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Aquila Services Group plc
Annual report and financial statements
for the year ended 31 March 2019
Company Registration No. 08988813 (England and Wales)
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Aquila Services Group plc
Contents
Directors and Advisers
Chair’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 Flow
Company Statement of Cash Flow
Notes to the Financial Statements
Notice of Annual General Meeting
Page
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Aquila Services Group plc
Directors and Advisers
Directors
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Derek Joseph
Dr Fiona Underwood
Steven Douglas CBE
Susan Kane
Richard Wollenberg
Jeffrey Zitron
Chair (Non-Executive Director)
Executive Director – Chief Executive
Altair and Company Secretary
Group Chief Executive
Group Finance Director
Non-Executive Director
Non-Executive Director
– resigned 30 January 2019
Company Secretary
Dr Fiona Underwood
Registered office
Independent Auditors
Corporate Advisor
Bankers
Registrars
Tempus Wharf
29A Bermondsey Wall West
London
SE16 4SA
Crowe U.K. LLP
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
Beaumont Cornish Limited
10th Floor
30 Crown Place
London
EC2A 4EB
National Westminster Bank plc
50 High Street
Egham
Surrey
TW20 9EU
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Company Number
08988813
Company website
www.aquilaservicesgroup.co.uk.
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Aquila Services Group plc
Chair’s Statement
Dear Shareholder,
I am pleased to present the Annual Report and Financial Statements for the year to 31 March 2019.
Aquila Services Group plc (‘the company’) is the holding company for Altair Consultancy & Advisory
Services Ltd (‘Altair’) and Aquila Treasury & Financial Solutions Ltd (‘ATFS’) which form the group
(‘the group’).
We are pleased to welcome Oaks Consultancy Limited (‘Oaks’), an independent consultancy which
assists education and sporting organisations and joined the group on 11 June 2019.
The group continues to implement its business strategy of widening our offer to encompass all the
professional consultancy services that our client base demands. The group now encompasses
specialisms in affordable housing, regeneration, sport and education consultancy. This includes the
provision, financing and management of affordable housing and related activities, advising and
supporting organisations that benefit local communities such as housing associations, local
authorities, government agencies, multi-academy trusts, other non-profit organisations and those
set up for community benefit, as well as providing related high level business advice to the
commercial property sector. The acquisition of Oaks is a key step in fulfilling this strategy.
Group Members
Altair Consultancy & Advisory Services Ltd
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, during the year under review, has been
consolidating its presence in the Republic of Ireland and has continued its investment in further
resourcing its client base in the Midlands and the North of England. Altair advises on all aspects of
development and management of affordable housing for rent and sale and on the effective
management of organisations operating in the sector. With the changes in the regulatory regime
allowing ‘for profit’ housing organisations to be registered with The Regulator for Social Housing,
advising commercial development companies on how they can comply and work within the new
regime is a significant area of expansion.
The acquisition of ‘pod’, a consultancy specialising in development and related financial modelling
services in October 2017 was reported in my previous annual statement. We have now been able
to consolidate these activities within the Altair framework and this business stream is now poised
for significant growth underpinned by a programme of recruitment which is already underway.
As reported previously, a separate business stream to bid for and undertake work in Africa was
established in 2017 and is now being further resourced to expand our international work. This
reflects an increased interest by national governments in developing economies, pan-national
institutions and aid agencies in the benefits of urban regeneration and creating institutions to
support affordable housing in the continent.
The company has over 300 active clients and depending on the service requirement, supplies
these on time-based charge-out rates, fixed price or retention agreements.
Aquila Treasury & Financial Solutions Ltd
ATFS is a specialist treasury management consultancy authorised and regulated by the Financial
Conduct Authority. ATFS advises local authorities, housing associations, higher education bodies
and other clients on their capital funding requirements and supports them in securing and
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Chair’s Statement
managing debt finance. The business operates principally through contracts as retained general
treasury advisers with a significant number of clients, and specific advisory projects on which fees
are generated according to agreed milestones.
ATFS provides its consultancy services principally through retention agreements or fixed price
contracts. Where it is involved in advising on fundraising, fee arrangements are normally result
based. These latter contracts are often procured as a result of winning competitive tenders. As
smaller clients raise new funds infrequently, growth will be through expanding the client base.
Oaks Consultancy Limited
Oaks joined the group on 11 June 2019 and so its results are not included in the accompanying
consolidated results. The company was founded in 2008 and has an established track record in
education and sports related consultancy and in recent years has grown its core client base to
include organisations in the voluntary and public sector which are either existing group clients or
have synergies with the work of those clients.
Oaks is based in Birmingham with the team of 18 delivering services across the UK.
The unaudited management accounts of Oaks at 31 March 2019 reported turnover for the
12 months of £909k and profit before taxation but not adjusted for directors’ salaries of £254k. The
total consideration for the purchase, including the maximum payment for meeting targets over the
next two financial years will not exceed £1.7m of which 35% is cash and 65% new ordinary shares.
Oaks sells its services either through retention agreements, fixed price contracts, or success
related fees. This latter arrangement is particularly relevant to assignments involving bidding for
funds or arranging sponsorship.
Investments
In March 2018, Aquila acquired minority stakes in 3C Consultants Limited and AssetCore Limited,
companies involved in the provision of IT consultancy to the affordable housing sector and a cloud-
based platform to manage loan security respectively. The total cost was approximately £348k. In
addition to the investment in 3C, Steve Douglas, our Group Chief Executive, joined the board as a
non-executive director. The company sells its consultancy services on a similar basis to Altair and
is looking to replicate the same growth targets.
The investment in AssetCore represents around 8% of its enlarged equity and was part of a
£500,000 cash injection to expand the platform currently used by eleven major housing
associations. I, and our non-executive director Richard Wollenberg also invested similar amounts
and now each hold around 8% of the enlarged equity and I sit on the board as a non-executive
director.
It is part of the group’s continuing strategy to establish a presence as a key player in a range of IT
consultancy and digital initiatives in the sector.
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Chair’s Statement
Financial results
The comparison between this reporting period, the mid-year results and the previous year’s results
for the Group are as follows:
Year ended 6 months to Year ended
31 March 30 September 31 March
2019 2018 2018
(audited) (unaudited) (audited)
£000s £000s £000s
Turnover 7,656 3,592 5,905
Gross profit 1,867 773 1,562
Operating profit (before share option charge) 724 281 660
Share option charge 117 59 135
Operating profit (after share option charge) 607 222 524
The Group has a strong balance sheet with £1.72m (2018: £0.98m) in cash deposits as at 31 March
2019. Where the Group is committed to pay cash for the acquisition of Oaks, there is sufficient cash
and working capital to facilitate this.
Altair’s consultancy and interim management business contributed £7.086m (2018: £5.32m) and
ATFS’s £0.58m (2018: £0.59m).
Operating profit took into account investment in new staff and resources for expanding our activities
and meeting changing demand. Profit after tax, attributable to shareholders, was £461k (2018:
£405k) and earnings per share was 1.32p (2018: 1.20p).
Dividend
The directors propose a final dividend of 0.6p per share (2018: 0.55p), making a total dividend for
the year of 0.89p per share (2018: 0.81p), an increase of 10% compared to 2018. This will be
payable on 2 August 2019 to shareholders on the register at 19 July 2019.
Outlook
The outlook for the group remains positive. We are expanding our services and skill base to meet
the demands of key organisations in the UK economy. Whatever the outcome of the Brexit
negotiations and the future political make-up, there will be continuing pressure to deliver more
homes, support employment, particularly in the construction industry, and for the promotion of
health and education, including sporting opportunities.
The international work of Altair offers the opportunity to expand our revenue base as well as
diversify our markets. Altair Africa and Altair International were set up in 2017 as our first ventures
into this wider market. We have built up a small team where I have taken an executive role in
identifying clients, winning contracts and being involved in the delivery. These contracts are nearly
all won through competitive tender and based on fixed prices, usually denominated in dollars or
euros. Building on this initial success, we anticipate appointing an executive to lead this team and
to recruit additional specialists, both as employees and associates.
Critical to the reputation and sector penetration of the business is that we embrace the digital
agenda of our clients. The investment in 3C and AssetCore is part of this strategy, balancing
consultancy support with development of specialist platforms. We will be continuing this approach
for the foreseeable future to exploit the demand for digital services.
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Chair’s Statement
We operate in an industry where the providers of support services to our existing clients and
potential clients come from a few major providers and a range of smaller fragmented businesses.
Where there are synergies and financial opportunities, we will look to make acquisitions. At the
same time, we will look to recruit the additional specialist skills we need and invest in our existing
staff. Any acquisitions will always include a significant element of shares in the company as part of
the consideration and for existing staff, the provision of a valuable share option scheme.
There will always be a limit to how fast the business can grow; we will continue to balance the need
for investment and the continuing growth of our reported profits and dividend yield. For the year
ended 31 March 2019, I believe that we achieved the right balance and we will continue these
policies and strategies for the foreseeable future. I look forward to reporting on continuing progress
in our next report for the six months ending 30 September 2019.
I cannot finish this report without recording my thanks to my fellow directors, executive team and
staff and associates of the group. As a people business, the group is dependent on their
commitment and expertise.
In particular I want to record my thanks to Susan Kane, our Group Finance Director, who was one
of the prime movers in setting up Altair in February 2011 and who, after a sabbatical in 2018 and
then returning to the group on a part-time basis, has decided to step back from her Group
commitments from the date of this year’s AGM and retire fully from September 2019. I am delighted
that Claire Banks, our current Head of Finance and Corporate Resources, will step into the role of
Group Finance Director. I must also mention our pleasure in the award of a CBE in the recent
Honours List to our Group Chief Executive, Steve Douglas, for his services to housing. It is richly
deserved.
Derek Joseph – Chair
26 June 2019
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Strategic Report
Strategy and Objectives – Leadership, Quality, Insight
The strategy and objectives of the Group are to:
n Provide high quality consultancy advice and support to organisations operating within or
aligned to the public sector that aim to make a difference in communities
n Continue to seek out acquisitions and investments which will expand our range of services
and scope of business to increase our ability to be a multi-disciplinary, multi-sector provider
of professional support services for the clients of our subsidiary companies
n Attract and retain employees by providing a great place and environment to work, and enable
employee participation and reward through equity participation
n Increase our client base across the UK and internationally
n Encourage innovation through the development of new products.
Our business
As at 31 March 2019 the Group comprised the holding company, Aquila Services Group plc (“the
Company”), and two trading subsidiaries, Altair Consultancy and Advisory Services Limited
(“Altair”) and Aquila Treasury and Finance Solutions Limited (“ATFS”).
Altair Consultancy and Advisory Services Ltd
Altair provides support services to enable 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, developers and regeneration specialists, charities and local
authorities. Our 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.
