 2017, Group turnover rose to £5.928m, an increase of 25% over the year.
Altair’s consultancy and interim management business contributed £5.456m (2016: £4.628m) and
Murja’s £0.472m (2016: £0.118m).
Gross profit rose to £1,475k (2016: £1,288k) with operating profit, before share option charges, of
£658k (2016: £545k). Operating profit took into account investment in new staff for Altair and Murja
to meet growing demand, particularly, in the North of England, Midlands and Scotland. Profit after
tax, attributable to shareholders, was £404k (2016: £167k1) and earnings per share was 1.24p
(2016: 0.61p2).
The comparison between this reporting period, the mid-year results and the previous year’s results
for the Group are as follows:
Turnover
Gross profit
Operating profit (before share option
charge)
Share option charge
Operating profit (after share option charge)
Year ended 31
March 2017
(audited)
£000s
5,928
1,475
658
6 months to 30
September 2016
(unaudited)
£000s
2,796
673
307
Year ended 31
March 2016
(audited)
£000s
4,746
1,288
545
148
510
68
239
255
290
The Group has a strong balance sheet with over £2.3m in cash deposits as at 31 March 2017.
Dividend
The directors propose a final dividend of 0.50p per share (2016: 0.44p), making a total dividend for
the year of 0.74p per share (2016: 0.66p), an increase of 12% compared to 2016. This will be
payable on 4 August 2017 to shareholders on the register at 21 July 2017.
Outlook
The outlook for the Group remains positive. The affordable housing sector is a key market for the
Group and the continued political pressure to deliver more homes coupled with the recent move
from the government to include affordable rent within its previous sales only ‘Affordable Housing
Funding Programme’ will enable the Group’s clients to increase their delivery of new homes.
1 Adjusted Profit after Tax to exclude deemed cost of listing
2 Adjusted Earnings per share to exclude deemed cost of listing
3
Aquila Services Group plc
Chairman’s Statement
The Housing and Planning Act 2016 has meant changes for our clients within the housing sector,
although some expected policy changes have not yet come into force due to delays caused by the
Referendum and the subsequent changes within the government. There will now be further delays
as a result of the early General Election.
However, changes to the regulation for the housing sector in England are moving forward with the
separation of the Homes and Communities Agency into two bodies: Regulation and Homes England
(the investment arm) plus amendments to regulation to ensure that housing organisations are no
longer classified as public bodies. These changes will translate into opportunities for the Group to
increase its revenues and profitability by offering an increased range of funding advice and
consultancy services.
The task for our clients will be to help the government make the case for continued support and
investment in housing solutions. With the government’s focus on Brexit, it is even more important
that the housing sector has a coherent and well-articulated offer.
The Group will continue to work with housing providers of all types, including housing associations,
local authorities, house builders and private sector providers. We will support their growth, helping
them change to improve and supporting their resilience to the current and future operating
environment. This coupled with our constant engagement with the policy landscape ensures that we
are able to provide credible, innovative and practical solutions to our client needs.
The increasing profile of public and political debate around the funding of care and support services
will also provide opportunities as well as threats for a number of our clients; we will be developing
our services to provide support in this area.
We continue to investigate acquisitions and other opportunities to increase the scope and depth of
the business.
May I take the opportunity to record my thanks to my fellow directors, executive team and staff of the
Group. As a people-business, the Group is dependent on their enormous commitment and
expertise. I look forward to reporting further progress as part of the half year results.
Jeffrey Zitron - Chairman
28 June 2017
4
Aquila Services Group plc
Strategic Report
Our business
Aquila Services Group plc (‘‘the Company’’) comprises two subsidiaries, Altair Consultancy and
Advisory Services Limited (“Altair”) and Murja Limited (“Murja”).
Altair
Altair provides support services to enable other organisations to carry out their activities in a more
efficient manner. It helps manage complex and diverse organisations through periods of significant
change, driving service improvement and delivering creative solutions. Altair’s traditional client base
includes housing associations, charities and local authorities, although the client base also includes
government departments, statutory bodies, financial institutions and other private commercial
institutions.
Within the housing sector, Altair provides a broad range of advisory and consultancy services to its
clients covering areas such as general management, high level executive recruitment, corporate
governance, financial planning, management strategy, organisational improvement and training. We
also have strong relationships with the English Regulator (the Homes and Communities Agency),
Greater London Authority, Welsh Government, the Scottish Regulator, the Irish Housing Regulator
and the Irish Council for Social Housing. Altair’s services also cover the application of government
strategies to increase the supply of affordable housing both for rent and home ownership as well as
local government initiatives encouraging the transfer of public sector housing to independent
vehicles. We have recently completed our first advisory assignment in Africa.
Murja
Murja specialises in providing advice to organisations principally involved in the affordable housing
and education sectors in respect of debt and interest rate risk. With changes to Government policy,
there is a strong and growing market for the provision of specialist treasury services to local
authorities, housing associations and charities operating in the provision of affordable housing,
market rent and low-cost home ownership initiatives. Housing associations and local authorities are
seeking more complex legal and financial structures for both, particularly with the involvement of
house builders and developers in joint ventures. The complementary services and products offered
by Altair to the sector provides a significant opportunity for growth.
Strategy and Objectives – Leadership, Quality, Insight
The strategy and objectives of the Group are:
▪ Provide consultancy advice and support to organisations operating within or aligned to the
public sector.
▪ Continue to seek out acquisitions which will expand our range of services and scope of
business to increase our ability to be a one-stop shop of professional support services for the
clients of our subsidiary companies.
▪ Attract and retain employees by providing a great place and environment to work and enable
employee participation and reward through equity participation.
▪ To increase our client base nationwide, with particular emphasis on the North of England,
Midlands and Scotland.
▪ Encourage innovation through the development of new products.
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Aquila Services Group plc
Strategic Report
▪ To continue exploring the opportunities that are occurring as a result of the Group’s expertise
in overseas markets
Review of the Business
The year under review has achieved the following financial results.
The Group saw a 25% increase in turnover on 2016, reflecting continued growth in Altair’s housing
consultancy and interim management business and the successful embedding of Murja within the
Group. Gross profit from the consultancy, interim management and treasury business rose by over
£187k, with margins at 25%. Altair has made a substantial investment in staff over the last two
years in anticipation of future growth; (after allowing for both the additional staff investment
mentioned and the charge in respect of staff options) the Board anticipates that this investment will
aid future profit growth. The Group is in a very strong net asset position, with over £2.3m in cash
held at 31 March 2017.
The underlying business remains strong and there has been continued growth of the client base in
the consultancy business outside of London and the South East. We have seen an increase in
cross-company opportunities between Altair and Murja, being able to offer consulting and treasury
advice to our clients both in the United Kingdom and Ireland. We have undertaken our first
consultancy assignment in Africa and are hoping that this will lead to further opportunities. Our
focus on the policy environment has provided Altair with the opportunity to research and publish our
findings on a variety of topics; Future gazing, Innovation – the brave new world (in collaboration with
the National Housing Federation), and working with the Chartered Institute of Housing and a
recently merged housing association (VIVID), we are developing a practical guide to how councils
and housing associations can work better together which will be published in the Autumn of 2017.
We are also working with three housing organisations to deliver a leadership programme to support
aspiring leaders from BME backgrounds. We will continue to seek out research opportunities to
help inform the decision makers throughout the sector and government.
In the first six months of the year, Altair invested in and expanded its consultancy capacity through
recruitment of new consultants focusing on increasing its national coverage and developing new
products and services to reflect the changing operational and political environment of our clients.
This investment has provided opportunities to bid for larger contracts and, as a consequence, has
extended the consultancy pipeline. This has been aided by our partnership with 3C, a specialist IT
consultancy company, and our investment in ‘lean expertise’ to strengthen our innovative
Organisational Excellence product. Altair has also provided Human Resource and Personnel
services to clients through retained contracts during the year. The core consultancy and interim
business remains strong and the client base continues to grow in number and range.
Murja has similarly expanded its specialist treasury management services. A significant number of
clients are on retained contracts and additional fees are secured once specific projects have been
completed. During the year under review, a number of these specific projects have commenced
with fees expected to accrue during the next twelve months.
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Aquila Services Group plc
Strategic Report
The comparison between this reporting year, the mid-year results and the last reporting year are set
out below:
Turnover
Gross profit
Operating Profit
Year ended 31
March 2017
(audited)
£000s
5,928
1,475
510
6 months to 30
September 2016
(unaudited)
£000s
2,796
673
307
Year ended 31
March 2016
(audited)
£000s
4,746
1,288
290
Operating profit includes share option charge as follows:
Share option charge
148
68
255
The Group hasn’t identified any post balance sheet events, as set out in note 27 to the Financial
Statements.
The changes in the political and economic environment, the Referendum resulting in the uncertainty
of the Brexit negotiations, the change in leadership of the Conservative Party, the newly elected
President of the USA, and the General Election have and will continue to be a catalyst for change
with our clients and all provide opportunities for the future. The Group anticipates that it will
continue to expand organically through recruitment to assist the delivery of projects nationwide.
The Group will also continue to look at opportunities to expand its consultancy base through
acquisition to offer an increased scope of services and products to our clients.
Key Performance Indicators
The Group monitors its key performance indicators (KPI’s) regularly and these are set out below:
2017
2016
2017
2016
Revenue
5,928,201
4,746,144
Number of
clients
212
194
Gross profit
1,474,735
1,287,612
Earnings
per share
1.24p
0.61p3
New clients
(%)
72
Client retention rate
(%)
64
40
68
3 Adjusted Earnings per share to exclude deemed cost of listing
7
Aquila Services Group plc
Strategic Report
Principal Risks and Uncertainties
The principal risks currently faced by the Group are:
Financial Instruments
The main financial risks arising from the Group activities are credit risk, foreign currency risk and
interest rate risk details of which can be found in Note 26 to the Financial Statements.
Unfavourable economic conditions and / or changes to government policy
The Group’s operating results and its financial condition may be negatively affected by a downturn in
the general economic climate within the UK which consequently may have adverse effect upon
government policy and spending, and private sector investments.
A reduced level of economic activity will restrict the amount of outsourcing by companies, local
authorities or other bodies and result in the restriction of funding available for the purchase of such
services leading to a decline in the number of firms in the sector and their profitability.
The continuing Brexit negotiations could lead to a period of uncertainty and may delay the
implementation of government policy pertaining to housing. This may cause clients to review their
spending with consultancy providers and lead to a reduction in projects.
Reduction in government investment and funding
The Group’s future revenues and profitability will be dependent on the current UK Government’s
policy with regard to expenditure on service and social housing improvements and to public
expenditure levels in general. The introduction of policies to restrict the income for housing
providers is a risk that the Group is monitoring closely.
The UK Government and local authorities may decide in future to change their programmes and
priorities including reducing present or future spending and investment where the Group would
expect to compete for work.
Competition
The contracts and procurement arrangements under which companies operating in these sectors
compete for new business can lead to a higher cost of procuring new contracts and the possibility of
not meeting fully the terms of contracts leading to reduced margins.