The full integration of “pod” has greatly expanded our development, regeneration and compliance
offering.
We have strong relationships with the English Regulator (the Regulator of Social Housing), Greater
London Authority, Welsh Government, Community Housing Cymru, the Scottish Housing
Regulator, the Irish Housing Regulator, the Irish Council for Social Housing and the Government of
Jersey. 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.
Altair has created a specialist bid team to enable our expansion into Africa. This work has focused
on assisting governmental and international institutions interested in the provision of affordable
housing in countries such as Nigeria and Rwanda.
Aquila Treasury and Financial Solutions Ltd
ATFS specialises in providing debt and financial risk management advice to organisations
principally involved in the affordable/social housing and education sectors. Continued pressure to
deliver more homes and fundamental changes in the financing markets mean there is strong and
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Strategic Report
growing demand for specialist treasury advisory services, with increasing emphasis on funding
from the capital markets and other sources of long-term capital.
Housing associations and local authorities are becoming involved in more complex legal,
commercial and financial structures, particularly with housebuilders and private sector developers
in joint ventures. As clients face new risks, Altair’s products and services complement ATFS’ core
advisory activity, providing opportunity for the growth of a comprehensive financial and commercial
advisory service.
Going Forward
Oaks Consultancy Ltd
Oaks specialises in two main sectors: Education, working with multi-academy trusts/further and
higher education institutions; and Sport, working with sport bodies, charities and clubs. Oaks will
enable the diversification of our offer using the synergies of our core strengths in governance
consultancy, strategic advice and financial modelling support.
Review of the Business
Key Performance Indicators
The Group monitors its key performance indicators (KPIs) regularly. These are set out below:
Revenue Gross profit Earnings
£000s £000s per share
2019 7,656 1,867 1.32p
2018 5,905 1,562 1.20p
Number of Number of Client retention
clients new clients rate (%)
2019 339 107 84
2018 225 77 66
The year under review has achieved the following financial results:
The Group saw a 30% increase in turnover on 2018. This reflected the growth in Altair’s housing
consultancy, specifically through the acquisition of “pod”, which was countered by a decline in
revenue of interim management business through a tightening of IR35, some consolidation in the
sector, and the continued impact of the government’s policy of rent reduction for the sector.
Gross profit for the Group increased by £0.31m (20%). Aquila continues to make substantial
investment in its staff and IT infrastructure in anticipation of future growth; the Board anticipates
that this continued investment will aid future profit growth. The Group is in a very strong net asset
position, with £1.72m in cash held at 31 March 2019.
Operating across the UK and Ireland, we have continued to grow our services into the North of
England and Wales. Our international work also continues to grow and demonstrates our ability to
transfer our expertise internationally. The Group is benefiting from our acquisitions and investment
in recent years and we have seen an increase in opportunities arising from cross-selling the full
range of our services with clients.
Brexit is causing continued uncertainty in the sector, with the most significant impact being on
housing associations with large market-sale development programmes. We are supporting a
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number in reprofiling their programmes and ensuring financial viability going forward. Despite the
challenges in the outright sale market, development activity in the affordable and social housing
sector has remained strong this year. The National Housing Federation reported that, in the twelve
months to December 2018, housing associations had completed almost 44,000 new homes, an
increase of 12% compared to the previous year. The first quarter for 2019 followed the same trend
with nearly 11,000 new homes registered in the affordable and social rented sector, an increase of
36% on the previous year.
This was the first full year of integration following the acquisition of “pod” in October 2018, which
expanded our property development capability and capacity, enabling us to take advantage of this
strong market. In addition, the removal of the Local Housing Allowance cap is now resulting in a
significant increase in development activity by local authorities, with many also setting up their own
wholly-owned subsidiaries for development purposes. Aquila is uniquely positioned to provide
support on the initial set-up, governance, procurement and then ongoing development programme
delivery for these organisations. We are already working with clients such as Lambeth, Enfield,
Basildon, Barking and Dagenham.
Compliance with health and safety requirements is a priority for housing providers; this has come
into sharper focus following the Grenfell tragedy. We have supported a wide range of organisations
in compliance audits and providing governance advice. We have increased our staff capacity to
meet this client need. Previously there has been a trend towards deregulation in the sector but,
following the publication of the Social Housing Green Paper in 2018, we are likely to see a
strengthening of consumer regulation in some form. With governance being one of our core
disciplines, we are well positioned to support organisations in ensuring that their overall approach
to governance complies with the needs of the changing environment.
The affordable and social housing sector is continuing to become more diverse, with an increase in
the number of ‘new entrants’ and ‘for-profit’ affordable housing providers. This includes institutional
investors and commercial developers who see benefits in setting up as a registered provider of
social housing. These new entrants are likely to change the shape of the sector over the next five
years, with many having strong ambitions to grow quickly. Our work with these new entrants, such
as Blackstone/Sage, Alpha Real Capital and Resi, has focused on providing advice on areas such
as registering with the Regulator for Social Housing, financial planning, funding, ensuring
regulatory compliance and organisational design. This part of the sector is likely to increase in size
and is a key growth opportunity for Aquila.
Within the traditional social housing sector, there is a continued drive for organisations to operate
more efficiently and create capacity to build more homes. We have supported several mergers
throughout the year and expect further activity next year. Organisational change and transformation
activities also remain high on the agenda of many in the sector.
As part of our approach to supporting clients in embracing technology and modernising approaches
to work, our work with 3C continues to cover all aspects of ICT consultancy, from strategy to
implementation. We also continue to support the exploration of a fintech platform for financial
institution compliant document handling through our investment in AssetCore. Both strategic
investments support the continuing diversification of our offer to clients, with a specific focus on
technology and transformation activities.
Through the transformation programmes, there is ongoing appetite for our human resource and
recruitment activities. This particularly focuses on providing support during organisational change.
This year we have been involved in several high-profile recruitment activities for executive and non-
executives for clients such as Gentoo, Riverside, and Shepherds Bush Housing Groups.
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Our international work has seen projects in Rwanda and Nigeria. Our work in this area involves
providing support for the set-up, funding and management of affordable and social housing related
activities. There are significant opportunities for growing our international activities. To support this
we have developed, resourced and are implementing an international growth strategy.
We continue to position ourselves as thought leaders in the sector. We published the results of our
second report (the first was published in 2016) in the Future Gazing Future Shaping series which
aims to assess levels and approaches to innovation and transformation in the sector.
We were commissioned by seven housing associations in Wales to complete a feasibility study,
funded by Welsh Government, into the most efficient way of delivering 250 off-site manufactured
homes per annum in South Wales. This links to our increased activity in the developing area of
modern methods of construction.
We also continue to be a lead partner in the Leadership 2025 campaign, creating a more diverse
leadership across the housing sector. This work is supported by BME London, L&Q, Optivo and
Network Homes.
The extension of IR35 to the private sector is leading to changes in demand for our executive
interim management services. Ongoing uncertainty caused by Brexit is also likely to remain a
challenge for many in the sector. However, overall the opportunities for continued growth remain
strong.
ATFS continues to be contractually retained general treasury advisers to a significant number of
clients and additional fees are secured on specific bespoke projects. During the year under review,
we successfully advised several clients in connection with their first financing from the capital
markets. Although uncertainty concerning the impact of “Brexit” has caused some delay in clients
committing to projects, further similar assignments have commenced with fees expected to accrue
during the next twelve months.
Post balance sheet event
On 11 June 2019, the Group acquired the entire share capital of Oaks Consultancy Limited. The
total consideration for the purchase, including the maximum payment for meeting targets over the
next two financial years, will not exceed £1.7m of which 35% is cash and 65% new ordinary shares,
as set out in note 25 to the Financial Statements.
The Group will also continue to look at opportunities to expand its consultancy base through
acquisition so as to offer an increased scope of services and products to our clients.
Principal Risks and Uncertainties
The principal risks currently faced by the Group are:
Financial Instruments
The main financial risks arising from the Group’s activities are credit risk, foreign currency risk and
interest rate risk, details of which can be found in note 24 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 an adverse influence
upon government policy and spending, and private sector investments.
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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 and the immediate aftermath of the United Kingdom leaving the
European Union could lead to a period of uncertainty; this may cause clients to review their
spending with consultancy providers and lead to a reduction in projects.
The focus on the tax arrangements of IR35 within the interim market for public sector bodies has
caused a softening of the interim market with government and local authorities. Clients are carefully
reviewing their spend and methods of resourcing, turning to new and alternative models.
Reduction in government investment and funding
The Group’s future revenues and profitability will be dependent on the current UK Government’s
policy regarding 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 Grenfell tragedy in 2017 has meant that organisations have invested in remedial works and,
although the Government has indicated there is some money available for recladding of tower
blocks, this has been provided from the Affordable Housing Programme which provides the grant
to clients who are developing new houses. This reallocation of investment is likely to affect
development and regeneration programmes for our clients, although the funding is due to be
reinstated in the 2022 Programme.
A change in the political environment relating to regeneration, specifically in the major cities, could
dampen private developer appetite and this would have an impact on our clients.
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 resulting in 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. Any shortage in the availability of appropriately skilled
personnel may have a negative impact on the Group. The directors of the subsidiaries are expected
to contribute to the Group’s ability to obtain, generate and manage opportunities.
Data governance
The increase of cyber-attacks and the loss of data is a serious risk that is monitored closely. The
Group complies with all relevant legislation and has invested in updated systems, security and
training during the year.
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The Group seeks to mitigate all these risks through ensuring that it monitors changes in statutory,
regulatory and financial requirements 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. 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:
Male Female
Directors of the Company 3 2
–––––––––– ––––––––––
Directors of subsidiary companies not included in above 3 –
Employees in other senior management positions 2 3
–––––––––– ––––––––––
Total senior managers other than directors of the Company 5 3
Other employees of the Group 21 23
–––––––––– ––––––––––
Total employees of the Group 29 28
–––––––––– ––––––––––
The Group consults with its employees regularly 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 environmental 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 focus our corporate and social responsibility in four
key areas: sustainability, staff, charitable giving, and supporting communities.
n We are committed to treating with respect and dignity those we work with.
n We are committed to honesty and transparency in our communication with staff, external
stakeholders, and customers.
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n We recognise the importance of reflecting our clients and networks within the housing sector
and seek to promote diversity and inclusion in all our activities.
n The Group considers a strategic approach to diversity and inclusion is imperative to creating
an environment that supports its talented and highly valued people. Our approach is based
on inclusivity, enabling those we work with, and those who work for us, to achieve their
potential.
n We ensure those we work with are provided with equitable opportunities, and do not
discriminate because of age, gender, sexuality, disability, ethnicity, or any other protected
characteristic listed in the Equality Act 2010.
n We aim to work actively with our suppliers to ensure they meet our values and consider the
sustainability implications of their decisions.
n We are conscious of our responsibilities to minimise the environmental impact of our
activities and to behave in a sustainable manner.
n 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.
n We work with organisations whose customers include some of the most vulnerable in society.
We are committed to supporting our clients as they contribute to their communities and
consider the impact of their plans on their stakeholders.
n We recognise that our staff are the most valuable asset of our organisation. Our employment
policies across the Group 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.
n Aquila will support the development of all its staff, particularly those from diverse
backgrounds. We will challenge inappropriate and discriminatory behaviours and will
continually assess our progress against organisations inside and outside of the sector.
n We support and encourage our staff to engage in the governance of organisations within our
spheres of influence, for example by holding non-executive directorships of charities or not-
for-profit organisations.
During the year, we continued our commitment to supporting a vibrant and inclusive leadership
within the housing sector. Altair has been providing extensive support to the Leadership 2025
programme. Altair, along with housing associations L&Q, Optivo, Network Homes and BME
London, in partnership with Roffey Park Business School, have led this leadership programme
aimed at senior leaders from BME backgrounds. Now recruiting for the third-year cohort, and
supported by the GLA, Leadership 2025’s central aim is to support and empower BME senior
professionals to become sector leaders of the future. Leadership 2025 seeks to positively disrupt
the housing sector by challenging current perceptions.
Altair has also committed to report on its performance against the findings of the Altair sector review
on how it performs in delivering diversity.
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Aquila Services Group plc
Strategic Report
Going Concern Basis
The Board updates its three-year business plan annually. This 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. 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 in the next twelve months
and over the three-year period of their assessment; thus they continue to adopt the going concern
basis of accounting in preparing the annual financial statements.
Steve Douglas CBE – Group Chief Executive
26 June 2019
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Aquila Services Group plc
Directors’ Report
The Directors present their report and consolidated financial statements for the year ended
31 March 2019.
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. Details of employee share schemes are set out in
note 20.
The Board’s assessment of the performance of the group, its future developments and the principal
risks and uncertainties affecting the group, together with the mitigating factors, are presented in the
Strategic report on pages 7 to 14.
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 2019 are set out from page 37.
Dividends
The directors recommend a final dividend of 0.6p per Ordinary share to be paid on 2 August 2019
to shareholders on the register at 19 July 2019 which, together with the interim dividend of 0.29p
paid on 21 December 2018, makes a total of 0.89p for the year.
Directors
The following served as directors of the Company during the period or thereafter:
Derek Joseph
Steven Douglas
Fiona Underwood
Susan Kane
Richard Wollenberg
Jeffrey Zitron
Chair
Group Chief Executive
Executive Director – Chief Executive Altair and Company Secretary
Group Finance Director
Non-Executive Director
Non-Executive Director – resigned 30 January 2019
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Aquila Services Group plc
Directors’ Report
Substantial Shareholdings
As at 31 March 2019, the Company was aware of the following notifiable interests in its voting
rights:
Number of Percentage of Nature of
Ordinary shares Voting rights holding
Richard Wollenberg* 3,808,406 10.8% Direct
Susan Kane 3,279,440 9.3% Direct
Fiona Underwood** 3,279,440 9.3% Direct
Chris Wood 3,279,440 9.3% Direct
Steven Douglas 3,144,305 8.9% Direct
Derek Joseph 3,005,538 8.5% Direct
Jeffrey Zitron 2,798,403 7.9% Direct
Matt Carroll 1,307,229 3.7% Direct
Hannah Breitschadel 1,307,229 3.7% 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
The Company is not aware of any changes to the above holdings between 31 March 2019 and the
date of this report.
Corporate Governance Statement
The Directors report incorporates the Corporate Governance Statement set out on pages 18 to 20.
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 18
to 20.
Post balance sheet events
Post balance sheet events are disclosed in note 25.
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 and the General Data
Protection Regulation (Regulation (EU)2016/679).
The updated policies are available on http://aquilaservicesgroup.co.uk.
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.
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Aquila Services Group plc
Directors’ Report
Auditor
Crowe U.K. LLP appointed as auditors on 12 March 2019 have expressed their willingness to
remain in office as Auditor and, in accordance with section 489 of the Companies Act 2006, a
resolution that Crowe U.K. 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
Details of any arrangement under which a director of the Company has
waived emoluments from the Company
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
see Directors’
Remuneration
Report
No such waivers
No such allotments
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.
No such contracts
Details of any contract of significance subsisting during the period between
the Company, one of its subsidiary undertakings, and a controlling
shareholder.
No such contracts
Details of contracts for the provision of services to the Company or any of its
subsidiary undertakings by the controlling shareholder.
No such contracts
Details of any arrangement under which a shareholder has waived or agreed
to waive any dividends, where a 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.
No such waivers
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.
Dr Fiona Underwood – Chief Executive Altair and Company Secretary
By order of the Board
26 June 2019
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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 21 to 30, 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 Guidance and Transparency Rules.
The Company is not required to comply with the Code. 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 two non-executive directors and three executive directors. The
Board determines that Richard Wollenberg is an independent non-executive director; its
assessment is based on the fact that Richard Wollenberg does not receive any additional benefits
from the Group.
Derek Joseph has taken on responsibility for helping the Group develop new business growth in
Africa. Additional staff members have been recruited to further develop this business and to take on
the leadership responsibility. Whilst carrying out these tasks, it has been agreed to remunerate the
Chair through a proportion of the fees he earns for the Group and, in the year to 31st March 2019,
these totalled £52,756. (2018: £4,620).
Both Derek Joseph and Richard Wollenberg are directors of AssetCore, of which the Group has an
8% shareholding.
Steven Douglas is a board director of 3C, an associate company of 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 10 times during the year.
Internal financial control
Financial controls have been established 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:
n the maintenance of proper records;
n a schedule of matters reserved for the approval of the Board; and
n 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.
The Group’s operations are conducted in accordance with the provisions of laws and regulations,
including compliance with the provision of laws and regulations central to the FCA.
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Corporate Governance Statement
Committees
The Group has three committees; Audit, Remuneration and Nominations with membership of:
Audit Remuneration Nominations
Committee Committee Committee
Derek Joseph 3 3* 3*
Richard Wollenberg 3* 3 3
Jeffrey Zitron** 3 3 3
Steven Douglas – – 3
Fiona Underwood 3 – –
* Committee Chair
** Resigned 30 January 2019
Audit Committee
The Audit Committee, which is chaired by Richard Wollenberg, comprises the independent non-
executive director, the non-executive director 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:
n to monitor the financial reporting for the annual and half-yearly reports, challenging where
necessary to ensure appropriate accounting standards have been met;
n review the internal controls and risk management systems;
n review the compliance, whistleblowing and fraud polices for the organisation;
n make recommendations to the Board and shareholders in relation to the appointment,
reappointment and removal of the external auditors; and
n 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 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.
As part of the decision to recommend to the Board the re-appointment of the external auditor, the
committee considers 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.
The external audit was retendered in February 2019, the process being overseen by the non-
executive members of the audit committee. There was a formal selection process where three
auditors were selected of which two submitted tenders for appointment. Crowe LLP were appointed
by the board following the recommendation from the Audit Committee on 12 March 2019.
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Corporate Governance Statement
The Audit Committee are satisfied with the outcome of the procurement process.
Nominations Committee
The primary responsibilities of the Nominations Committee are:
n regularly review the structure, size and composition (including the skills, knowledge,
experience and diversity) of the board;
n consider succession planning for directors and other senior executives;
n keep under review the leadership needs of the organisation, both executive and non-
executive;
n identifying and nominating, for the approval of the board, candidates to fill the board
vacancies as and when they arise;
n make recommendations to the Board and shareholders in relation to the appointment,
reappointment and removal of the external auditors; and
n 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 the
financial year.
Remuneration Committee
The primary responsibilities of the Remuneration Committee are:
n 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;
n recommending and monitoring the level and structure of senior management remuneration;
n reviewing the ongoing relevance of remuneration policy;
n approving and determining targets for any performance-based pay schemes;
n ensuring contractual terms of termination are fair; and
n overseeing any major change in employee benefits.
The Remuneration Committee met three times during the year.
The report of the Remuneration Committee is set out on pages 21 to 30 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 sent 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.
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Aquila Services Group plc
Directors’ Remuneration Report
The information provided on this page of the Directors’ Remuneration Report is not subject to Audit.
The report is split into three main areas:
•
•
•
Statement from the Chair
Annual Report on Remuneration
Policy Report
Remuneration Committee membership
Derek Joseph
Richard Wollenberg Non-Executive Director
Jeffrey Zitron
Chair
Non-Executive Director – resigned 30 January 2019
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 2018 annual general meeting.
Statement from the Chair
I am pleased to present the Annual Report on Remuneration for the year ended 31 March 2019.
The Remuneration Committee has used the remuneration policy 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
considered 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 2013.
The Remuneration Committee met three times during the year to discuss the Executive Director’s
remuneration, including bonus and share option awards. The Directors reviewed the remuneration
policy and agreed that, following the revisions last year, no further changes were required.
The remuneration policy is designed to attract and retain executive directors and to motivate them
in delivering the objectives of the Company. The underlying principle is that employee and director
share ownership is encouraged, and the remuneration policy provides opportunity to reward
employees who have met their financial targets and contributed to the wider success of the
business. This is achieved through the award of share options. This links their personal interest to
the success of the company.
Derek Joseph – Chairman of the Remuneration Committee
26 June 2019
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Aquila Services Group plc
Directors’ Remuneration Report
The information provided on pages 21 to 30 of the Directors’ Remuneration Report is subject to
audit.
Annual Report on Remuneration
The directors followed the remuneration policy that was agreed at the AGM in 2018.
The remuneration of the executive directors is made up as follows:
Directors’ remuneration as a single figure (2019)
Salary All taxable Annual
and fees benefits bonuses LTIP Pension Total
£ £ £ £ £ £
Steven Douglas 140,000 1,050 22,400 – 8,400 171,850
Fiona Underwood 140,000 1,232 22,400 – 8,400 172,032
Susan Kane 42,000 1,232 6,720 – – 49,952
———— ———— ———— ———— ———— ————
322,000 3,514 51,520 – 16,800 393,834
———— ———— ———— ———— ———— ————
Directors’ remuneration as a single figure (2018)
Salary All taxable Annual
and fees benefits bonuses LTIP Pension Total
£ £ £ £ £ £
Steven Douglas 110,000 1,169 15,000 – 6,300 132,469
Fiona Underwood 110,000 1,389 15,000 – 6,300 132,689
Susan Kane 59,950 1,389 – – – 61,339
———— ———— ———— ———— ———— ————
279,950 3,947 30,000 – 12,600 326,497
———— ———— ———— ———— ———— ————
The remuneration of the non-executive directors is made up as follows:
Non-executive directors’ remuneration as a single figure (2019)
Salary All taxable Annual
and fees benefits bonuses LTIP Pension Total
£ £ £ £ £ £
Derek Joseph* 62,756 – – – – 62,756
Richard Wollenberg 4,000 – – – – 4,000
Jeffrey Zitron 3,332 – – – – 3,332
———— ———— ———— ———— ———— ————
70,088 – – – – 70,088
———— ———— ———— ———— ———— ————
*Included within the fees for Derek Joseph are £52,756 of consultancy fees.