Staff skills, retention, recruitment and succession
The success of the Group is dependent on retaining, developing, motivating and communicating
with senior management and personnel and as the business grows on recruiting appropriately
skilled, competent people at all levels. The shortages in the availability of appropriately skilled
personnel may have a negative effect on the Group. The Directors of the subsidiaries are expected
to contribute to its ability to obtain, generate and manage opportunities.
If the Group cannot successfully attract, retain and motivate such personnel, it may not be able to
maintain standards of service or continue to grow its businesses as anticipated. The loss of such
personnel, or the inability to attract, retain, motivate and communicate with additional skilled
employees required for their activities within an affordable cost base, could have an adverse effect
on the Group’s business and prospects.
8
Aquila Services Group plc
Strategic Report
Principal Risks and Uncertainties (continued)
The Group seeks to mitigate all these risks through ensuring that it monitors changes in statutory,
regulatory and financial changes and maintains good relationships with its principal contacts within
government, regulators and other key influencers within the sector.
The Group is well placed to provide the full range of services needed by housing providers as the
external environment changes and the outlook for the business continues to be positive. A
continued understanding of its position in the market and delivering value for money to clients will
ensure that services and products remain competitive. In addition, the Group will ensure that its
people policies are refreshed and follow good practice so that it can continue to attract and retain
excellent staff.
Employees
A split of our employees and directors by gender as at the end of the year is shown below:
Directors of the Company
Directors of subsidiary companies not included in above
Employees in other senior management positions
Total senior managers other than directors of the Company
Other employees of the Group
Total employees of the Group
Male
Female
4
3
1
4
7
15
2
0
6
6
11
19
The Group consults with its employees on a regular basis through direct updates and conducts an
annual review of staff; results are reviewed and discussed by the Directors and an action plan
agreed and discussed with all staff. The Group invests in training and developing its employees
through both internal and external courses.
The Group follows the legislative requirements set out in the Equality Act 2010 which covers all
aspects of equality and diversity, replacing previous legislation covering equal pay, sex, race and
disability discrimination. The Group gives due consideration to all applications and provides training
and the opportunity for career development wherever possible. The Board is also mindful of the
Human Rights Act 1998.
Environment
We understand and effectively manage the actual and potential impact of our activities. The
Group’s operations are conducted such that compliance is maintained with legal requirements
relating to the environment.
Corporate and Social Responsibility
The Group recognises that we have a responsibility to ensure the impact of our business is positive,
and that we are good corporate citizens.
▪ We are committed to treating with respect and dignity those we work with.
▪ We are committed to honesty and transparency in our communication with staff, external
stakeholders, and customers.
9
Aquila Services Group plc
Strategic Report
▪ We treat all those we work with equally, and do not discriminate on the basis of age, gender,
sexuality, disability, ethnicity, or any other protected characteristic.
▪ We aim to work actively with our suppliers to ensure they meet our values and have
sustainability issues at the heart of every decision.
▪ We are conscious of our responsibilities to minimise the environmental impact of our
activities and to behave in a sustainable manner.
▪ We know that as corporate citizens we have a responsibility to the broader community. We
work with our stakeholders to understand community priorities and reflect these in our
activities.
▪ We recognise that our staff are our most valuable asset as an organisation. Our employment
policies across the Company seek to exceed mere compliance with relevant legislation, to
create a working environment that embraces diversity and offers fairness and equality of
opportunity throughout our workplace.
During the year, we continued our commitment to supporting a vibrant and inclusive leadership
within the housing sector. In response to a Chartered Institute of Housing challenge to the sector to
support the talent that is not coming through. Altair, L&Q, AmicusHorizon and the BME London
Group of Housing Associations, in partnership with Roffey Park Business school, have joined forces
to develop a leadership programme – Leadership 2025. This programme will help guide senior
BME leaders in housing to navigate the glass maze of executive leadership and become the sector
influencers of the future. We have matched the £54,000 initial investment from our partners with
£10,000 of our own resources, including Partner time and project management input. The
programme is set to launch in October 2017.
Going Concern Basis
The Board updates its three-year business plan annually which includes a review of the company’s
cash flows and other key financial ratios over the period. These metrics are subject to sensitivity
analysis which involves flexing a number of the main assumptions underlying the forecast both
individually and in unison. Where appropriate, this analysis is carried out to evaluate the potential
impact of the company’s principal risks actually occurring. The three-year review also makes certain
assumptions about the normal level of capital investment likely to occur and considers whether
additional financing facilities will be required.
Based on the results of this analysis, the directors have a reasonable expectation that the company
will be able to continue in operation and meet its liabilities as they fall due over the three-year period
of their assessment, and thus they continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Susan Kane – Finance Director
28 June 2017
10
Aquila Services Group plc
Directors Report
The Directors present their report and consolidated financial statements for the year ended 31
March 2017.
Aquila Services Group plc is incorporated as a public limited company, and is registered in England
and Wales with the registered number 08988813. Details of the Company’s issued share capital,
together with the details of the movements during the year are shown in note 17. The Company has
one class Ordinary share which carries no right to fixed income. Each share carries the right to one
vote at general meetings of the Company.
Principal activities
The principal activities of the Group are the provision of specialist housing and treasury
management consultancy services. The principal activity of the Company is that of a holding
company which manages the Group’s strategic direction.
Results
The results for the Group for the year ended 31 March 2017 are set out from page 28.
Dividends
The directors recommend a final dividend of 0.50p per Ordinary share to be paid on 4 August 2017
to shareholders on the register at 21 July 2017 which, together with the interim dividend of 0.24p
paid on 19 December 2016, makes a total of 0.74p for the year.
Directors
The following served as directors of the Company during the period or thereafter:
Jeffrey Zitron
Chairman
Steven Douglas
Joint Chief Executive
Fiona Underwood
Joint Chief Executive and Company Secretary
Susan Kane
Finance Director
Richard Wollenberg
Derek Joseph4
Non-Executive director
Non-Executive Director
Richard Murphy
Executive Director
(appointed 27/06/16)
(resigned 21/07/16)
4 Derek Joseph was finance director up until 27 June 2016
11
Aquila Services Group plc
Directors Report
Substantial Shareholdings
As at 31 March 2017, the Company was aware of the following notifiable interests in its voting rights:
Richard Wollenberg*
Steven Douglas
Chris Wood
Susan Kane
Fiona Underwood**
Derek Joseph
Jeffrey Zitron
Cardiff Property plc***
Number of
Percentage of
Nature of
Ordinary shares
Voting rights
holding
3,808,406
3,279,440
3,279,440
3,279,440
3,279,440
2,870,403
2,798,403
1,000,000
11.7%
10.0%
10.0%
10.0%
10.0%
8.8%
8.6%
3.1%
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
*Includes shares held by immediate family members of Richard Wollenberg
**Fiona Underwood’s shares are held in a nominee account at Old Mutual plc
***Richard Wollenberg holds 44.17% of the issued share capital and voting rights of Cardiff Property plc.
The Company is not aware of any changes to the above holdings between 31 March 2017 and the
date of this report.
Corporate Governance Statement
The Directors report incorporates the Corporate Governance Statement set out on pages 15 to 17.
Powers of Directors
Subject to the Company’s Articles of Association, UK legislation and any directions given by special
resolution, the business of the Company is managed by the Board of directors. Details of the
matters reserved for the Board can be found in the Corporate Governance Statement on pages 15
to 17.
Post balance sheet events
Post balance sheet events are disclosed in note 27.
Political Donations
The Group / Company made no political donations during the period.
Data Protection
The Group / Company is compliant with the Data Protection Act 1998. It is preparing for the
introduction of the General Data Protection Regulations in May 2018 by following the Information
Commissioner’s 12 step process and is starting this process with an information audit in July 2017.
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Aquila Services Group plc
Directors Report
Greenhouse Gas Emissions
The Group / Company has as yet minimal greenhouse gas emissions to report from the operations
of the Company and its subsidiaries and does not have responsibility for any other emission
producing sources under the Companies Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2014.
Auditor
Saffery Champness LLP have expressed their willingness to remain in office as Auditor and, in
accordance with section 489 of the Companies Act 2006, a resolution that Saffery Champness LLP
be re-appointed will be proposed at the Annual General Meeting.
Requirements of the Listing Rules
The following table provides references to where the relevant information required by listing rule
9.8.4R is disclosed:
Listing Rule requirement
Details of long term incentive schemes as required by Listing
Rule 9.4.3R
see Directors’
Remuneration Report
Details of any arrangement under which a director of the
Company has waived emoluments from the Company
No such waivers
Details of any allotment for cash of equity securities made
during the period otherwise than to the holders of such equity
shares in proportion to their holdings of such equity shares
and which has not been specifically authorised by the
Company’s shareholders
Details of any contract of significance subsisting during the
period to which the Company, or one of its subsidiary
undertakings, is a party and in which a director of the
Company is or was materially interested.
Details of any contract of significance subsisting during the
period between
its subsidiary
the Company, one of
undertakings, and a controlling shareholder.
Details of contracts for the provision of services to the
Company or any of its subsidiary undertakings by the
controlling shareholder.
Details of any arrangement under which a shareholder has
to waive any dividends, where a
waived or agreed
shareholder has agreed to waive future dividends, details of
such waiver together with those relating to dividends which
are payable during the period under review.
Note 17 on page 52
No such contracts
No such contracts
No such contracts
No such waivers
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Aquila Services Group plc
Directors Report
Auditor Information
The Directors who held office at the date of approval of the Report of the Directors confirm that, so
far as they are each aware, there is no relevant audit information of which the Group’s Auditor is
unaware; and each Director has taken all the steps that he ought to have taken as a Director to
make himself aware of any relevant audit information and to establish that the Group’s Auditor is
aware of that information.
Susan Kane – Finance Director
By order of the Board
28 June 2017
14
Aquila Services Group plc
Corporate Governance Statement
The Corporate Governance Statement forms part of the Directors’ Report.
The Board is committed to maintaining appropriate standards of corporate governance. The
statement below, together with the report on directors’ remuneration on pages 18 to 23, explains
how the company has observed principles set out in The UK Corporate Governance Code (“the
Code”) as relevant to the company and contains the information required by section 7 of the UK
Listing Authority’s Disclosure Rules and Transparency Rules. For details of the code please refer to
https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-Corporate-Governance-
Code-2014.pdf
Given the current size and resources of the Group, the Company has decided not to apply the Code
provisions in full. A copy of the Company’s corporate governance practices is available on the
Company’s website www. aquilaservicesgroup.co.uk.
Board of Directors
The Board currently consists of three independent non-executive directors and three executive
directors. The Board determines that Jeffrey Zitron, Derek Joseph (after resigning his role as
Finance Director) and Richard Wollenberg to be independent Non-Executive Directors; its
assessment is based on the fact that Jeffrey Zitron, Derek Joseph and Richard Wollenberg do not
receive any additional benefits from the Group.
The Board meets regularly with senior staff throughout the year to discuss areas of operational
performance, trading outlook and growth opportunities. The Board met ten times during the year.
Internal financial control
Financial controls have been established so as to provide safeguards against unauthorised use or
disposition of the assets, to maintain proper accounting records and to provide reliable financial
information for internal use. Key financial controls include:
▪
the maintenance of proper records;
▪ a schedule of matters reserved for the approval of the Board; and
▪ evaluation, approval procedures and risk assessment for acquisitions.