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Aquila Services Group plc
Directors’ Remuneration Report
Non-executive Directors’ remuneration as a single figure (2018)
Salary All taxable Annual
and fees benefits bonuses LTIP Pension Total
£ £ £ £ £ £
Derek Joseph* 10,953 – – – – 10,953
Richard Wollenberg 4,000 – – – – 4,000
Jeffrey Zitron 5,107 – – – – 5,107
———— ———— ———— ———— ———— ————
20,060 – – – – 20,060
———— ———— ———— ———— ———— ————
*Included within the fees for Derek Joseph are £4,620 of consultancy fees.
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 ATFS 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.
2.
An unconsolidated bonus award of up to 30% of basic salary, and
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 2018 revised policy, was to achieve
the Group’s 2017/2018 outturn (reported profit before tax and exceptional items) plus 10%,
adjusted for any one-off costs and expenses.
2018/19 Award
RemCo assessed the performance of the Group executive directors against the target and the
Committee’s decision is shown below.
Target 2018/19 2018/19
Performance Unconsolidated Unconsolidated
(Aquila 2018 Maximum bonus award – bonus award –
profit increased Actual Possible Co-Chief Group Finance
by 10%1) Performance award Executives Director
Cash based award £729,670 £726,568 £42,000 £22,400 £6,720
Share option award £729,670 £726,568 £100,000 Nil Nil
share options share options share options
The Committee believes that the reward payable is a fair reflection of the performance over the
year.
1 Profit before tax and excluding share option charge
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Aquila Services Group plc
Directors’ Remuneration Report
Statement of directors’ shareholding and share interest
The total number of directors’ interests in shares as at 31 March 2019 is set out below:
Number of shares
Richard Wollenberg2 3,808,406
Susan Kane 3,279,440
Fiona Underwood 3,279,440
Steven Douglas 3,144,305
Derek Joseph 3,005,538
Share options have been granted to two directors during the year. 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 Without Exercised
performance performance Vested but during the
measures measures3 unexercised4 year
Richard Wollenberg – – 515,000 –
Steven Douglas 50,000 100,000 615,050 –
Susan Kane – 100,000 615,050 –
Fiona Underwood 50,000 100,000 615,050 –
Derek Joseph – – 309,000 –
Jeffrey Zitron – – 300,000 –
Payments to past directors
In the year ended 31 March 2019, 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 2019.
2 Includes shares held by immediate family members of Richard Wollenberg
3 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. For each
director, 275,050 of these share options are vested.
4 The Unapproved Options may be exercised at any time up to 20 July 2020
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Aquila Services Group plc
Directors’ Remuneration Report
The information provided on pages 21 to 30 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. Aquila operate in a niche sector with very few comparisons and as such
the Directors believe that the FTSE All Share Index provides the best measure on which to assess
the Directors performance.
Company
FTSE-All Share
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Data source: London Stock Exchange
Remuneration of Co-Chief Executive Officers
Total Annual Shares
Remuneration bonuses receivable Total
£ £ £ £
Steven Douglas 140,000 22,400 – 162,400
Fiona Underwood 140,000 22,400 – 162,400
Percentage change in remuneration of directors undertaking role of chief executive
The total percentage increase from 2017 to 2018 is set out below.
Total
Remuneration
Percentage increase
Steven Douglas 22%
Fiona Underwood 22%
The total percentage increase from 2018 to 2019 for all staff was 5%.
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Aquila Services Group plc
Directors’ Remuneration Report
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 2018 and 31 March 2019.
2019 2018 Change
£ £ %
All employee remuneration 3,604,701 2,943,663 23%
Total dividend per share 0.891p 0.81p 10%
Distributions to shareholders 314,117 285,650 10%
Gender pay gap report
The Group is not required by law to report on its gender pay figure but recognises the importance
of openness and transparency. The Group’s mean and median pay gap figures for the years ended
31 March 2018 and 31 March 2019 are as follows:
n Women’s hourly mean rate is 21% lower than men’s for 2019 (2018: 7.8% lower)
n Women’s hourly median rate is 14% lower than men’s for 2019 (2018: 3% lower)
This is compared to national average figures of a 14.3% mean gap and an 8.6% median.
The Group is committed to exploring the reasons for the pay gap and will review its HR and reward
strategy, pay structures and associated policies to address any issues and proactively engage in
practical solutions to address the gap.
The Group is also committed to creating an ethnically diverse organisation. From this year, the
Group will start to monitor its ethnicity pay gap figures, related recruitment activities and talent
development opportunities to ensure that it is creating prospects for diverse talent pools.
Employees
The Group is committed to creating an environment where its staff feel engaged and motivated in
their roles. It is by default a learning organisation where people can gain new knowledge skills and
experience through the work that they deliver. It also offers staff learning and development
opportunities and the chance to communicate their views through the annual survey. The results of
which are actively considered by the directors and leadership team.
The Group ensures that it complies with its legislative requirements in relation to employment law.
Consideration by the directors of matters relating to directors’ remuneration
No advice or services were given that materially assisted the committee in their consideration of the
remuneration policy.
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Aquila Services Group plc
Directors’ Remuneration Report
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 year ended 31 March 2018 was approved by
shareholders at the Annual General Meeting held on 31 July 2018. The Directors’ Remuneration
Policy was last approved by shareholders at the Annual General Meeting held on 31 July 2018.
Directors’ Remuneration Report (2018 Annual General Meeting) % of votes cast
For 99.98%
Against 0%
Abstention 0.02%
————
Total votes cast 100%
————
Directors’ Remuneration Policy (2017 Annual General Meeting) % of votes cast
For 100%
Against 0%
————
Total votes cast 100%
————
Policy Report
The remuneration policy was updated in 2018 to reflect changes due to continued growth of the
Group. All the provisions within the previous policy continue to apply, the amendments to the
previous policy are not considered material to the Group. The changes are within pensions and
annual bonuses (performance criteria) as set out in the table below.
Future policy table
The following tables provides a summary of the key components of the remuneration package for
executive directors:
Purpose
Operation
Performance Criteria
Salary
and fees
To provide competitive
fixed elements of
reward which can
attract and retain high
calibre individuals with
the appropriate skills
and knowledge to
deliver the Group’s
strategy.
Salaries are reviewed annually or when an
individual changes position or responsibility.
Assessment of personal and
corporate performance.
The committee will also consider the skills,
experience and on-going performance of
individuals when deciding on any changes to
their basic salary.
All taxable
benefits
To provide a range of
cost-effective benefits
which are in-line with
the market.
The main benefits include private medical
insurance and death in service benefit of four
times salary.
The committee may wish to introduce other
benefit provisions from time-to-time.
None
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Aquila Services Group plc
Directors’ Remuneration Report
Purpose
Operation
Performance Criteria
None
1. Up to 15% can be
awarded for a year-on-
year increase in reported
profit before tax and
exceptional items
adjusted for any Group
costs and expenses
year-on-year growth.
2. Up to 30% can be
awarded for an
achievement of 10%
increase in reported profit
before tax and
exceptional items year-
on-year adjusted for any
Group costs and
expenses.
3. To take account of further
growth within the Group
individual subsidiary
reported profit for the year
of acquisition is used as
the baseline for those
executive directors.
1. Share option awards are
measured against an
increase in reported profit
before tax and
exceptional items
year-on-year adjusted for
any Group costs and
expenses.
2. To take account of further
growth within the Group
individual subsidiary
reported profit for the year
of acquisition is used as
the baseline for those
staff within each
subsidiary.
Pensions
To provide cost-
effective long-term
retirement
arrangements
Annual
bonuses
To incentivise and
reward for
achievement of in-year
objectives linked to the
performance of the
Group and the
individual subsidiaries.
Contributions of 6% of salary is available to all
staff. There is no differential for executive
directors.
A salary sacrifice scheme is available for staff
should they wish to increase their personal
contributions.
Executive directors can opt-out of the company
pension scheme seeking to plan for their
retirement.
Executive directors are eligible for an annual
bonus of up to 30% of their annual salary
(unconsolidated award) upon achievement of
company/subsidiary targets.
Half of the executive directors’ annual bonus may
be paid into a Long-Term Incentive Plan (LTIP) at
the discretion of the Remuneration Committee,
which will earn a rate of interest equivalent to a
bank deposit and can be drawn, on a rolling
basis, after a minimum of three years. Early
release or penalties will be relevant to leavers
depending on the circumstances.
Share
options
To incentivise and
reward for the
achievement of
long-term
performance, aligned
to the generation of
shareholder value.
An annual grant of share options, which vest after
three years subject to continued service and the
achievement of targets.
Upon the achievement of the target executive
directors will be entitled to a share option award
which is the equivalent of one third the reported
profit (before tax and exceptional items) of the
individual subsidiary companies. The number of
share options available for distribution is
determined from the mid-market price on the day
the results are published.
The committee can, on the recommendation of
the executive directors, award share options to
individual members of staff to reward exceptional
performance. Any share options awarded to staff
must be included within the one-third reported
profit distribution for each subsidiary.
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Aquila Services Group plc
Directors’ Remuneration Report
Approach to recruitment remuneration
The Committee’s approach to recruitment remuneration is to offer a market competitive
remuneration package sufficient to attract high calibre candidates who are appropriate to the role
but without paying any more than is necessary.
Any new executive director’s remuneration would include the same elements and be in line with the
policy set out in this Report.
Service contracts of executive directors
All executive directors have a service contract. The contract can be terminated by either party upon
giving six months’ notice in writing. The contracts are available for inspection at the company’s
offices.
Illustration of application of remuneration policy
The chart below illustrates the remuneration that would be paid to each of the Executive Directors
under three different performance scenarios: (i) Minimum; (ii) On-target; and (iii) Maximum.
The elements of remuneration have been categorised into two components: (i) Fixed; and
(ii) Annual variable (annual bonus awards);
Co-Chief Executive Directors
Maximum
On Target
Minimum
£145,000
74%
£145,000
83%
£145,000
94%
0
0
7
,
8
£
%
4
£43,500
22%
0
0
7
,
8
£
%
5
£21,750
12%
0
0
7
,
8
£
%
6
£-
£50,000
£100,000
£150,000
£200,000
£250,000
Salary
Pension
Annual Bonus
The remuneration is based on the following assumptions.