The directors consider the size of the Group and the close involvement of executive directors in the
day-to-day operations makes the maintenance of an internal audit function unnecessary. The
directors will continue to monitor this situation.
15
Aquila Services Group plc
Corporate Governance Statement
Committees
The Group has three committees; Audit, Remuneration and Nominations with membership of:
Audit
Remuneration
Nominations
Committee
*
Committee
*
Committee
*
Jeffrey Zitron
Richard Wollenberg
Derek Joseph
Fiona Underwood
Steven Douglas
*Committee Chairman
Audit Committee
The audit committee, which is chaired by Richard Wollenberg, comprises all three of the
independent non-executive directors, and the Company Secretary. The Board is satisfied that
Richard Wollenberg has recent and relevant financial experience to guide the committee in its
deliberations.
The primary responsibilities of the Audit Committee are:
▪
▪
▪
to monitor the financial reporting for the annual and half-yearly reports, challenging where
necessary to ensure appropriate accounting standards have been met;
review the internal controls and risk management systems;
review the compliance, whistleblowing and fraud polices for the organisation;
▪ make recommendations to the Board and shareholders in relation to the appointment,
reappointment and removal of the external auditors; and
▪ meet regularly with the external auditor, review and approve the annual audit plan and review
the findings of the audit with the external auditor.
The committee will meet with the external auditor at least twice a year to consider the results,
internal procedures and controls, and matters raised by the auditor. The audit committee considers
auditor independence and objectivity and the effectiveness of the audit process. It also considers
the nature and extent of the non-audit services supplied by the auditor reviewing the ratio of audit to
non-audit fees. It is a specific responsibility of the audit committee to ensure that an appropriate
relationship is maintained between the company and its external auditor. The company has a policy
of controlling the provision of non-audit services by the external auditor in order that their objectivity
and independence are safeguarded. This control is exercised by ensuring non-audit projects where
fees are expected to exceed £5,000 are subject to the prior approval of the audit committee. At
least one of the members has relevant recent financial experience.
As part of the decision to recommend to the Board the re-appointment of the external auditor, the
committee takes into account the tenure of the auditor in addition to the results of its review of the
effectiveness of the external auditor and considers whether there should be a full tender process.
There are no contractual obligations restricting the committee’s choice of external auditor.
16
Aquila Services Group plc
Corporate Governance Statement
Nominations Committee
The primary responsibilities of the Nominations Committee are:
▪
regularly review the structure, size and composition (including the skills, knowledge,
experience and diversity) of the board;
▪ give full consideration to succession planning for directors and other senior executives;
▪ keep under review the leadership needs of the organisation, both executive and non-
executive;
▪
identifying and nominating, for the approval of the board, candidates to fill the board
vacancies as and when they arise;
▪ make recommendations to the Board and shareholders in relation to the appointment,
reappointment and removal of the external auditors; and
▪ evaluate the balance of skills, knowledge, experience and diversity on the board before any
appointment is made by the board, and, in the light of this, prepare a description of the role
and capabilities required for a particular appointment.
The Nominations Committee, in conjunction with Board meetings, met several times during this
period.
Remuneration Committee
The primary responsibilities of the Remuneration Committee are:
▪ setting the remuneration policy for executive and non-executive directors, including pension
and compensation payments. No-one can be involved in their own remuneration process;
▪
▪
recommending and monitoring the level and structure of senior management remuneration;
reviewing the ongoing relevance of remuneration policy;
▪ approving and determining targets for any performance-based pay schemes;
▪ ensuring contractual terms of termination are fair; and
▪ overseeing any major change in employee benefits.
The report of the Remuneration Committee is set out on pages 18 to 23 of this report.
Relations with shareholders
Presentations are given to institutional investors when requested, normally following the publication
of the half year and full year results, when interim and annual reports are delivered to all
shareholders. The results of such meetings are discussed with board members. All directors attend
the Annual General Meeting at which they have the opportunity to meet with shareholders.
17
Aquila Services Group plc
Directors’ Remuneration Report
The information provided on this page of the Directors’ Remuneration Report is not subject to Audit.
Remuneration Committee membership
Jeffrey Zitron
Richard Wollenberg
Derek Joseph
Chairman
Non-executive Director
Non-executive Director
Statement from the Chairman
I am pleased to present the Annual Report on Remuneration for the year ended 31 March 2017.
The Remuneration Committee has used the policy originally adopted in August 2015 and then
revised in July 2016 to specifically link to the performance of the Group as a framework to set
remuneration levels. Executive directors do not participate in decisions regarding their own
remuneration. The committee has access to independent advice but during the year under review
they have not sought such advice.
In setting the company’s remuneration policy for directors, the Remuneration Committee has given
full consideration to the best practice provisions annexed to The Financial Conduct Authority Listing
Rules and the report has been prepared in accordance with Chapter 6 of the Companies Act 2006
and the Directors’ Remuneration Report Regulations 2002.
The Remuneration Committee met on 25 May 2017 to discuss the remuneration for the directors of
the Group. The committee agreed that there would be no changes to directors’ remuneration and
that the remuneration policy would remain as revised in July 2016.
The remuneration policy is designed to attract and retain executive directors and to motivate them in
delivering the objectives of the Company. The policy also covers the senior management teams
within the subsidiaries who are key to supporting the delivery of those objectives. The underlying
principle is that employee and director share ownership is encouraged and the remuneration policy
provides opportunity to reward all employees through the award of share options. This links their
personal interest to the success of the company.
Jeffrey Zitron - Chairman of the Remuneration Committee
28 June 2017
18
Aquila Services Group plc
Directors’ Remuneration Report
The information provided on pages 19 to 21 of the Directors’ Remuneration Report is subject to
audit.
Annual Report on Remuneration
The remuneration of the executive directors is made up as follows:
Directors’ remuneration as a single figure (2017)
Salary All taxable
Annual
and fees
benefits
bonuses
LTIP Pension
Derek Joseph**
Steven Douglas
Fiona Underwood
Richard Murphy
Susan Kane
£
2,500
105,000
105,000
36,758
78,750
328,008
£
-
1,288
1,513
-
1,571
4,372
£
-
-
-
-
-
-
£
-
-
-
-
-
-
Directors’ remuneration as a single figure (2016)
£
-
6,000
6,000
-
-
Total
£
2,500
112,288
112,513
36,758
80,321
12,000
344,380
Salary All taxable
Annual
and fees
benefits
bonuses
LTIP Pension
Richard Wollenberg*
Derek Joseph**
Steven Douglas
Fiona Underwood
Richard Murphy
£
1,232
6,140
61,110
61,110
33,484
£
-
-
740
1,950
-
£
-
-
£
-
-
£
-
-
Total
£
1,232
6,140
20,000
20,000
-
27,200
27,200
-
7,700
3,666
116,750
113,926
-
33,484
163,076
2,690
40,000
54,400
11,366
271,532
The remuneration of the non-executive directors is made up as follows:
Directors’ remuneration as a single figure (2017)
Richard Wollenberg*
Jeffrey Zitron
Derek Joseph**
Salary All taxable
Annual
and fees
benefits
bonuses
LTIP Pension
£
4,482
7,500
3,000
14,982
£
-
-
-
-
£
-
-
-
-
£
-
-
-
-
£
-
-
-
-
Total
£
4,482
7,500
3,000
14,982
19
Aquila Services Group plc
Directors’ Remuneration Report
Directors’ remuneration as a single figure (2016)
Richard Wollenberg*
Jeffrey Zitron
Derek Joseph**
Salary All taxable
Annual
and fees
benefits
bonuses
LTIP Pension
£
2,389
7,500
388
10,277
£
-
-
-
-
£
-
-
-
-
£
-
-
-
-
£
-
-
-
-
Total
£
2,389
7,500
388
10,277
*Richard Wollenberg held an executive director role up until 19 August 2015.
**Derek Joseph held a non-executive director role up until 19 August 2015, the role of Finance Director from 19 August
2015 to 27 June 2016 then a non-executive role from 28 June 2016.
The taxable benefits above represent private medical insurance.
Executive Incentive Scheme
All the executive directors of the Group’s subsidiaries benefit from the executive incentive scheme
(“the scheme”). Where a subsidiary is acquired during the reporting period, the Remuneration
Committee (RemCo) confirms the eligibility or not of that subsidiary’s executive directors for
participation in the scheme for the remaining part of the year. For the year under review, the
executive directors of both Altair and Murja were eligible for the executive incentive scheme.
The scheme, which is discretionary, is dependent on the performance target for the year, as set out
in the remuneration policy. The scheme comprises two elements:
1. An unconsolidated bonus award of up to 30% of basic salary, and
2. A share option award of up to £100,000 (based on the mid-market share price on the date the
accounts are signed) which forms part of the long-term incentive plan (LTIP) of the scheme.
The target for those eligible executive directors, in-line with the 2016 revised policy, was to achieve
the Group’s 2016/17 outturn (reported profit before tax and exceptional items) plus 10%, adjusted
for any on-off costs and expenses.
2016/17 Award
RemCo assessed the performance of the Altair and Murja executive directors against the target and
the Committee’s decision is shown below.
Performance Target
Aquila 2016 profit
increased by 10%5
Actual Performance
Aquila 2016 profit
increased by 21.5%
Maximum Possible
award
2016/17
Unconsolidated
bonus award
£600,000
£600,000
£663,174
£30,000
£Nil
£663,174
£100,000 share options
Nil share options
The Committee believes that the reward payable is a fair reflection of the performance over the year.
5 Profit before tax and excluding one-off deemed cost of listing and share option charge
20
Aquila Services Group plc
Directors’ Remuneration Report
2015/16 Award
Share options, relating to the 2015/16 award, were awarded during the year to directors as follows:
Type of scheme
Face value £
Length of vesting period
Steven Douglas
Fiona Underwood
Susan Kane
EMI
EMI
EMI
46,000
46,000
46,000
3 years
3 years
3 years
There are no performance measures or targets in relation to the options granted. The face value of
the options has been calculated based on the share price at date of grant of 46p per share.
Statement of directors’ shareholding and share interest
The total number of directors’ interests in shares as at 31 March 2017 (or date of resignation) is set
out below:
Richard Wollenberg6
Jeffrey Zitron
Derek Joseph
Steven Douglas
Fiona Underwood
Richard Murphy
Susan Kane
Number of shares
3,808,406
2,798,403
2,870,403
3,279,440
3,279,440
376,344
3,279,440
(resigned 21 July 2016)
The total number of share options in relation to each director with and without performance
measures, those vested but unexercised, and those exercised, is set out below:
With
performance
measures
Without
performance
measures7
Vested but
unexercised8
Exercised
during the
year
Richard Wollenberg
Jeffrey Zitron
Derek Joseph
Steven Douglas
Fiona Underwood
Susan Kane
Payments to past directors
-
-
-
-
-
-
-
-
-
375,050
375,050
375,050
515,000
300,000
309,000
340,000
340,000
340,000
-
-
-
-
-
-
In the year ended 31 March 2017, there were no payments to past directors.
Payments for loss of office
No payments were made to directors for loss of office in the year ended 31 March 2017.
6 Includes shares held by immediate family members of Richard Wollenberg
7 Are part of a total of 1,713,772 Ordinary Shares at £0.05 per share which were issued as “Rollover Options” and are
exercisable in tranches from 1 April 2016 with expiry dates between 31 March 2023 and 31 March 2025
8 The Unapproved Options may be exercised at any time up to 20 July 2020
21
Aquila Services Group plc
Directors’ Remuneration Report
The information provided on pages 22 to 23 of the Directors’ Remuneration Report is not subject to
audit.
Performance graph
The following graph shows the company’s performance since flotation, measured by total
shareholder return, compared with the performance of the FTSE All Share Index also measured by
total shareholder return:
Data source: London Stock Exchange
Remuneration of Chief Executive Officers
Total
Remuneration
£
112,288
112,513
Annual
bonuses
£
-
-
Shares
receivable
£
-
-
Total
£
112,288
112,513
Steven Douglas
Fiona Underwood
Relative importance of spend on pay
Comparison of shareholder distributions and total employee expenditure of the Group is set out
below for the years ended 31 March 2016 and 31 March 2017.
All employee remuneration
Total dividend per share
Distributions to shareholders
2017
£
2016
Change %
£
2,702,039
2,407,049
0.74p
0.66p
241,617
212,778
12.25%
12.12%
13.56%
22
Aquila Services Group plc
Directors’ Remuneration Report
Statement of implementation of remuneration policy in the following year
The Remuneration Committee proposes to continue with the policy approved by the shareholders at
the 2016 Annual General Meeting.
Shareholder voting at the last general meeting
The Group is committed to on-going shareholder dialogue and takes an active interest in voting
outcomes. Where there are substantial votes against resolutions in relation to directors’
remuneration, the reasons for any such vote will be sought, and any actions in response will be
detailed here. The Directors’ Remuneration Report for the period ended 31 March 2016 and the
Directors Remuneration Policy were approved by shareholders at the Annual General Meeting held
on 21 July 2016.
Directors’ Remuneration Report
% of votes cast
For
Against
Total votes cast
100%
0%
100%
Directors’ Remuneration Policy
% of votes cast
For
Against
Total votes cast
Remuneration policy
100%
0%
100%
The remuneration policy was originally set in January 2015, confirmed by the committee in August
2015 and revised in July 2016; the Remuneration Committee has reviewed the policy and agreed
that it should remain unchanged.
The remuneration policy is designed to attract and retain executive directors and to motivate them in
delivering the objectives of the Group. The policy also covers the senior management teams within
the subsidiaries who are key to supporting the delivery of those objectives. The underlying principle
is that employee and director share ownership is encouraged and the remuneration policy provides
opportunity to reward all employees through the award of share options. This links their personal
interest to the success of the company.
Future policy table
The future policy remains as revised in July 2016 and has kept the basic principles of the policy that
was set in January 2015 and agreed by the Remuneration Committee in August 2015. The policy
accounts for the Group as a whole to ensure that executive directors are adequately rewarded for
their services and that there is a consistent approach to remuneration across the Group.
The Remuneration policy can be inspected on the Company’s website www.aquilaservicesgroup.co.uk.
Jeffrey Zitron – Chairman
28 June 2017
23
Aquila Services Group plc
Statement of Directors’ Responsibilities in respect of the Annual Report and the
Financial Statements
The Directors (whose names and functions are set out on page 11) are responsible for preparing this
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 prepared the Company and Group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union 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 company and the
group and the profit or loss of the company and the group for that period.
In preparing the Company and Group financial statements, the Directors are required to:
▪ select suitable accounting policies and then apply them consistently;
▪ make judgements and estimates that are reasonable and prudent;
▪ present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information;
▪ state whether IFRSs as adopted by the European Union have been followed, 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 and Group will continue in business; and
▪ provide additional disclosures when compliance with the specific requirements in IFRSs is
insufficient to enable users to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial performance.
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Company and Group’s transactions and disclose with reasonable accuracy at any
time the financial position of the Company and Group and enable them to ensure that the financial
statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement
that comply with that law and those regulations, and for ensuring that the Annual Report includes
information required by the Listing Rules of the Financial Conduct Authority.
The financial statements are published on the Company’s website www.aquilaservicesgroup.co.uk.
The work carried out by the Auditor does not involve consideration of the maintenance and integrity
of this website and accordingly, the Auditor accepts no responsibility for any changes that have
occurred to the financial statements since they were initially presented on the website. Visitors to
the website need to be aware that legislation in the United Kingdom covering the preparation and
dissemination of the financial statements may differ from legislation in their jurisdiction.
24
Aquila Services Group plc
Statement of Directors’ Responsibilities in respect of the Annual Report and the
Financial Statements
We confirm that to the best of our knowledge:
▪
▪
the Company and Group financial statements, prepared in accordance with IFRS as adopted
by the European Union, give a true and fair view of the assets, liabilities, financial position
and profit of the Company and Group; and
these strategic and directors’ reports include a fair review of the development and
performance of the business and the position of the Company and Group together with a
description of the principal risks and uncertainties that it faces.
Susan Kane – Finance Director
On behalf of the Board
28 June 2017
25
Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
We have audited the financial statements of Aquila Services Group plc for the year ended 31 March
2017 set out on pages 28 to 56. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
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 Directors’ Responsibilities Statement, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the group’s and the parent company's circumstances and
have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the annual report to identify
material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by
us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
▪
▪
▪
▪
the financial statements give a true and fair view of the state of affairs of the group and the
parent company as at 31 March 2017 and of the group’s profit for the year then ended; and
the group financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union, the requirements of the Companies Act 2016 and, as
regards the group financial statements, Article 4 of the IAS Regulation; and
the parent company financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union and as applied in accordance with the provisions
of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
26
Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
Other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
▪
▪
the information given in the Strategic Report and the Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
the Strategic Report and the Directors Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the
course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
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 and the part of the directors’ remuneration report to
be audited 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.
(Senior Statutory Auditor)
Jamie Cassell
For and on behalf of
Saffery Champness LLP
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
28 June 2017
27
Aquila Services Group plc
Consolidated statement of comprehensive income
For the year ended 31 March 2017
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Deemed cost of listing
Finance income
Profit / (loss) before taxation
Income tax expense
Notes
4
5
5
13
4
6
8
2017
£
2016
£
5,928,201
4,746,144
(4,453,466)
(3,458,532)
1,474,735
1,287,612
(964,692)
(997,786)
510,043
289,826
-
5,512
(3,104,527)
1,713
515,555
(2,812,988)
(111,345)
(124,319)
Profit / (loss) for the year
404,210
(2,937,307)
Other comprehensive income
Total comprehensive income profit / (loss)
for the year
-
-
404,210
(2,937,307)
Earnings profit / (loss) per share
attributable to owners of the parent
Basic
Diluted
Adjusted earnings per share before
deemed cost of listing
Basic
Diluted
9
9
9
9
1.24p
1.08p
1.24p
1.08p
(10.66p)
(10.66p)
0.61p
0.54p
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 34 to 56 form part of these financial statements.
28
Aquila Services Group plc
Consolidated and Company statements of financial position
As at 31 March 2017
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Current assets
Trade and other receivables
Deferred tax assets
Cash and bank balances
Current liabilities
Trade and other payables
Corporation tax
Note
10
11
12
14
15
16
Group
2017
£
317,688
50,559
-
368,247
1,350,187
-
2,312,600
3,662,787
951,923
134,753
1,086,676
Group
2016
£
Company
2017
£
Company
2016
£
317,688
14,654
-
332,342
-
-
-
9,749,931
9,749,931
-
9,602,280
9,602,280
1,158,836
11,671
2,552,642
3,723,149
1,276,501
166,769
1,443,270
47
-
348,062
348,109
217,380
-
217,380
1,770
-
341,849
343,619
218,530
-
218,530
Net current assets
2,576,111
2,279,879
130,729
125,089
Net assets
2,944,358
2,612,221
9,880,660
9,727,369
Equity
Share capital
Share premium account
Reverse acquisition reserve
Merger reserve
Share-based payment reserve
Retained (losses) / earnings
Equity attributable to the
owners of the parent
17
18
18
18
20
1,632,550
533,235
(4,771,47
3)
7,184,334
422,391
(2,056,67
9)
1,630,434
533,235
1,632,550
533,235
1,630,434
533,235
(4,771,473)
-
-
7,184,334
7,184,334
7,184,334
281,586
(2,245,895)
422,391
108,150
281,586
97,780
2,944,358
2,612,221
9,880,660
9,727,369
The notes on pages 34 to 56 form part of these financial statements.
As permitted by S408 Companies Act 2006, the company has not presented its own profit and loss
account and related notes. The company’s profit for the year was £225,364 (2016: £200,724).