That the base salary of the co-chief executives is at £145,000 pa. That the pension contribution is
6% of salary and that bonuses are based on 15% and 30% of salary as indicated in the
remuneration policy.
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Aquila Services Group plc
Directors’ Remuneration Report
Group Finance Director
Maximum
On Target
£42,000
77%
£42,000
87%
£12,600
23%
£6,300
13%
Minimum
£42,000
Salary
Annual Bonus
£-
£10,000
£20,000
£30,000
£40,000
£50,000
£60,000
The remuneration for the Group Finance Director for the year ended 31 March 2019 is based on
the following assumptions.
That the base salary of the Group Finance Director remains at 2 days per week. That pension
contributions are nil and that bonuses are based on 15% and 30% of salary as indicated in the
remuneration policy.
Policy on payment for loss of office
Payments for loss of office would be determined by the remuneration committee taking into account
contractual obligations.
Statement of consideration of employment conditions elsewhere in the Group
The Committee has not consulted with its employees on executive pay but is aware of the pay and
employment benefits across the wider Group. The wider benefits package available to staff is
reflected within the remuneration package for executive directors, the exceptions being the level of
bonus awarded and long-term share options.
Statement of consideration of shareholder views
The Committee will consider shareholder feedback received at the AGM and during meetings with
shareholders and investors throughout the year and will use these views to formulate any changes
to the remuneration policy.
Derek Joseph – Chairman
26 June 2019
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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 2) 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:
n select suitable accounting policies and then apply them consistently;
n make judgements and estimates that are reasonable and prudent;
n present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information;
n state whether IFRSs as adopted by the European Union have been followed, subject to any
material departures disclosed and explained in the financial statements;
n 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
n 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.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
We confirm that to the best of our knowledge:
n 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
n 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.
Dr Fiona Underwood – Chief Executive Altair and Company Secretary
On behalf of the Board
26 June 2019
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Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
Opinion
We have audited the financial statements of Aquila Services Group Plc (the ‘Parent Company’) and
its subsidiaries (together the ‘Group’) for the year ended 31 March 2019 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of
Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of
Changes in Equity, the Consolidated Statement of Cash Flows, the Company Statement of Cash
flows and notes to the financial statements, including a summary of significant accounting policies.
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.
In our opinion, the financial statements:
n give a true and fair view of the state of affairs of the Group and of the Parent Company as at
31 March 2019 and of the Group’s profit for the year then ended;
n have been properly prepared in accordance with International Financial Reporting Standards
as adopted by the European Union;
n have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent
of the Group and the Parent Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require
us to report to you when:
n The directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
n The directors have not disclosed in the financial statements any identified material
uncertainties that may cast significant doubt about the Group’s or the Parent Company’s
ability to continue to adopt the going concern basis of accounting for a period of at least
twelve months from the date when the financial statements are authorised for issue.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered
material if it could reasonably be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both focus our testing and to evaluate
the impact of misstatements identified.
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Independent Auditor’s Report to the Members of Aquila Services Group plc
Based on our professional judgement, we determined overall materiality for the financial
statements as a whole to be £75,000 (FY18 £59,000), based on a percentage of revenue.
We use a different level of materiality (‘performance materiality’) to determine the extent of our
testing for the audit of the financial statements. Performance materiality is set based on the audit
materiality as adjusted for the judgements made as to the entity risk and our evaluation of the
specific risk of each audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as,
for related party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £4,000
(2018: £2,950). Errors below that threshold would also be reported to it if, in our opinion as auditor,
disclosure was required on qualitative grounds.
Overview of the scope of our audit
We audit the Parent Company and its Subsidiary Companies. Our audit approach was developed
by obtaining an understanding of the Group’s activities, the key functions undertaken on behalf of
the Board by management and the overall control environment. Based on this understanding we
assessed those aspects of the Group and Subsidiary Companies transactions and balances which
were most likely to give rise to a material misstatement and were most susceptible to irregularities
including fraud or error. Specifically, we identified what we considered to be key audit matters and
planned our audit approach accordingly.
We gained an understanding of the legal and regulatory framework applicable to the Group and the
industry in which it operates, and considered the risk of acts by the Group which were contrary to
applicable laws and regulations, including fraud. These included but were not limited to compliance
with Companies Act 2006, the FCA listing, the principles of the UK Corporate Governance Code,
and IFRS.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or
through collusion.
We focused on laws and regulations that could give rise to a material misstatement in the Company
financial statements. Our tests included, but were not limited to:
n agreement of the financial statement disclosures to underlying supporting documentation;
n enquiries of management;
n review of minutes of Board meetings throughout the period; and
n considering the effectiveness of control environment in monitoring compliance with laws and
regulations.
There are inherent limitations in the audit procedures described above and the further removed
noncompliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it. As in all of our audits we also
addressed the risk of management override of internal controls, including testing journals and
evaluating whether there was evidence of bias by the Directors that represented a risk of material
misstatement due to fraud.
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Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
How the scope of our audit addressed
Key audit matter the key audit matter
and
Our audit work included but was not restricted to:
Revenue
completeness
recognition
The revenue recognised in the
financial statements may be
understated and not recognised
in accordance with the relevant
accounting standard and the
Group’s accounting policy.
Changes in financial reporting
standards may not be correctly
the Group’s
reflected
accounting policy or treatment.
in
Carrying value of goodwill
on
the
Goodwill on consolidation or
arising
historical
purchase of the trade and assets
of another entity may not be
carried at the correct value and
may be impaired.
n Analytical procedures over revenue;
n Substantive transactional testing of income recognised
in the financial statements;
n
Testing of revenue streams recorded near the year end
to ensure appropriate period recognition;
n Evaluating the client’s system for managing and
accounting for revenue; and
the
Considered
consistency and compliance against
accounting standards.
revenue
recognition policies
for
the relevant
We reviewed management’s assessment of the basis for
the recognition and carrying value of goodwill with
particular focus on current performance, key assumptions
used and the integrity of the underlying valuation model.
We considered management’s choice of assumptions
based on past and current performance as well as re-
performing the calculation.
Our audit procedures in relation to these matters were designed in the context of our audit opinion
as a whole. They were not designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
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Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on 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 our audit
n 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
n the directors’ report and strategic report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
n adequate accounting records have not been kept by the Group or the Parent Company, or
returns adequate for our audit have not been received from branches not visited by us; or
n the financial statements and the part of the directors’ remuneration report to be audited are
not in agreement with the accounting records and returns; or
n certain disclosures of directors’ remuneration specified by law are not made; or
n we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 31, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the Group or Parent Company, or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
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Aquila Services Group plc
Independent Auditor’s Report to the Members of Aquila Services Group plc
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Audit Committee on 21 March 2019 to audit the financial statements for
the period ending 31 March 2019. Our total uninterrupted period of engagement is less than a year,
covering the period ended 31 March 2019.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group
and we remain independent of the Group in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Parent 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 Parent Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Rhodri Whitlock (Senior Statutory Auditor)
For and on behalf of
Crowe U.K. LLP
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
26 June 2019
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Aquila Services Group plc
Consolidated statement of comprehensive income
For the year ended 31 March 2019
2019 2018
Notes £ £
Revenue 4 7,655,632 5,905,221
Cost of sales 5 (5,788,472) (4,343,456)
–––––––––– ––––––––––
Gross profit 1,867,160 1,561,765
Administrative expenses 5 (1,259,523) (1,037,287)
–––––––––– ––––––––––
Operating profit 607,637 524,478
Finance income 4 1,860 3,596
–––––––––– ––––––––––
Profit before taxation 6 609,497 528,074
Income tax expense 8 (143,460) (123,390)
–––––––––– ––––––––––
Profit for the year 466,037 404,684
Other comprehensive income – –
–––––––––– ––––––––––
Total comprehensive income for the year 466,037 404,684
–––––––––– ––––––––––
Earnings per share attributable to owners
of the parent
Basic 9 1.32p 1.20p
Diluted 9 1.15p 1.05p
The income statement has been prepared on the basis that all operations are continuing
operations.
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Aquila Services Group plc
Consolidated and Company statements of financial position
As at 31 March 2019
Group Group Company Company
2019 2018 2019 2018
As restated As restated
Notes £ £ £ £
Non-current assets
Goodwill 10 2,027,688 2,027,688 – –
Property, plant and equipment 11 72,270 95,747 37,548 58,967
Investment in subsidiaries 12 – – 2,817,930 2,700,859
Investment in associates 13 226,620 226,620 226,620 226,620
Investments 14 121,104 121,104 121,104 121,104
–––––––––– –––––––––– –––––––––– ––––––––––
2,447,682 2,471,159 3,203,202 3,107,550
Current assets
Trade and other receivables 15 2,193,927 2,109,678 1,084,914 1,127,499
Cash and bank balances 1,719,068 969,987 334,563 343,269
–––––––––– –––––––––– –––––––––– ––––––––––
3,912,995 3,079,665 1,419,477 1,470,768
–––––––––– –––––––––– –––––––––– ––––––––––
Current liabilities
Trade and other payables 16 1,594,632 1,094,690 672,895 616,971
Corporation tax 162,691 141,775 – –
–––––––––– –––––––––– –––––––––– ––––––––––
1,757,323 1,236,465 672,895 616,971
–––––––––– –––––––––– –––––––––– ––––––––––
Net current assets 2,155,672 1,843,200 746,582 853,797
–––––––––– –––––––––– –––––––––– ––––––––––
Net assets 4,603,354 4,314,359 3,949,784 3,961,347
–––––––––– –––––––––– –––––––––– ––––––––––
Equity
Share capital 17 1,765,389 1,763,273 1,765,389 1,763,273
Share premium account 18 1,487,512 1,487,512 1,487,512 1,487,512
Merger reserve 18 2,412,861 2,412,861 – –
Share-based payment reserve 20 667,878 557,653 667,878 557,653
Retained (losses)/earnings (1,730,286) (1,906,940) 29,005 152,909
–––––––––– –––––––––– –––––––––– ––––––––––
Equity attributable to the owners
of the parent 4,603,354 4,314,359 3,949,784 3,961,347
–––––––––– –––––––––– –––––––––– ––––––––––
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 £165,479 (2018: £299,704).
The financial statements were approved by the board on 26 June 2019.