The financial statements were approved by the board on 28 June 2017
Susan Kane – Finance Director
Company Registration No. 08988813
29
Aquila Services Group plc
Consolidated statement of changes in equity
For the year ended 31 March 2017
Balance at 1 April 2015
Issue of shares
Reverse acquisition
Total comprehensive income
Transfer on exercise of options
Share based payment charge
Dividend
Share
capital
£
515,000
1,115,434
-
-
-
-
-
Share
premium
account
£
464,960
68,275
-
-
-
-
-
Reverse
acquisition
reserve
£
(857,429)
-
(3,914,044)
-
-
-
-
Merger
reserve
£
Share based
Payment
Reserve
£
Retained
earnings /
(losses)
£
-
7,184,334
-
-
-
-
-
17,016
-
11,923
-
(1,960)
254,607
-
758,752
-
-
(2,937,307)
1,960
-
(69,300)
Total
equity
£
898,299
8,368,043
(3,902,121)
(2,937,307)
-
254,607
(69,300)
Balance at 31 March 2016
1,630,434
533,235
(4,771,473)
7,184,334
281,586
(2,245,895)
2,612,221
Balance at 1 April 2016
Issue of shares
Total comprehensive income
Transfer on exercise of options
Share based payment charge
Dividend
1,630,434
2,116
-
-
-
-
533,235
-
-
-
-
-
(4,771,473)
-
-
-
-
-
7,184,334
-
-
-
-
-
281,586
-
-
(6,846)
147,651
-
(2,245,895)
-
404,210
6,846
-
(221,840)
2,612,221
2,116
404,210
-
147,651
(221,840)
Balance at 31 March 2017
1,632,550
533,235
(4,771,473)
7,184,334
422,391
(2,056,679)
2,944,358
30
Aquila Services Group plc
Company statement of changes in equity
For the year ended 31 March 2017
Balance at 1 April 2015
Issue of shares
Total comprehensive income
Transfer on exercise of options
Share based payment charge
Dividend
Share
capital
£
Share
premium
account
£
Merger
reserve
£
Share based
payment
reserve
£
Retained
earnings /
(losses)
£
515,000
1,115,434
464,960
68,275
-
7,184,334
-
-
-
-
-
-
-
-
-
-
-
-
17,016
-
-
(1,960)
266,530
-
(35,604)
-
200,724
1,960
-
(69,300)
Total
equity
£
961,372
8,367,043
200,724
-
266,530
(69,300)
Balance at 31 March 2016
1,630,434
533,235
7,184,334
281,586
97,780
9,727,369
Balance at 1 April 2016
Issue of shares
Total comprehensive income
Transfer on exercise of options
Share based payment charge
Dividend
1,630,434
2,116
533,235
-
7,184,334
-
-
-
-
-
-
-
-
-
-
-
-
-
281,586
-
-
(6,846)
147,651
-
97,780
-
225,364
6,846
-
(221,840)
9,727,369
2,116
225,364
-
147,651
(221,840)
Balance at 31 March 2017
1,632,550
533,235
7,184,334
422,391
108,150
9,880,660
31
Aquila Services Group plc
Consolidated statement of cash flow
For the year ended 31 March 2017
Cash flows from operating activities
Profit / (loss) for the year
Interest received
Income tax expense
Share based payment charge
Deemed cost of listing
Depreciation
Operating cash flows before movement in working capital
Increase in trade and other receivables
(Decrease) / increase in trade and other payables
Cash generated by operations
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Interest received
Cash acquired on reverse acquisition
Cash acquired on purchase of subsidiary
Purchase of subsidiary
Purchase of property, plant and equipment
Proceeds from disposal of investments
Net cash (outflow) / inflow from investing activities
Cash flows from financing activities
Proceeds of share issue
Dividends paid
Net cash (outflow) / inflow from financing activities
2017
£
404,210
(5,512)
111,345
147,651
-
11,694
669,388
(191,351)
(324,578)
153,459
(131,690)
21,769
5,512
-
-
-
(47,599)
-
(42,087)
2,116
(221,840)
(219,724)
2016
£
(2,937,307)
(1,713)
124,319
254,606
3,104,527
5,457
549,889
(76,254)
99,878
573,513
(179,445)
394,068
1,713
795,690
785,262
(899,696)
(16,344)
207,834
874,459
239,456
(69,300)
170,156
Net (decrease)/increase in cash and cash equivalents
(240,042)
1,438,683
Cash and cash equivalents at beginning of the year
2,552,642
1,113,959
Cash and cash equivalents at end of the year
2,312,600
2,552,642
32
Aquila Services Group plc
Company statement of cash flow
For the year ended 31 March 2017
Cash flows from operating activities
Profit for the year
Dividends received
Interest received
2017
£
225,364
(325,650)
(1,024)
2016
£
200,723
(300,600)
(1,017)
Operating cash flows before movement in working capital
(101,310)
(100,894)
Decrease in trade and other receivables
(Decrease) / increase in trade and other payables
Net cash (outflow) / inflow from operating activities
Cash flows from investing activities
Interest received
Dividends received
Purchase of subsidiary
Net cash inflow / (outflow) from investing activities
Cash flows from financing activities
Proceeds of share issue
Dividends paid
Net cash (outflow) / inflow from financing activities
1,723
(1,150)
(100,737)
1,024
325,650
-
326,674
2,116
(221,840)
(219,724)
16,230
215,696
131,032
1,017
300,600
(1,053,782)
(752,165)
86,075
(69,300)
16,775
Net increase/(decrease) in cash and cash equivalents
6,213
(604,358)
Cash and cash equivalents at beginning of the year
341,849
946,207
Cash and cash equivalents at end of the year
348,062
341,849
33
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
1
General information
Aquila Services Group plc (‘‘the Company’’) and its subsidiaries (together, ‘‘the Group’’)
provide specialist housing and treasury management consultancy services. The principal
activity of the Company is that of a holding company for the Group as well as providing all the
strategic and governance functions of the Group.
The Company is a public limited company which is listed on the London Stock Exchange,
domiciled in the United Kingdom and incorporated and registered in England and Wales. The
Company’s registered office is Tempus Wharf, 29a Bermondsey Wall West, London, SE16
4SA.
2
Accounting policies
The principal accounting policies applied in preparation of these consolidated financial
statements are set out below. These policies have been consistently applied unless otherwise
stated.
Basis of preparation
The financial statements of have been prepared in accordance with International Reporting
Standards as adopted by the European Union (IFRSs), issued by the International Accounting
Standards Board (IASB), including interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC), and the Companies Act 2006 applicable to
companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis.
The financial statements are presented in Pounds Sterling which is the Group’s functional and
presentational currency.
The preparation of the financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. The areas of critical accounting
estimates and judgements are set out in note 3.
Basis of consolidation
On 20 August 2015, the Company became the legal parent of Altair Consultancy and Advisory
Services Limited (‘‘Altair’’) through a reverse acquisition. In the judgement of the Directors, the
Company was not a business as defined by IFRS 3 prior to the transaction. As such, the
transaction is not considered to be a business combination and therefore is deemed to be
outside the scope of IFRS 3, instead falling within the scope of IFRS 2.
The principles of IFRS 3 have been applied in identifying Altair as the accounting acquirer.
The consolidated financial statements of the Company are presented as a continuation of
Altair’s financial statements, reflecting the commercial substance of the transaction. However,
the equity structure presented in the consolidated financial statements reflects the equity
structure of the Company, including the equity instruments issued as part of the transaction.
34
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of subsidiary
entities. A subsidiary is defined as an entity over which the Company has control. Control is
achieved when the Company has power over an entity, is exposed to, or has rights to, variable
returns from its involvement with the entity, and has the ability to use its power to affects its
returns.
Consolidation of a subsidiary begins when the Company obtains control and ceases when
control is lost. The Company reassesses whether or not it controls an entity if facts and
circumstances indicate that there are changes to one or more of the three control elements
listed above.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated on consolidation.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring
accounting policies used into line with the Group’s accounting policies.
Business combinations
Other than the reverse acquisition noted above, acquisitions of subsidiaries are accounted for
using the acquisition method. The consideration transferred in a business combination is
measured at fair value, which is calculated as the sum of the acquisition-date fair values of
assets transferred by the Group, liabilities incurred by the Group to the former owners of the
acquiree and the equity interest issued by the Group in exchange for control of the acquiree.
Any excess of the consideration over the fair value of the identifiable assets and liabilities
acquired is recognised as goodwill. Goodwill is not amortised but is reviewed for impairment
at least annually. If the consideration is less than the fair value of the identifiable assets and
liabilities acquired, the difference is recognised in the Statement of comprehensive income.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the rendering
of services in the ordinary course of the Group’s activity. Revenue is shown net of value
added tax, returns, rebates and discounts. The Group recognises revenue when the amount
of the revenue can be reliably measured and when it is probable that economic benefits will
flow to the entity.
Un-invoiced fees at the balance sheet date are valued at the fair value of the consideration
receivable when it is probable that economic benefits will flow to the Group. Where income is
invoiced in advanced of work being completed, revenue is treated in the first instance as
deferred income and recognised when the services are performed by the Group.
35
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss. The cost of an item of property, plant and equipment initially
recognised includes its purchase price and any cost that is directly attributable to bringing the
asset to the location and condition necessary for use. Depreciation is recognised so as to
write-off the cost of assets less their residual values over their estimated useful lives, using the
straight-line method, on the following bases:
Computer equipment
33% per annum
Fixtures and fittings
33% per annum
The estimated useful lives, residual values and depreciation method are reviewed at the end
of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. The gain or loss
arising on the disposal of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the Statement of comprehensive
income.
Investment in subsidiaries
In the company’s separate annual financial statements, investments in subsidiaries are carried
at cost less any accumulated impairment.
The cost of an investment in a subsidiary is the aggregate of the fair value, at the date of
exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by
the company, plus any costs directly attributable to the purchase of the subsidiary.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the
Group becomes a party to the contractual provisions of the instrument.
Financial assets can be divided into the following categories: loans and receivables, financial
assets at fair value through profit or loss, available-for-sale financial assets and held-to-
maturity investments. Financial assets are assigned to the different categories by
management on initial recognition, depending on the purpose for which the instruments were
acquired. The designation of financial assets is re-evaluated at every reporting date at which
a choice of classification or accounting treatment is available.
De-recognition of financial instruments occurs when the rights to receive cash flows from
investments expire or are transferred and substantially all of the risks and rewards of
ownership have been transferred. An assessment for impairment is undertaken at least at
each balance sheet date whether or not there is objective evidence that a financial asset or a
group of financial assets is impaired.
36
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Trade receivables
Trade receivables are measured at initial recognition at fair value plus, if appropriate, directly
attributable transaction costs and are subsequently measured at amortised cost using the
effective interest method. Appropriate allowances for estimated irrecoverable amounts are
recognised in the income statement when there is objective evidence that the asset is
impaired. The allowance recognised is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at an
effective interest rate computed at initial recognition.
Loans receivable
Loans receivable are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They arise when the Group or Company provides money
directly to a debtor with no intention of trading the receivables. Loans receivable are
measured at initial recognition at fair value plus, if appropriate, directly attributable transaction
costs and are subsequently measured at amortised cost using the effective interest method,
less provision for impairment. Any change in their value is recognised in the income
statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits that are readily
convertible to a known amount of cash and are subject to an insignificant risk of change in
value.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument. A financial liability is a contractual obligation to either deliver
cash or another financial asset to another entity or to exchange a financial asset or financial
liability with another entity, including obligations which may be settled by the Group using its
equity instruments. An equity instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities. The accounting policies adopted for
specific financial liabilities and equity instruments are set out below.
Financial liabilities
At initial recognition, financial liabilities are measured at their fair value plus, if appropriate, any
transaction costs that are directly attributable to the issue of the financial liability. After initial
recognition, all financial liabilities are measured at amortised cost using the effective interest
method.
Pensions
The Group contributes to defined contribution schemes for the benefit of its directors and
employees. Contributions payable are charged to the statement of comprehensive income in
the year they are payable.
37
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Current and deferred income tax
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net
profit as reported in the profit or loss, because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amount of assets and liabilities in the financial information and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled. Deferred tax is charged or credited in the profit or
loss, except when it relates to items credited or charged in other comprehensive income
directly to equity, in which case the deferred tax is also dealt with in other comprehensive
income.
Deferred tax assets
Management regularly assesses the likelihood that deferred tax assets will be recovered from
future taxable income. No deferred tax asset is recognised when management believe that it
is more likely than not that a deferred asset will not be realised.
Impairment of assets
The Group assesses at each statement of financial position date if there is any indication that
an asset may be impaired. If any such indication exists, the Group estimates the recoverable
amount of the asset.
If there is any indication that an asset may be impaired, the recoverable amount is estimated
for the individual asset. If it is not possible to estimate the recoverable amount of the individual
asset, the recoverable amount of the cash-generating unit to which the asset belongs is
determined.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less
costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount of
the asset is reduced to its recoverable amount. That reduction is an impairment loss.
38
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Impairment of assets (continued)
An impairment loss of assets carried at cost less any accumulated depreciation or amortisation
is recognised immediately in profit or loss.
An entity assesses at each reporting date whether there is any indication that an impairment
loss recognised in prior periods for assets other than goodwill may no longer exist or may have
decreased. If any such indication exists, the recoverable amounts of those assets are
estimated.
The increased carrying amount of an asset other than goodwill attributable to a reversal of an
impairment loss does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated depreciation or
amortisation other than goodwill is recognised immediately in profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate of the amount can be made. If the effect is material,
provisions are determined by discounting the expected future cash flows at an appropriate pre-
tax discount rate.
Operating leases
Rentals payable under operating leases, net of lease incentives, are charged to the statement
of comprehensive income on a straight-line basis over the term of the lease.
Share capital / equity instruments
Ordinary shares are classified as equity. Equity instruments issued by the Company are
recorded at the proceeds received, net of direct issue costs. The Company has one class
Ordinary share which carries no right to fixed income. Each share carries the right to one vote
at general meetings of the Company.
Share based payments
The Group has issued share options to certain directors and employees. The share options
granted become exercisable at varying future dates. If certain conditions are met, following
the vesting period, the employee will be eligible to exercise their option at an exercise price
determined on the date the share options are granted.
The share based payment charge is recognised in the statement of comprehensive income
and is calculated based on the Company’s estimate of the number of share options that will
eventually vest.
The fair value of share options granted is determined by applying the Black Scholes model.
This model utilises inputs for the risk-free rate, expected volatility in share price, dividend yield
and the current share price at fair value, which are factors determined on the date the share
options are granted.
39
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
2
Accounting policies (continued)
Adoption of new and revised standards
The following pronouncements have been adopted in the year and either had no impact on the
financial statements or resulted in changes to presentation and disclosure only:
▪ Annual Improvements 2012-2014 *
▪
▪
▪
▪
▪
▪
IFRS 11 (amendments) Accounting for acquisitions of interests in joint operations *
IFRS 14 Regulatory Deferral accounts *
IAS 16 Property, Plant & Equipment and IAS 38 - Intangible assets (amendments) *
IAS 27 (amendments) Equity Method in Separate Financial Statements *
IAS 16 Property, Plant & Equipment and IAS 41 - Bearer Plants (amendments) *
IAS 1 Disclosure initiative *
*Effective for annual periods beginning on or after 1 January 2016
Standards issued but not yet effective
At the date of authorisation of these financial statements, the following Standards and
Interpretations relevant to the Group, which have not been applied in these financial
statements, were in issue but were not yet effective. In some cases these standards and
guidance have not been endorsed by the European Union.
▪
▪
▪
▪
▪
▪
▪
IAS 7 (amendments) Statement of cashflows disclosure *
IAS 12 (amendments) Income taxes on Recognition of deferred tax losses for unrealised
losses *
IFRS 2 (amendments) Share based payments **
IFRS 9 Financial Instruments **
IFRS 15 (amendments) Revenue from contracts with customers **
IFRS 16 Leases ***
IFRS 4 (amendments) ‘Insurance contracts’ regarding the implementation of IFRS 9
‘Financial Instruments’ **
▪
IFRIC 22 Foreign currency transactions and advance consideration **
▪ Annual Improvements 2014-2016 Cycles *
*Effective for annual periods beginning on or after 1 January 2017
**Effective for annual periods beginning on or after 1 January 2018
***Effective for annual periods beginning on or after 1 January 2019
The directors are evaluating the impact that these standards will have on the financial
statements of the Group.
40
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
3
Critical accounting estimates and judgements
In application of the Group’s accounting policies, which are described in note 2, the directors
are required to make judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations, that the
directors have made in the process of applying the Group’s accounting policies and that have
a significant effect on the amounts recognised in the financial statements.
Revenue recognition
Work in progress is calculated on a project by project basis using the fair value of chargeable
time that is un-invoiced at the period end. Historic analysis shows that recovery rates of work
in progress are very high; the Group does not expect any work in progress to be irrecoverable.
Work in progress is reviewed on a monthly basis to ensure it is recognised appropriately, it is
probable that economic benefits will flow to the Group and that the fair value can be reliably
measured.
Share based payments
The Company has granted share options to certain employees and directors of the Group.
The share options granted become exercisable at varying future dates. If certain conditions
are met, following the vesting period, the employee will be eligible to exercise their option at an
exercise price determined on the date the share options are granted.
The share based payment charge is recognised in the statement of comprehensive income
and is calculated based on the Company’s estimate of the number of share options that will
eventually vest.
Assumptions regarding the fair value of the Company’s shares and assumptions regarding
employee fluctuation are taken into account when measuring the value of share-based
payments for employees, which are required to be accounted for as equity-settled share-
based payment transactions pursuant to IFRS 2. The resulting staff costs are recognised pro
rata in the statement of comprehensive income to reflect the services rendered as
consideration during the vesting period.
41
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
3
Critical accounting estimates and judgements (continued)
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at
the balance sheet date, that may have a significant risk of causing material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are discussed below.
Impairment of goodwill
The carrying amounts of the Group’s assets value are reviewed at each balance sheet date to
determine whether there is any indication of impairment. If any such indication exists, the
asset's recoverable amount is estimated and an impairment loss is recognised where the
recoverable amount is less than the carrying value of the asset. Any impairment losses are
recognised in the income statement.
4
Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations - rendering of services
Specialist housing consultancy income
Treasury management consultancy income
2017
£
5,456,328
471,873
5,928,201
2016
£
4,628,195
117,949
4,746,144
Interest revenue on bank deposits
5,512
1,713
5,933,713
4,747,857
5
Operating segments
The Group has three reportable segments, being consultancy, interim management and
treasury management services, the results of which are included within the financial
information. IFRS 8 requires operating segments to be identified on the basis of internal
reports that are regularly reviewed by the Chief Operating Decision Maker (“CODM”). In
accordance with IFRS 8 ‘Operating Segments’, information on segment assets is not shown,
as this is not provided to the CODM. The Group’s revenues are mainly derived from
operations in the UK and ROI. As a result, the CODM does not review segments by country or
continent.
The principal activities of the Group are as follows:
Consultancy – a range of services to support the business needs of a diverse range of
organisations (including housing associations and local authority) across the housing sector.
The majority of consultancy projects run over one to two months requiring on-going business
development to ensure a full pipeline of consultancy work for the employed team.
42
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
5
Operating segments (continued)
Interim Management – individuals are embedded within housing organisations (normally
registered providers, local authorities and ALMOs) in a substantive role, normally for a
specified period of time. Interim management provides the Group with a more extended
forward sales pipeline as the average contract is for six months. This section of the business
provides low risk as the interim consultants are placed on rolling contractual basis and
provides minimal financial commitment as associates to the business, rather than employees,
are used for these roles.
Treasury Management – a range of services providing treasury advice and fund-raising
services to non-profit making organisations working in the affordable housing and education
sectors. Within this segment of the business a number of client organisations enter into fixed
period retainers to ensure immediate call-off of the required services.
The accounting policies of the reportable segments are the same as the Group’s accounting
policies described in note 2. Segment profit represents the profit earned by each segment,
without allocation of central administration costs, including Directors’ salaries, finance costs
and income tax expense. This is the measure reported to the Group’s Chief Executive for the
purpose of resource allocation and assessment of segment performance.
Revenue from Consultancy
Revenue from Interim management
Revenue from Treasury management
Cost of sales from Consultancy
Cost of sales from Interim management
Cost of sales from Treasury management
Gross profit from Consultancy
Gross profit from Interim management
Gross profit from Treasury management
2017
£
3,712,790
1,743,538
471,873
5,928,201
2,627,985
1,483,353
342,128
4,453,466
1,084,805
260,185
129,745
1,474,735
2016
£
2,974,901
1,653,294
117,949
4,746,144
2,045,190
1,413,342
-
3,458,532
929,711
239,952
117,949
1,287,612
Administrative expenses
(964,692)
(997,786)
Operating profit
510,043
289,826
43
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
6
Profit / (loss) before tax
Profit / (loss) before taxation is arrived at after charging:
Deemed cost of listing
Auditors’ remuneration
Other fees payable to auditors:
- Taxation
- Corporate finance services
Depreciation of property, plant and equipment
Staff costs (see note 7)
Operating lease costs – land and buildings
2017
£
-
37,200
-
-
11,694
2,702,039
49,605
2016
£
3,104,527
36,000
12,000
25,000
5,457
2,407,049
39,400
The share option charge for the year of £147,651 (2016: £254,607) is included within
administrative expenses.
7
Staff costs
The average monthly number of employees (including
directors) employed by the Group was:
Aggregate remuneration (including directors)
Wages and salaries
Share-based payments
Pension contributions
Social security costs
Directors’ remuneration
Salary (including taxable benefits)
Share-based payments
Pension contributions
2017
37
2017
£
2,322,383
147,651
88,565
257,513
2,816,112
347,362
65,500
12,000
424,862
2016
30
2016
£
1,878,993
254,607
80,770
192,679
2,407,049
270,443
110,526
11,366
392,335
The amounts set out above include remuneration to the highest paid director as follows:
Salary (including taxable benefits)
Share-based payments
Pension contributions
106,513
22,866
6,000
135,379
109,050
55,263
7,700
172,013
44
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
8
Taxation
Corporation tax:
Current year
Adjustment in respect of prior years
Deferred tax charge
2017
£
117,738
(18,064)
99,674
11,671
111,345
2016
£
116,918
-
116,918
7,401
124,319
The tax charge for the year can be reconciled to the profit/(loss) in the income statement as
follows:
2017
£
2016
£
Profit/(loss) before taxation
515,555
(2,812,988)
Tax at the UK corporation tax rate of 20% (2016: 20%)
103,111
(562,598)
Expenses not deductible
Adjustment in respect of prior years
Deemed cost of listing
26,298
(18,064)
-
8,234
66,012
-
620,905
686,917
Tax expense for the year
111,345
124,319
45
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
9
Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) after tax attributable to the
equity holders of the Group by the weighted average number of shares in issue during the
year. Diluted earnings per share is calculated by adjusting the weighted average number of
shares outstanding to assume conversion of all potential dilutive shares, namely share
options.
Profit / (loss) after tax attributable to owners of the parent
Weighted average number of shares
- Basic
- Diluted
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Adjusted earnings per share before deemed cost of
listing
Profit / (loss) after tax attributable to owners of the parent
Deemed cost of listing
Adjusted earnings
Weighted average number of shares
- Basic
- Diluted
Adjusted basic earnings per share
Adjusted diluted earnings per share
2017
£
404,210
32,633,381
37,301,635
1.24p
1.08p
404,210
-
404,210
32,633,381
37,301,635
1.24p
1.08p
2016
£
(2,937,307)
27,566,749
27,566,749
(10.66p)
(10.66p)
(2,937,307)
3,104,527
167,220
27,566,749
30,918,874
0.61p
0.54p
Potential Ordinary shares are antidilutive when their conversion to Ordinary shares would
increase earnings per share or decrease loss per share from continuing operations.
46
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
10
Intangible assets
Group
Cost
At 1 April 2015
Additions
At 31 March 2016
Additions
At 31 March 2017
Accumulated impairment losses
At 1 April 2015 and 31 March 2016
Impairment losses for the year
At 31 March 2017
Net book value
At 31 March 2015
At 31 March 2016
At 31 March 2017
Goodwill
£
-
317,688
317,688
-
317,688
-
-
-
-
317,688
317,688
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating
units that are expected to benefit from that business combination.