Susan Kane – Group Finance Director
Company Registration No. 08988813
38
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171093 Proof 4 Wednesday, June 26, 2019
14:31
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171093 Proof 4 Wednesday, June 26, 2019
14:31
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171093 Proof 4 Wednesday, June 26, 2019
14:31
Aquila Services Group plc
Consolidated statement of cash flow
For the year ended 31 March 2019
2019 2018
£ £
Cash flows from operating activities
Profit for the year 466,037 404,684
Interest received (1,860) (3,596)
Income tax expense 143,460 123,390
Share based payment charge 117,071 135,262
Depreciation 51,692 31,639
–––––––––– ––––––––––
Operating cash flows before movement in working capital 776,400 691,379
Increase in trade and other receivables (84,249) (759,491)
Increase in trade and other payables 565,712 76,997
–––––––––– ––––––––––
Cash generated by operations 1,257,863 8,885
Income taxes paid (122,544) (116,368)
–––––––––– ––––––––––
Net cash inflow/(outflow) from operating activities 1,135,319 (107,483)
–––––––––– ––––––––––
Cash flows from investing activities
Interest received 1,860 3,596
Purchase of property, plant and equipment (28,215) (76,827)
Acquisition of goodwill – (625,000)
Acquisition of investment in an associate (65,770) (160,850)
Acquisition of investment – (121,104)
–––––––––– ––––––––––
Net cash outflow from investing activities (92,125) (980,185)
–––––––––– ––––––––––
Cash flows from financing activities
Proceeds of share issue 2,116 –
Dividends paid (296,229) (254,945)
–––––––––– ––––––––––
Net cash outflow from financing activities (294,113) (254,945)
–––––––––– ––––––––––
Net increase/(decrease) in cash and cash equivalents 749,081 (1,342,613)
Cash and cash equivalents at beginning of the year 969,987 2,312,600
–––––––––– ––––––––––
Cash and cash equivalents at end of the year 1,719,068 969,987
–––––––––– ––––––––––
41
171093 Proof 4 Wednesday, June 26, 2019
14:31
Aquila Services Group plc
Company statement of cash flow
For the year ended 31 March 2019
2019 2018
£ £
Cash flows from operating activities
Profit for the year 165,479 299,704
Dividends received (380,731) (410,820)
Interest received (1,342) (1,082)
Income tax expense 206 205
Depreciation 21,421 5,355
–––––––––– ––––––––––
Operating cash flows before movement in working capital (194,967) (106,843)
Decrease/(increase) in trade and other receivables 42,585 (42,452)
Increase in trade and other payables 121,694 333,821
–––––––––– ––––––––––
Cash (outflow)/generated by operations (30,688) 184,526
Income taxes paid (207) –
–––––––––– ––––––––––
Net cash (outflow)/inflow from operating activities (30,895) 184,526
–––––––––– ––––––––––
Cash flows from investing activities
Interest received 1,342 1,082
Dividends received 380,731 410,820
Purchase of property, plant and equipment – (64,322)
Acquisition of investment in an associate (65,770) (160,850)
Acquisition of investment – (121,104)
–––––––––– ––––––––––
Net cash inflow from investing activities 316,303 65,626
–––––––––– ––––––––––
Cash flows from financing activities
Proceeds of share issue 2,115 –
Dividends paid (296,229) (254,945)
–––––––––– ––––––––––
Net cash outflow from financing activities (294,114) (254,945)
–––––––––– ––––––––––
Net decrease in cash and cash equivalents (8,706) (4,793)
Cash and cash equivalents at beginning of the year 343,269 348,062
–––––––––– ––––––––––
Cash and cash equivalents at end of the year 334,563 343,269
–––––––––– ––––––––––
42
171093 Proof 4 Wednesday, June 26, 2019
14:34
Aquila Services Group plc
Notes to the financial statements
For the year ended 31 March 2019
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 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 functional and
presentational currency of all companies within the group.
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
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 could 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 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.
43
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Business combinations
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
The group earns income from the following principal services:
• Revenue from consultancy services
• Revenue from interim management
• Revenue from treasury management
For all these principal services, revenue represents amounts recoverable from clients for
professional services provided during the year. Revenue is measured based on the
consideration to which the Group expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties.
Revenue is recognised when control of a product or service is transferred to a customer.
Revenue from fixed fee assignments is recognised over a period of time by reference to the
stage of completion of the actual services provided at the reporting date, as a proportion of
the total services to be provided because the customer receives and uses the benefits
simultaneously. This is determined based on the actual labour hours spent relative to the total
expected labour hours.
Time and materials assignments are recognised as services are provided at the fee rate
agreed with the client. Unbilled revenue on individual client assignments is classified as
accrued income for client work within trade and other receivables. Where individual on-
account billings exceed recognised revenue on a client assignment, the excess is classified
as contract liabilities for client work within trade and other payables.
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 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
44
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Property, plant and equipment (continued)
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.
Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a
subsidiary nor an interest in a joint venture. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is not control over those
policies.
The results and assets and liabilities of associates are incorporated in these financial
statements using the equity method of accounting. Under the equity method, an investment
in an associate is initially recognised in the consolidated statement of financial position at
cost and adjusted thereafter to recognise the Group’s share of profit or loss and other
comprehensive income of the associate.
An investment in an associate is accounted for using the equity method from the date on
which the investee becomes an associate. On acquisition of the investment in an associate,
any excess of cost over the Group’s share of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill, which is included in the carrying amount
of the investment.
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
Financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’ (FVTPL) and ‘amortised cost’. The classification depends on the
financial asset’s contractual cash flow characteristics and the Group’s business model for
managing them and is determined at the time of initial recognition. Financial assets with cash
flows that are not solely payments of principal and interest are classified and measured at fair
value through profit or loss, irrespective of the business model.
45
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Amortised cost
Financial assets at amortised cost
These assets are held within a business model whose objective is to collect contractual cash
flows which are solely payments of principals and interest and therefore classified as
subsequently measured at amortised cost. With the exception of trade receivables which are
initially measured at transaction price determined in accordance with IFRS 15, financial
assets at amortised cost are initially recognised at fair value plus transaction costs that are
directly attributable to their acquisition, and are subsequently carried at amortised cost using
the effective interest rate method, less provision for impairment. The Group’s financial assets
measured at amortised cost comprise trade and other receivables and cash and cash
equivalents. Cash comprises cash in hand and deposits repayable on demand, less
overdrafts payable on demand which have a right of offset against cash balances. These
instruments are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
Financial assets at fair value through profit or loss
Assets that do not meet the criteria for amortised cost are measured at FVPL. A gain or loss
on a debt investment that is subsequently measured at FVPL is recognised in profit or loss
and presented net within other gains/(losses) in the period in which it arises. The Group’s
financial assets measured at FVPL comprise unquoted equity investments.
Impairment of financial assets
Impairment provisions for current and non-current trade receivables are recognised based
on the simplified approach within IFRS 9 using a provision matrix in the determination of
credit losses. During this process the probability of the non-payment of the trade receivable
is assessed. This probability is then multiplied by the amount of the expected loss arising
from default to determine the expected credit loss for the trade receivables. Provisions are
recorded net in a separate provision account with the loss being recognised in the
consolidated income statement. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off against the associated
provision. Impairment provisions for receivables from related parties and loans to related
parties are recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of provision is based on whether there has been
a significant increase in credit risk since the initial recognition of the asset.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the
contractual arrangements entered into.
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. Equity instruments issued by the Group are
recorded at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘amortised cost’.
The Group does not currently hold any financial liabilities ‘at FVTPL’.
46
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
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.
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.
47
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Impairment of assets (continued)
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.
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
Equity-settled share-based payments to employees and directors are measured at the fair
value of the equity instruments at grant date. The fair value excludes the effect of non-
market-based vesting conditions.
The fair value determined at the grant date of the equity-settled share based-payments is
expensed on a straight-line basis over the vesting period, based on the Group’s estimate of
equity instruments that will eventually vest. At each balance sheet date, the Group revises
the estimate of the number of equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of the original estimates, if
any, is recognised in profit or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
48
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Restatement
The directors have reconsidered the Group’s accounting policy choice in respect of
acquisitions which fall within merger relief provisions. The directors consider that the parent
company financial statements better reflect the impact of the acquisition by not recording an
amount equivalent to share premium as a merger relief reserve. The consequences of
change of accounting policy choices are that within the parent Company’s balance sheet the
merger relief reserve of £7.18m is eliminated and the cost of investment in subsidiaries is
reduced by an equivalent amount. The impact on the Group accounts is in effect a
re-designation of reserves such that the reverse acquisition reserve eliminates, and the
merger reserve is reported as a credit of £2.41m.
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:
• IFRS 2 (amendments) Classification and Measurement of Share-based Payment
Transactions*
• IFRS 9 Financial Instruments*
• IFRS 15 (amendments) Revenue from Contracts with Customers*
• IFRIC 22 Foreign Currency Transactions and Advance Consideration*
*Effective for annual periods beginning on or after 1 January 2018
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.
• IFRS 16 Leases**
• IFRIC 23 Uncertainty over Income Tax Treatments**
• IAS 28 (amendments) Long-term Interests in Associates and Joint Ventures**
• Annual improvements 2015-2017 cycle**
**Effective for annual periods beginning on or after 1 January 2019
The directors have assessed the impact of the standards in issue but not yet effective and
have noted below their conclusions on the key new standards.
IFRS 16 (latest amendment issued in January 2016) introduces a new basis for the
accounting of leases. It is effective for all accounting periods beginning on or after 1 January
2019.
49
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
2 Accounting policies (continued)
Standards issued but not yet effective (continued)
The directors have considered the potential impact of IFRS 16 Leases for the accounting
period beginning on 1 January 2019 for all existing lease agreements. At present, the existing
lease agreements are either of too short a nature or too low a value to qualify for a transitional
change. The directors are aware that the new standard may impact future lease agreements
and will account for any new agreements in line with IFRS 16 Leases.
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
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 (note 4).
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 considered 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 (note 20).
50
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
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.
Valuation of unquoted investments
The Group determines the fair value of these financial instruments using recent transactions
or valuation models if information about recent transactions is not available. The values
derived from applying these models are significantly impacted by the choice of the valuation
model used and the underlying assumptions made, such as the amounts and timing of future
cash flows, discount rates, volatility and credit risk.
Management reviewed information available at 31 March 2019 and concluded that there is
both insufficient more recent information available to measure fair value and there is a wide
range of possible fair value measurements as such cost is considered to be an appropriate
estimate of fair value.
4 Revenue and Finance income
An analysis of the Group’s revenue is as follows:
2019 2018
£ £
Continuing operations – rendering of services
Specialist housing consultancy income 7,086,961 5,320,054
Treasury management consultancy income 568,671 585,167
—————– —————–
7,655,632 5,905,221
—————– —————–
Finance income is comprised of:
Interest revenue on bank deposits 1,860 3,596
—————– —————–
7,657,492 5,908,817
—————– —————–
51
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
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. In accordance with IFRS8 ‘Operating Segments’, information on segment assets
is not shown, as this is not provided to the chief operating decision-maker.