The Group tests goodwill annually for impairment, or more frequently if there are any
indications that goodwill might be impaired.
The recoverable amount of goodwill is determined from value in use calculations. The key
assumptions for the value in use calculations are those regarding growth rate of client base
and project fees. Management’s approach to determining the values to each key assumption
is based on past experience and project work already secured for future periods.
Management have projected cash flows over a period of 5 years, based on a minimum
average growth rate of 10% per annum. Projected cash flows have been discounted at a rate
of 5%.
47
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
11 Property, plant and equipment
Group
Cost
At 1 April 2015
Additions
At 31 March 2016
Additions
At 31 March 2017
Accumulated depreciation
At 1 April 2015
Charge for the year
At 31 March 2016
Charge for the year
At 31 March 2017
Net book value
At 31 March 2015
At 31 March 2016
At 31 March 2017
Fixtures
and fittings
£
Computer
equipment
£
-
-
-
34,339
34,339
-
-
-
953
953
-
-
33,386
-
20,111
20,111
13,260
33,371
-
5,457
5,457
10,741
16,198
-
14,654
17,173
Total
£
-
20,111
20,111
47,599
67,710
-
5,457
5,457
11,694
17,151
-
14,654
50,559
48
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
12
Investment
Company
Cost
At 1 April 2015
Additions
At 31 March 2016
Additions
At 31 March 2017
Accumulated impairment losses
At 1 April 2015 and 31 March 2016
Impairment losses for the year
At 31 March 2017
Net book value
At 31 March 2015
At 31 March 2016
At 31 March 2017
Investments
in subsidiaries
£
-
9,602,280
9,602,280
147,651
9,749,931
-
-
-
-
9,602,280
9,749,931
The addition of £147,651 represents capital contributions made to the Company’s subsidiaries
in respect of the share option expense recognised in those subsidiaries on share options
issued by the Company.
Details of the Company’s subsidiaries at 31 March 2017 are as follows:
Place of
incorporation and
operation
Altair Consultancy and
Advisory Services Limited
England and Wales
Murja Limited
England and Wales
Proportion of
ownership and
voting rights held
100%
100%
Principal activity
Specialist housing
consultancy
Treasury
management
consultancy
The accounting reference date of each of the subsidiaries is co-terminus with that of the
Company. The registered office of each subsidiary is Tempus Wharf, 29a Bermondsey Wall
West, London, SE16 4SA.
49
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
13 Business combinations
On 20 August 2015, General Industries plc (now Aquila Services Group plc) became the legal
parent of Altair Consultancy and Advisory Services Limited by way of reverse acquisition. The
cost of the acquisition is deemed to have been incurred by Altair Consultancy and Advisory
Services Limited, the legal subsidiary, in the form of equity instruments issued to the owners of
the legal parent. The deemed cost of listing arising on the reverse acquisition was
£3,104,527.
On 12 December 2015, the Group acquired 100% of the issued share capital of Murja Limited,
thereby obtaining control. The principal activity of Murja Limited is that of treasury
management services. Murja Limited was acquired so as to broaden the range of services the
Group can offer.
14 Trade and other receivables
Group
2017
£
Group
2016
£
Company
2017
£
Company
2016
£
Trade receivables
Other receivables
Prepayments and accrued
income
1,153,940
11,055
995,660
17,081
185,192
1,350,187
146,095
1,158,836
-
47
-
47
-
1,770
-
1,770
The directors consider that the carrying amount of trade receivables approximates to their fair
value. Trade and other receivables are not considered impaired.
The aged profile of trade receivables not impaired is as follows:
Total
£
1,153,940
995,660
<30 days
£
774,753
687,310
30-60 days
£
299,432
236,379
66-90 days
£
30,933
50,149
>90 days
£
48,822
21,822
31 March 2017
31 March 2016
50
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
15 Deferred tax assets
The following are the Group’s major deferred tax assets recognised and the movements
thereon during the current and prior reporting period.
At 31 March 2015
Charge to profit or loss
At 31 March 2016
Charge to profit or loss
Decelerated capital
allowances
£
3,045
(1,741)
Other timing
differences
£
16,027
(5,660)
Total
£
19,072
(7,401)
1,304
(1,304)
10,367
(10,367)
11,671
(11,671)
At 31 March 2017
-
-
-
Deferred tax assets are recognised to the extent that it is probable that the future tax profits
will allow the deferred tax assets to be recovered.
16 Trade and other payables
Trade payables
Other payables
Amounts owed to Group
undertakings
Taxes and social security costs
Accruals and deferred income
Group
2017
£
274,420
27,668
-
341,020
308,815
951,923
Group
2016
£
Company
2017
£
Company
2016
£
220,307
61,067
-
354,117
641,010
1,276,501
140
-
183,865
-
33,375
217,380
19,621
-
183,409
-
15,500
218,530
The directors consider that the carrying amount of trade payables approximates to their fair
value.
51
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
17 Share capital
2017
£
2016
£
Allotted, called up and fully paid
32,651,003 (2016: 32,608,688) Ordinary shares of 5p each
1,632,550
1,630,434
The Company has one class Ordinary share which carries no right to fixed income. Each
share carries the right to one vote at general meetings of the Company.
A reconciliation of share capital, share premium account and merger reserve is set out below:
Number of
Ordinary
shares
10,300,000
Amount
called up and
fully paid
£
515,000
Share
premium
£
464,960
Merger
reserve
£
-
21,200,000
1,060,000
- 6,890,000
120,000
6,000
632,688
31,634
-
-
49,800
244,534
150,000
7,500
57,975
-
206,000
32,608,688
10,300
1,630,434
10,300
-
533,235 7,184,334
42,315
32,651,003
2,116
1,632,550
-
-
533,235 7,184,334
At 1 April 2015
Issued at 37.5p per share on
19 August 2015 to acquire Altair
Issued at 46.5p per share on
15 December 2015 to acquire
Murja
Issued at 43.65p per share on
11 March 2016 to acquire Murja
Issued at 43.65p per share on
11 March 2016
Issued at 10p per share on
11 March 2016 upon exercise of
options
At 31 March 2016
Issued at 5p per share on
31 August 2016 upon exercise
of options
At 31 March 2017
18 Reserves
The share premium account represents the amount received on the issue of Ordinary shares
by the Company in excess of their nominal value and is non-distributable.
The merger relief reserve arose on the Company’s acquisition of Altair and Murja. There is no
legal share premium on the shares issued as consideration as section 612 of the Companies
Act 2006, which deals with merger relief, applies in respect of the acquisition.
The reverse acquisition reserve arises due to the elimination of the Company’s investment in
Altair. Since the shareholders of Altair became the majority shareholders of the enlarged
group, the acquisition is accounted for as though the legal acquiree is the accounting acquirer.
52
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
19 Dividends
Amounts recognised as distributions to equity holders
Final dividend paid of 0.44p per share
Interim dividend paid of 0.24p per share (2016: 0.22p)
2017
£
143,478
78,362
221,840
2016
£
-
69,300
69,300
Proposed final dividend of 0.50p per share (2016: 0.44p)
163,255
143,478
The proposed final dividend is subject to approval by shareholders at the Annual General
Meeting and has not been included as a liability in these financial statements. The proposed
dividend is payable on 4 August 2017 to shareholders on the Register of Members at 21 July
2017. The total recommended dividend to be paid is 0.50p per share. The payment of this
dividend will not have any tax consequences for the Group.
20 Share-based payment transactions
The Company operates an Unapproved Scheme and an Enterprise Management Incentives
Scheme. The total expense recognised in the year to 31 March 2017 arising from share-
based payment transactions is £147,651 (2016: £254,067).
Unapproved scheme
Number
Weighted average
exercise price
Number of options outstanding at 1 April 2016
Granted during period
Forfeited during period
Exercised during period
Number of options outstanding as at 31 March 2017
2,587,093
-
-
-
2,587,093
Number of options exercisable as at 31 March 2017
2,587,093
£0.23
-
-
-
£0.23
£0.23
The exercise price of the options outstanding at 31 March 2017 ranges between £0.10 and
£0.42. The weighted average remaining contractual life of the options outstanding at 31
March 2017 is 3 years (2016: 4 years).
53
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
20 Share-based payment transactions (continued)
EMI scheme
Number
Weighted average
exercise price
Number of options outstanding at 1 April 2016
Granted during period
Forfeited during period
Exercised during period
Number of options outstanding as at 31 March 2017
1,713,772
510,000
(62,316)
(42,315)
2,119,141
Number of options exercisable as at 31 March 2017
296,208
£0.05
£0.05
£0.05
£0.05
£0.05
£0.05
The weighted average remaining contractual life of the options outstanding at 31 March 2017
is 8 years (2016: 9 years).
For the EMI share options granted during the year, the weighted average fair value of the
options is £0.42. The fair value of the options was measured using the Black Scholes options
valuation model. The inputs into that model in respect of the EMI share options were as
follows:
Share price
Exercise price
Expected volatility
Expected option life
Risk-free rate
£0.46
£0.05
19.29%
10 years
0.86%
The risk-free rate is based on the yield of a 10 year government bond.
The expected share price volatility is based on the Company’s share price since 20 August
2015.
For the EMI share options exercised in the year, the share price at the date of exercise was
£0.45.
21 Operating lease arrangements
At the balance sheet date, the Group had outstanding commitments for future minimum lease
payments under non-cancellable operating leases, which fall due as follows:
Within one year
In the second to fifth years inclusive
2017
£
49,605
71,106
120,711
2016
£
39,400
91,000
130,400
Operating lease payments represent rentals payable by the Group for certain of its office
properties.
54
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
22 Remuneration of key management personnel
The remuneration of the key management personnel of the Group, including all directors, is
set out below in aggregate for each of the categories specified in IAS 24 Related Party
Disclosures.
Short-term employee benefits
Share-based payments
Post-retirement benefits
23 Related party disclosures
2017
£
694,790
112,956
12,000
819,746
2016
£
586,283
212,116
22,934
821,333
Balances and transactions between the Group and other related parties are disclosed below:
Dividends totalling £153,646 (2016: £49,709) were paid in the year in respect of Ordinary
shares held by the Company’s directors.
During the year the Group charged £24,060 (2016: £24,060) to DMJ Consultancy Services
Limited for administrative services, a company in which Derek Joseph serves as a director. At
31 March 2017, the balance owed to the Group by DMJ Consulting Limited was £7,219 (2016:
£14,436).
During the year the Group was charged £257 (2016: £12,410) by Jeffrey Zitron for consultancy
services.
24 Retirement benefit schemes
Defined contribution schemes
Contributions payable by the Group for the year
25 Control
2017
£
88,565
2016
£
80,770
In the opinion of the Directors there is no single ultimate controlling party.
55
Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2017
26 Financial instruments
Financial risk management
The Group’s activities are exposed to a variety of market risk (including foreign currency risk
and interest rate risk), credit risk and liquidity risk.
Credit risk
Credit risk is the risk of financial loss to the Group resulting from counterparties failing to
discharge their obligations to the Group. The Group’s principal financial assets are trade and
other receivables and cash and cash equivalents.
The Group considers its credit risk to be low. Of the total trade receivables at the 2017 year
end, £107,604 (2016: £68,808) is due from one customer. There are no other customers that
represent more than 9% of the total balance of trade receivables. The maximum exposure to
credit risk is equal to the carrying value of these instruments.
Liquidity risk
Liquidity risk is the risk of the Group being unable to meet its liabilities as they fall due. The
Group manages liquidity risk by maintaining sufficient cash reserves and holding banking
facilities, and by continuously monitoring forecast and actual cash flows. In addition, the
Group is a cash generative business with income being received regularly over the course of
the year. The Group held cash reserves of £2,312,600 (2016: £2,552,642) at the year-end.
Foreign currency risk
Foreign exchange risk is the risk of loss due to adverse movements in the exchange rates
affecting the Group’s profits and cash flows. Only a very small number of clients are invoiced
in Euros and USD and the foreign exchange exposure is not considered a significant risk. The
Group’s principal financial assets are cash and cash equivalents and trade and other
receivables, which are almost exclusively denominated in Pounds Sterling.
Interest rate risk
The Group does not undertake any hedging activity in this area. The main element in interest
rate risk involves sterling deposits which are placed on deposit.
Capital risk management
Internal working capital requirements are low and are regularly monitored. Externally imposed
capital requirements to which the Group is subject have been complied with in the year.
27 Post Balance Sheet event
There are no post balance sheet events.
28 Capital commitments
There were no capital commitments at 31 March 2017.
29 Contingent liabilities
There were no contingent liabilities at 31 March 2017.
56
Aquila Services Group plc
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Aquila Services Group plc will be held at
Tempus Wharf 29A, Bermondsey Wall West, London, SE16 4SA on 27 July 2017 at 4:30 pm, for the
purpose of considering and, if thought fit, passing the following resolutions, of which resolutions
numbered 1 to 4 will be proposed as ordinary resolutions and resolutions 5 to 7 will be proposed as
special resolutions:
Ordinary business
1.
2.
3.
4.
To receive the reports of the directors and auditor and the financial statements for the period
ended 31 March 2017.
To approve the remuneration report for the period ended 31 March 2017.
That, following a recommendation by the directors, a final dividend payment of 0.50p per
Ordinary Share shall be paid to those persons who were named on the register of
shareholders on 21 July 2017.
That Saffery Champness LLP be and is hereby reappointed as auditor of the Company and
that the directors be authorised to determine the auditor's remuneration.
Special business
5.
That, in accordance with section 551 of the CA 2006, the directors be generally and
unconditionally authorised to issue and allot equity securities (as defined by section 560 of the
Companies Act 2006) up to an aggregate nominal amount of:
5.1 £205,657 in connection with the valid exercise of the unapproved options granted by the
Company (as set out in the prospectus issued by the Company dated 20th July 2015) any
unapproved options granted to current or former officers of the Company and options
granted to employees and officers of the Company and/or its subsidiaries in accordance
with the terms of the Company's Employee Share Option Scheme ("Options"); and
5.2
in any other case, £544,183 (such amount to be reduced by the nominal amount of any
equity securities allotted pursuant to the authorities in paragraphs 11.1 above in excess of
the stated amount)
provided that this authority shall, unless renewed, varied or revoked by the Company, expire
on the date of the next annual general meeting of the Company save that the Company may,
before such expiry, make offers or agreements which would or might require relevant
securities to be allotted and the directors may allot relevant securities in pursuance of such
offer or agreement notwithstanding that the authority conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities previously granted to the
directors to allot relevant securities but without prejudice to any allotment of shares or grant of
rights already made, offered or agreed to be made pursuant to such authorities.
6.
That, subject to Resolution 5 above being duly passed, the directors of the Company be and
are hereby empowered, pursuant to section 570 of the Act, to allot equity securities (as
defined in section 560 of the Act) wholly for cash pursuant to the authority conferred upon
them by Resolution 6 above (as varied, renewed or revoked from time to time by the
Company at a general meeting) as if section 561(1) of the Act did not apply to any such
allotment provided that such power shall be limited to the allotment of equity securities:
57
Aquila Services Group plc
Notice of Annual General Meeting
6.1
in connection with a rights issue or any other pre-emptive offer in favour of holders of equity
securities where the equity securities offered to each such holder is proportionate (as
nearly as may be) to the respective amounts of equity securities held by each such holder
subject only to such exclusion or other arrangements as the Directors may consider
appropriate to deal with fractional entitlements or legal or practical difficulties under the
laws of or the requirements of any recognised regulatory body in any territory or otherwise;
6.2
in connection with the valid exercise of Options;
6.3
in connection with the valid exercise of any share options granted to employees of the
Group in accordance with the terms of the Employee Share Option Scheme; and
6.4 otherwise, up to a maximum nominal amount of £81,628.
The power granted by this resolution will expire on the conclusion of the Company's next
annual general meeting (unless renewed, varied or revoked by the Company prior to or on
such date) save that the Company may, before such expiry make offers or agreements which
would or might require equity securities to be allotted after such expiry and the directors may
allot equity securities in pursuance of any such offer or agreement notwithstanding that the
power conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted to the
directors to allot equity securities as if section 561(1) of the CA 2006 did not apply but without
prejudice to any allotment of equity securities already made or agreed to be made pursuant to
such authorities.
7.
That the Company be and is hereby authorised generally and unconditionally to make market
purchases (within the meaning of section 693(4) of the Companies Act 2006) of its ordinary
shares (“Ordinary Shares”) provided that:
7.1
the maximum aggregate number of Ordinary Shares that may be purchased is 3,265,100;
7.2
the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is
£0.05;
7.3
the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is the
higher of:
(a)
(b)
105 per cent of the average closing middle market quotations for the Ordinary Shares
as quoted on the Official List of the London Stock Exchange for the five business
days prior to the day the purchase is made; and
the value of an Ordinary Share calculated on the basis of the higher of the price
quoted for:
(i)
(ii)
the last independent trade of; and
the highest current independent bid for any number of Ordinary Shares on the
Official List.
7.4 The authority conferred by this resolution shall expire on the conclusion of the Company's
next annual general meeting save that the Company may, before the expiry of the authority
granted by this resolution, enter into a contract to purchase Ordinary Shares which will or
may be executed wholly or partly after the expiry of such authority.
58
Aquila Services Group plc
Notice of Annual General Meeting
Registered office:
Tempus Wharf
29a Bermondsey Wall West
London
SE16 4SA
Notes
By order of the board
Dr Fiona May Underwood
Company Secretary
28 June 2017
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to exercise all or any of their rights to
attend, speak and vote on his/her behalf at the meeting. A proxy need not be a member of the company.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may
not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may
photocopy the form of proxy. Please indicate the proxy holder’s name and the number of shares in relation to which they are
authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if
the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the
same envelope.
A form of proxy accompanies this notice. Forms of proxy, to be valid, must be delivered to the company’s registrars, Neville
Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA in accordance with the instructions printed thereon, not
less than 48 hours before the time appointed for the holding of the meeting.
If you are not a member of the company but you have been nominated under section 146 of the Companies Act 2006 (the ‘Act’)
by a member of the company to enjoy information rights, you do not have the rights of members in relation to the appointment of
proxies set out in notes 1, 2 and 3. The rights described in those notes can only be exercised by members of the company.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the
resolution. If you either select the “Withheld” option or if no voting indication is given, your proxy will vote or abstain from voting at
his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put
before the meeting.
Information regarding the meeting, including the information required by section 311A of the Act, is available from
www.aquilaservicesgroup.co.uk
As provided by Regulation 41 of the Uncertificated Securities Regulations 2001, only those members registered in the register of
members of the company 48 hours before the time set for the meeting shall be entitled to attend and vote at the meeting in
respect of the number of shares registered in their name at that time. Changes to entries on the relevant register of securities
after that time shall be disregarded in determining the rights of any person to attend or vote at the meeting.
As at close of business on 28 June 2017 the company’s issued share capital comprised 32,651,003 ordinary shares of 5 pence
each. Each ordinary share carries the right to one vote at a general meeting of the company and, therefore, the total number of
voting rights in the company at close of business on 28 June 2017 is 32,651,003.
Under section 319A of the Act, the company must answer any question you ask relating to the business being dealt with at the
meeting unless (a) answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of
confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is
undesirable in the interests of the company or the good order of the meeting that the question be answered.
If you are a person who has been nominated under section 146 of the Act to enjoy information rights (a ‘Nominated Person’), you
may have a right under an agreement between you and the member of the company who has nominated you to have information
rights (a ‘Relevant Member’) to be appointed or to have someone else appointed as a proxy for the meeting. If you either do not
have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you
and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights. Your main point of
contact in terms of your investment in the company remains the Relevant Member (or, perhaps, your custodian or broker) and
you should continue to contact them (and not the company) regarding any changes or queries relating to your personal details
and your interest in the company (including any administrative matters). The only exception to this is where the company
expressly requests a response from you.
11. Members satisfying the thresholds in section 338 of the Act may require the company to give, to members of the company entitled
to receive notice of the Annual General Meeting, notice of a resolution which those members intend to move (and which may
properly be moved) at the Annual General Meeting. A resolution may properly be moved at the Annual General Meeting unless
(i) it would, if passed, be ineffective (whether by reason of any inconsistency with any enactment or the company’s constitution or
otherwise); (ii) it is defamatory of any person; or (iii) it is frivolous or vexatious. The business which may be dealt with at the
Annual General Meeting includes a resolution circulated pursuant to this right. A request made pursuant to this right may be in
hard copy or electronic form, must identify the resolution of which notice is to be given, must be authenticated by the person(s)
making it and must be received by the company not later than 6 weeks before the date of the Annual General Meeting.
12. Members satisfying the thresholds in section 338A of the Act may request the company to include in the business to be dealt with
at the Annual General Meeting any matter (other than a proposed resolution) which may properly be included in the business at
the Annual General Meeting. A matter may properly be included in the business at the Annual General Meeting unless (i) it is
defamatory of any person or (ii) it is frivolous or vexatious. A request made pursuant to this right may be in hard copy or
electronic form, must identify the matter to be included in the business, must be accompanied by a statement setting out the
grounds for the request, must be authenticated by the person(s) making it and must be received by the company not later than 6
weeks before the date of the Annual General Meeting.
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Aquila Services Group plc
Notice of Annual General Meeting
13. Members satisfying the thresholds in section 527 of the Act can require the company to publish a statement on its website setting
out any matter relating to (i) the audit of the company’s accounts (including the auditor’s report and the conduct of the audit) that
are to be laid before the Annual General Meeting; or (ii) any circumstances connected with an auditor of the company ceasing to
hold office since the last Annual General Meeting, which the members propose to raise at the meeting. The company cannot
require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to
the company’s auditor no later than the time it makes its statement available on the website. The business which may be dealt
with at the Annual General Meeting includes any statement that the company has been required to publish on its website
pursuant to this right.
14.
Copies of the directors’ service contracts will be available for inspection at the registered office of the company during usual
business hours from the date of this notice until the date of the Annual General Meeting, and also during and at least fifteen
minutes before the beginning of the Annual General Meeting.
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