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 authorities) across the housing
sector. Most consultancy projects run over one to two months and on-going business
development is required to ensure a full pipeline of consultancy work for the employed team.
Interim Management – individuals are embedded within housing organisations (normally
housing associations, local authorities and ALMOs) in a substantive role, normally for a
specified period. 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 several client organisations enter 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.
2019 2018
£ £
Revenue from Consultancy 5,867,295 4,214,909
Revenue from Interim management 1,219,668 1,152,950
Revenue from Treasury management 568,669 537,362
—————– —————–
7,655,632 5,905,221
Cost of sales from Consultancy 4,381,010 3,036,105
Cost of sales from Interim management 1,009,498 914,801
Cost of sales from Treasury management 397,964 392,550
—————– —————–
5,788,472 4,343,456
Gross profit from Consultancy 1,486,285 1,178,804
Gross profit from Interim management 210,170 238,149
Gross profit from Treasury management 170,705 144,812
—————– —————–
1,867,160 1,561,765
Administrative expenses (1,259,523) (1,037,287)
—————– —————–
Operating profit 607,637 524,478
—————– —————–
52
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
5 Operating segments (continued)
Within consultancy revenues, approximately 6% (2018: 3%) has arisen from the segment’s
largest customer; within interim management 12% (2018: 14%); within treasury management
34% (2018: 46%).
Geographical information
Revenues from external customers, based on location of the customer, are shown below:
2019 2018
£ £
UK 7,179,360 5,530,360
Republic of Ireland 305,008 298,212
Rest of World 171,264 76,649
—————– —————–
7,655,632 5,905,221
—————– —————–
6 Profit before taxation
2019 2018
£ £
Profit before taxation is arrived at after charging:
Auditors’ remuneration 37,750 37,975
Depreciation of property, plant and equipment 51,692 31,639
Staff costs (see note 7) 4,270,476 2,943,663
Operating lease costs – land and buildings 41,882 49,605
—————– —————–
7 Staff costs
2019 2018
The average monthly number of employees (including directors)
employed by the Group was: 52 40
2019 2018
£ £
Aggregate remuneration (including directors)
Wages and salaries 3,604,701 2,436,180
Share-based payments 117,071 135,262
Pension contributions 161,003 96,160
Social security costs 387,701 276,061
—————– —————–
4,270,476 2,943,663
—————– —————–
2019 2018
£ £
Directors’ remuneration
Salary (including taxable benefits) 389,752 333,957
Share-based payments 43,440 65,871
Pension contributions 16,800 12,600
—————– —————–
449,992 412,428
—————– —————–
53
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
7 Staff costs (continued)
Two directors are members of the company’s defined contribution pension scheme.
The amounts set out above include remuneration to the highest paid director as follows:
Salary (including taxable benefits) 161,600 126,389
Share-based payments 14,735 21,957
Pension contributions 8,400 6,300
—————– —————–
184,735 154,646
—————– —————–
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.
2019 2018
£ £
Short-term employee benefits 655,495 571,880
Share-based payments 64,232 113,000
Post-retirement benefits 21,900 17,700
—————– —————–
741,627 702,580
—————– —————–
8 Taxation
2019 2018
£ £
Corporation tax:
Current year 143,460 123,390
—————– —————–
The tax charge for the year can be reconciled to the profit in the income statement as follows:
2019 2018
£ £
Profit before taxation 609,497 528,074
Tax at the UK corporation tax rate of 19% (2018: 19%) 115,804 100,334
Expenses not deductible 27,656 23,056
—————– —————–
Tax expense for the year 143,460 123,390
—————– —————–
54
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
9 Earnings per share
Basic earnings per share is calculated by dividing the profit 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.
Details of which are set out in note 20.
2019 2018
£ £
Profit after tax attributable to owners of the parent 466,037 404,684
Weighted average number of shares
– Basic 35,272,301 33,746,926
– Diluted 40,353,113 38,429,011
Basic earnings per share 1.32p 1.20p
Diluted earnings per share 1.15p 1.05p
10 Goodwill
Group Goodwill
£
Cost
At 1 April 2017 317,688
Additions 1,710,000
—————–
At 31 March 2018 2,027,688
Additions –
—————–
At 31 March 2019 2,027,688
—————–
Accumulated impairment losses
At 1 April 2017 and 31 March 2018 –
Impairment losses for the year –
—————–
At 31 March 2019 –
—————–
Net book value
At 1 April 2017 317,688
At 31 March 2018 2,027,688
—————–
—————–
—————–
At 31 March 2019 2,027,688
Goodwill acquired in a business combination is allocated, at acquisition, to the cash
generating units that are expected to benefit from that business combination.
On 27 October 2017, the Group acquired the business of pod LLP and pod Partnership
Limited for a fair value consideration of £1,710,000, satisfied by cash consideration of
£625,000 and 2,614,458 shares issued at the market price of 41.5p per share.
The Group tests goodwill annually for impairment, or more frequently if there are any
indications that goodwill might be impaired.
55
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
10 Goodwill (continued)
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 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, this is based on past performance and expected future activity. Projected
cash flows have been discounted at a rate of 5%, this is the rate at which the bank would
likely loan cash to the Group. No terminal value has been applied. Sensitivities have been
applied to the model and an impairment would occur if the growth rate was 0% and a
discount rate of 10% was applied, it is considered that these are not reasonable possible
changes and therefore no impairment has been made.
11 Property, plant and equipment
Fixtures Computer
and fittings equipment Total
Group £ £ £
Cost
At 1 April 2017 34,339 33,371 67,710
Additions – 76,827 76,827
—————– —————– —————–
At 31 March 2018 34,339 110,198 144,537
Additions – 28,215 28,215
—————– —————– —————–
At 31 March 2019 34,339 138,413 172,752
—————– —————– —————–
Accumulated depreciation
At 1 April 2017 953 16,198 17,151
Charge for the year 11,435 20,204 31,639
—————– —————– —————–
At 31 March 2018 12,388 36,402 48,790
Charge for the year 11,435 40,257 51,692
—————– —————– —————–
At 31 March 2019 23,823 76,659 100,482
—————– —————– —————–
Net book value
At 1 April 2017 33,386 17,173 50,559
At 31 March 2018 21,951 73,796 95,747
—————– —————– —————–
—————– —————– —————–
—————– —————– —————–
At 31 March 2019 10,516 61,754 72,270
56
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
11 Property, plant and equipment (continued)
Computer
equipment
Company £
Cost
At 1 April 2017 –
Additions 64,322
—————–
At 31 March 2018 64,322
Additions –
—————–
At 31 March 2019 64,322
—————–
Accumulated depreciation
At 1 April 2017 –
Charge for the year 5,355
—————–
At 31 March 2018 5,355
Charge for the year 21,419
—————–
At 31 March 2019 26,774
—————–
Net book value
At 1 April 2017 –
At 31 March 2018 58,967
—————–
—————–
—————–
At 31 March 2019 37,548
12 Investment in subsidiaries
Investments
in subsidiaries
As restated
Company £
Cost
At 1 April 2017 2,565,597
Additions 135,262
—————–
At 31 March 2018 2,700,859
Additions 117,071
—————–
At 31 March 2019 2,817,930
—————–
Accumulated impairment losses
At 1 April 2017 and 31 March 2018 –
Impairment losses for the year –
—————–
At 31 March 2019 –
—————–
Net book value
At 1 April 2017 2,565,597
At 31 March 2018 2,700,859
—————–
—————–
—————–
At 31 March 2019 2,817,930
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
12 Investment in subsidiaries (continued)
The addition of £117,071 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 2019 are as follows:
Place of
incorporation
and operation
Principal
activity
Proportion of
ownership and
voting rights held
Altair Consultancy and
England and Wales
Advisory Services Limited
Aquila Treasury and
England and Wales
Finance Solutions Limited
Specialist housing
consultancy
Treasury management
consultancy
100%
100%
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.
13 Investment in Associates
Details of the Group’s material associates at 31 March 2019 are as follows:
Place of
incorporation
and operation
Principal
activity
Proportion of
ownership and
voting rights held
3C Consultants Limited
England and Wales
IT consultancy
25%
The principal activity of the associate is seen as complementing the Group’s operations and
contributing to achieving the Group’s overall strategy.
The above associate is accounted for using the equity method in these consolidated financial
statements as set out in the accounting policies in note 2.
2019 2018
£ £
Cost of investment in associate 226,620 226,620
—————– —————–
The Group’s share of the net assets in the associate company is £25,670 (2018: £9,413).
Although the associate made a profit for the year of which £16,257 (2018: a loss of £13,710)
is attributable to Aquila, this has not been recognised in the financial statements because the
carrying value of the investment exceeds the proportion of the net assets of the associate
attributable to the Group.
Although the Group’s share of net assets in the associate is below the carrying value, no
impairment has been recorded because the associate was profitable in the year and
expected to continue to be profitable going forward.
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
13 Investment in Associates (continued)
Summarised financial information in respect of the Group’s associates are set out below:
3C Consultants Limited 2019 2018
£ £
Current assets 328,450 400,410
Non-current assets 2,996 2,210
Current liabilities (222,183) (282,983)
Non-current liabilities (6,583) (81,986)
—————– —————–
Equity attributable to the owners of the Company 102,680 37,651
Revenue 958,875 1,000,905
Profit/(loss) for the year 65,029 (54,838)
—————– —————–
—————– —————–
—————– —————–
—————– —————–
Other comprehensive income – –
Total comprehensive income 65,029 (54,838)
Dividends received from associate during the year – –
Reconciliation of the above summarised financial information to the carrying amount
recognised in the consolidated financial statements for the prior year:
2018
£
Net assets of associates 37,651
—————–
Proportion of the Group’s ownership interest in the associate 9,413
Goodwill 217,207
—————–
Carrying amount 226,620
—————–
14 Investments
2019 2018
Fair Value Hierarchy £ £
Unquoted equity investments Level 3 121,104 121,104
The Group has an 8% equity shareholding in Assetcore Limited an unquoted company.
Assetscore’s principal activity is a cloud-based platform used to manage loan security within
the affordable housing sector. As explained in Note 3, based on the information available at
the reporting date the Directors consider cost to be an appropriate estimate of fair value.
Financial instruments measured at fair value subsequent to initial recognition are grouped
into levels 1 to 3 based on the degree to which the fair value is observable, ie:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices
included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 fair value measurements are those derived from valuation techniques that include
inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
15 Trade and other receivables
Trade receivables
Group undertakings
Other receivables
Prepayments and accrued
income
Group Group Company Company
2019 2018 2019 2018
£ £ £ £
1,872,528 1,815,073 – –
– – 1,081,715 1,124,665
9,100 24,115 200 2,259
312,299 270,490 2,999 575
—————– —————– —————– —————–
2,193,927 2,109,678 1,084,914 1,127,499
—————– —————– —————– —————–
Total <30 days 30-60 days 66-90 days >90 days
£ £ £ £ £
31 March 2019 1,872,528 1,744,465 50,369 23,201 54,493
31 March 2018 1,815,073 1,650,520 – 76,495 88,058
No expected credit loss is recognised in the accounts as the amount is not material.
16 Trade and other payables
Trade payables
Other payables
Amounts owed to Group
undertakings
Taxes and social security costs
Accruals
Contract liabilities
Group Group Company Company
2019 2018 2019 2018
£ £ £ £
252,632 254,782 690 12,505
27,821 88,063 – 65,770
– – 560,205 500,000
518,504 200,487 – –
568,896 324,917 112,000 38,696
226,779 226,441 – –
—————– —————– —————– —————–
1,594,632 1,094,690 672,895 616,971
—————– —————– —————– —————–
Of the contract liability brought forward at the start of the year £226,441 (2018: £123,608)
was recognised in revenue in the year.
17 Share capital
2019 2018
£ £
Allotted, called up and fully paid
35,307,776 (2018: 35,265,461) Ordinary shares of 5p each 1,765,389 1,763,273
—————– —————–
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.
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
17 Share capital (continued)
A reconciliation of share capital, share premium account and merger reserve is set out below:
Number of Amount As Restated
Ordinary called up and Share Merger
shares fully paid premium reserve
£ £ £ £
32,651,003 1,632,550 533,235 2,412,861
2,614,458 130,723 954,277 –
—————– —————– —————– —————–
35,265,461 1,763,273 1,487,512 2,412,861
42,315 2,116 – –
—————– —————– —————– —————–
35,307,776 1,765,389 1,487,512 2,412,861
—————– —————– —————– —————–
At 31 March 2017
Issued at 41.5p per share on
27 October 2017
At 31 March 2018
Issued at 5p per share on
1 February 2019
At 31 March 2019
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. 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. 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.
As a consequence of a change in accounting policy choices in the Group accounts there has
been a re-designation of reserves (see note 2).
19 Dividends
2019 2018
Amounts recognised as distributions to equity holders £ £
Final dividend for the year ended 31 March 2018 of
0.55p per share (2017: 0.50p) 193,960 163,255
Interim dividend for the year ended 31 March 2019 of
0.29p per share (2018: 0.26p) 102,270 91,690
—————– —————–
296,230 254,945
—————– —————–
—————– —————–
of 0.6p per share (2018: 0.55p) 211,847 193,960
Proposed final dividend for the year ended 31 March 2019
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 2 August 2019 to shareholders on the Register of Members at 19 July
2019. The total recommended dividend to be paid is 0.6p per share. The payment of this
dividend will not have any tax consequences for the Group.
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
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 2019 arising from
share-based payment transactions is £117,071 (2018: £135,262).
Weighted
average
Unapproved scheme Number exercise price
Number of options outstanding at 1 April 2018 2,587,093 £0.23
Granted during period – –
Forfeited during period – –
Exercised during period – –
—————–
Number of options outstanding as at 31 March 2019 2,587,093 £0.23
—————–
Number of options exercisable as at 31 March 2019 2,587,093 £0.23
—————–
The exercise price of the options outstanding at 31 March 2019 ranges between £0.10 and
£0.42. The weighted average remaining contractual life of the options outstanding at
31 March 2019 is 1 year (2018: 2 years).
Weighted
average
EMI scheme Number exercise price
Number of options outstanding at 1 April 2018 2,077,983 £0.05
Granted during period 836,929 £0.05
Forfeited during period (21,158) £0.05
Exercised during period (42,315) £0.05
—————–
Number of options outstanding as at 31 March 2019 2,851,439 £0.05
—————–
Number of options exercisable as at 31 March 2019 1,544,511 £0.05
—————–
The weighted average remaining contractual life of the options outstanding at 31 March 2019
is 6 years (2018: 7 years).
On 1 September 2018, the Company granted 736,929 options to certain employees and
directors of the Group at an exercise price of 5p. The options are exercisable between
1 September 2021 and 31 August 2028. The weighted average fair value of the options at
grant date was £0.3720. 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 £0.415
Exercise price £0.05
Expected volatility 17.80%
Expected option life 10 years
Risk-free rate 1.5%
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
20 Share-based payment transactions (continued)
On 29 January 2019, the Company granted 100,000 options to two directors of the Group at
an exercise price of 5p. The options are exercisable between 29 January 2022 and
28 January 2029. The weighted average fair value of the options at grant date was £0.2753.
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 £0.32
Exercise price £0.05
Expected volatility 18.84%
Expected option life 10 years
Risk-free rate 1.1%
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.
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:
2019 2018
£ £
Within one year 21,524 49,650
In the second to fifth years inclusive – 21,524
—————– —————–
21,524 71,174
—————– —————–
Operating lease payments represent rentals payable by the Group for certain of its office
properties.
22 Related party disclosures
Balances and transactions between the Group and other related parties are disclosed below:
Dividends totalling £137,609 (2018: £171,722) were paid in the year in respect of Ordinary
Shares held by the Company’s directors.
During the year the Group charged £10,000 (2018: £12,327) to DMJ Consultancy Services
Limited for administrative services, a company in which Derek Joseph serves as a director.
At 31 March 2019, the balance owed to the Group by DMJ Consulting Limited was £Nil
(2018: £5,000).
At 31 March 2019, the balance owed to Richard Wollenberg for services as a non-executive
director were £4,500 (2018: £4,000).
23 Control
In the opinion of the Directors there is no single ultimate controlling party.
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
24 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 2019 year-
end £148,103 (2018: £121,626) is due from one customer. There are no other customers that
represent more than 7% 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 enough 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 £1,719,068 (2018: £969,987) 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.
The Groups’ objective when managing capital is to safeguard the Group’s ability to continue
as a going concern in order to provide return for shareholders, benefits for other stakeholders
and to maintain optimal capital structure and to reduce the cost of capital.
In order to ensure an appropriate return for shareholder capital invested in the Group,
management thoroughly evaluates all material projects and potential acquisitions and has
them approved by the Board of Directors where applicable.
The Group monitors capital on a short- and medium-term view. 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.
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Aquila Services Group plc
Notes to the financial statements (continued)
For the year ended 31 March 2019
25 Post Balance Sheet event
On 11 June the Group acquired the entire share capital of Oaks Consultancy Limited, the
total consideration for the purchase, including the maximum payment for meeting targets
over the next two financial years will not exceed £1.7m of which 35% is cash and 65% new
ordinary shares.
26 Capital commitments
There were no capital commitments at 31 March 2019.
27 Contingent liabilities
There were no contingent liabilities at 31 March 2019.
65
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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 24 July 2019 at 3:00 pm, for
the purpose of considering and, if thought fit, passing the following resolutions, of which resolutions
numbered 1 to 8 and 10 will be proposed as ordinary resolutions and resolution 9 will be proposed
as a special resolution:
Ordinary business
1. To receive the reports of the directors and auditor and the financial statements for the period
ended 31 March 2019.
2. To approve the remuneration report for the period ended 31 March 2019.
3. That, following a recommendation by the directors, a final dividend payment of 0.6p per
Ordinary Share shall be paid to those persons who were named on the register of
shareholders on 19 July 2019.
4. That Crowe UK LLP be and is hereby reappointed as auditor of the Company and that the
directors be authorised to determine the auditor’s remuneration.
5. To re-elect as a director, Steven Douglas, who was re-elected at the AGM held on 21 July
2016.
6. To re-elect as a director, Fiona Underwood, who was re-elected at the AGM held on 21 July
2016.
7. That Claire Banks be and is hereby appointed as a director of the Company.
Special business
8. That, in accordance with section 551 of the Companies Act 2006 (“CA 2006”), the directors
be generally and unconditionally authorised to issue and allot equity securities (as defined by
section 560 of the CA 2006) up to an aggregate nominal amount of:
8.1 £206,580 in connection with the valid exercise of the options (both approved and
unapproved) granted by the Company (as set out in the prospectus issued by the
Company dated 20 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
8.2 in any other case, £588,463 (such amount to be reduced by the nominal amount of any
equity securities allotted pursuant to the authorities in paragraph 8.1 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.
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Aquila Services Group plc
Notice of Annual General Meeting
9. That, subject to Resolution 8 above being duly passed, the directors of the Company be and
are hereby empowered, pursuant to section 570 of the CA 2006, to allot equity securities (as
defined in section 560 of the CA 2006) wholly for cash pursuant to the authority conferred
upon them by Resolution 8 above (as varied, renewed or revoked from time to time by the
Company at a general meeting) as if section 561(1) of the CA 2006 did not apply to any such
allotment provided that such power shall be limited to the allotment of equity securities:
9.1 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;
9.2 in connection with the valid exercise of Options;
9.3 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
9.4 otherwise, up to a maximum nominal amount of £88,269.
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.
10. That the Company be and is hereby authorised generally and unconditionally to make market
purchases (within the meaning of section 693(4) of the CA 2006) of its ordinary shares
(“Ordinary Shares”) provided that:
10.1 the maximum aggregate number of Ordinary Shares that may be purchased is
3,530,777;
10.2 the minimum price (exclusive of expenses) which may be paid for an Ordinary Share
is £0.05;
10.3 the maximum price (exclusive of expenses) which may be paid for an Ordinary Share
is the higher of:
(a) 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
(b) the value of an Ordinary Share calculated on the basis of the higher of the price
quoted for:
(i) the last independent trade of; and
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Aquila Services Group plc
Notice of Annual General Meeting
(ii) the highest current independent bid for any number of Ordinary Shares on
the Official List.
10.4 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.
Registered office:
Tempus Wharf
29a Bermondsey Wall West
London
SE16 4SA
By order of the board
Dr Fiona May Underwood
Company Secretary
26 June 2019
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Aquila Services Group plc
Notice of Annual General Meeting
Notes
1. 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.
2. 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.
3. 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, Steelpark Road, Halesowen B62 8HD in accordance with the instructions
printed thereon, not less than 48 hours before the time appointed for the holding of the meeting.
4. 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.
5. 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.
6. Information regarding the meeting, including the information required by section 311A of the Act, is available from
www.aquilaservicesgroup.co.uk
7. 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.
8. As at close of business on 26 June 2019 the company’s issued share capital comprised 35,307,766 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 26 June 2019 is 35,307,766.
9. 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.
10. 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.
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Aquila Services Group plc
Notice of 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.
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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sterling 172754