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Annual Report & Accounts 2010
AssetCo Fire and Rescue
AssetCo is an International Fire and Rescue Services business.
We provide fully outsourced Fire and Rescue Services, including the
provision of personnel, training and equipment.
AssetCo is the largest outsourcing partner to London Fire Brigade, the
largest dedicated Fire and Rescue Service in the world, and we are
the only UK Government approved private frontline firefighter service
provider.
We are the only company to have a fully outsourced Fire and Rescue
Service in the Middle East.
AssetCo plc Annual Report & Accounts 2010
Financial Highlights
£10.8m
Profit before tax
£12.1m
20%
Dividend
1.5p
UAE Government contract won
£40m for 3 years+
Emergency Fire Crew contract won
£12m for 7 years
Business Profile
Who We Are
What We Do
What’s Been Happening
Client Profiles
Our Team
Year in Review
Chairman’s Statement
Chief Executive’s Officer’s Report
Chief Financial Officer’s Report
Governance
Board of Directors
Report of The Directors
Corporate Governance Report
Consolidated Financial
Statements
Report of the Independent Auditor
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39
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Consolidated Income Statement
Consolidated Statement
of Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated
Financial Statements
Company Financial
Statements
Report of the Independent Auditor
Company Balance Sheet
Notes to the Company
Financial Statements
Shareholder Information
Notice of
Annual General Meeting
Financial Calendar
Company Information
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AssetCo plc Annual Report & Accounts 2010
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“To support our clients’ Fire and Rescue Services and to
enable transformational change that delivers improved
training, better equipped operations and a safer
environment for all communities.”
John Shannon, CEO
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AssetCo plc Annual Report & Accounts 2010
Who We Are
AssetCo Fire and Rescue has
evolved from the leasing and asset
management subsidiary of British
Gas into a high growth International
Fire and Rescue Services business.
resilience previously provided by the
Ministry of Defence using military
personnel and their Green Goddess
fleet.
The business is built around a
cornerstone 20-year operational
asset management contract with
the London Fire and Emergency
Planning Authority (LFEPA) for
London Fire Brigade. With 113 fire
stations across the capital, and
accounting for 20% of the total
UK Fire and Rescue spend, London
Fire Brigade is the world’s largest
dedicated Fire and Rescue Service.
In July 2009 AssetCo secured a
7-year contract, the first of its
nature in the UK, to provide a 700
strong firefighter reserve capability
to LFEPA. This replaced the
AssetCo is also rapidly emerging as
the preferred partner of outsourced
fire and rescue services within the
UAE. In November 2009 AssetCo
announced a 10-year joint venture
agreement with the Abu Dhabi
Government to develop and operate
a 100-acre multi-agency training
centre.
In March 2010 AssetCo secured a
3-year £40m contract to provide a
fully outsourced firefighting service
in the UAE, resulting in AssetCo
Fire and Rescue being the only
UK Company providing frontline
emergency services to another state.
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AssetCo plc Annual Report & Accounts 2010
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AssetCo plc Annual Report & Accounts 2010
AssetCo plc Annual Report & Accounts 2010
What We Do
AssetCo is an International Fire and
Rescue Services business.
We provide fully outsourced fire
and rescue services, including the
provision of personnel, training and
equipment. AssetCo pioneered the
development of Fire and Rescue
support services and have been the
partner of choice of London Fire
Brigade for long-term pathfinder
contracts, awarded for the provision
of emergency fire crews and
operational management of assets
and infrastructure.
We are trusted by our clients
to manage their risk in meeting
government policy and industry
standards for fire and rescue
provision and are the only company
to have secured fully outsourced
fire and rescue services in the
Middle East.
We advise governments and
industry in the management
and provision of fire and rescue
services. Our team includes senior
personnel with direct operational
experience.
We operate in the civil defence,
armed forces, aviation and oil and
gas industries and have secured
transformational contracts with
Governments in the UK and the UAE.
AssetCo has offices in the UK,
Republic of Ireland and Abu Dhabi.
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AssetCo plc Annual Report & Accounts 2010
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What’s Been Happening
July 2009
Nov 2009
Jan 2010
UVM into Administration
AssetCo’s vehicle assembly business,
UV Modular Limited (UVM), has
been placed into administration.
This action is in line with the
statement made at the publication
of the Groups’ interim results on
7th December 2009, that following
a strategic review conducted earlier
in the year it would seek to exit
from its low margin businesses and
focus on the further development
of growth opportunities as an
International Fire and Rescue
Services business.
The UK’s First Reserve Fire Crew
Contract
Following a competitive tendering
process, AssetCo was awarded
a 7-year contract by London Fire
and Emergency Planning Authority
(LFEPA) for the provision of an
Emergency Fire Crew Capability
Service to the London Fire Brigade
(LFB) of up to 700 staff, trained to
provide a contingency firefighting
service.
This contract will assist LFEPA
in meeting its statutory duty to
provide crew resilience should
existing services require support
with extreme situations such as a
pandemic illness or flooding. This
is the first major contract of its
nature to be awarded by a UK Fire
and Rescue Service, reflecting the
increasing role Fire and Rescue
Authorities have in securing
their own business continuity
arrangements without reliance
upon the support of the Ministry of
Defence.
Multi-Agency Training Centre – Abu
Dhabi Government Joint Venture
In November 2009, AssetCo Fire and
Rescue was awarded a 10-year joint
venture contract with the Abu Dhabi
Government for the design, build,
development and operation of a new
purpose built multi-agency training
centre.
This long-term Government
partnership will establish a
10-year management contract of
the 100-acre training centre. The
project will cater for all aspects
of national training requirements,
combining the needs of all
stakeholder government authorities
and emergency services providers.
The project also supports the
aspirations of the UAE Government
to enter into Public Private
Partnerships that bring new skills
transfer to the region for long term
benefits to the citizens of UAE.
2009
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2010
Feb 2010
March 2010
April 2010
10th year of the PFI contract with
London Fire Brigade (LFB)
AssetCo owns, maintains and
manages the operational availability
and life cycle of all LFB frontline fire
and rescue vehicles and equipment.
Our 20-year PFI contract continues
to deliver client value and realise
efficiencies across operational
assets at each of the 113 fire stations
operating in and around London.
5th year of PPP contract with
Lincolnshire Fire and Rescue Service
(LFRS)
AssetCo owns, maintains and
manages the operational availability
and life cycle of all LFRS frontline
fire and rescue vehicles and
equipment. Our 20-year PPP contract
continues to deliver client value
and has contributed to improved
ratings against Government audit
and performance assessment across
the 38 fire stations operating in and
around Lincolnshire.
Outsourced Firefighting Services
Contract with the UAE Government
In March 2010, AssetCo was awarded
a 3-year contract to recruit, train
and provide firefighting services for
the Abu Dhabi Government across 5
fire stations.
This contract is the first of its kind in
the region and includes the building
of new fire stations and upgrading
of existing facilities and equipment
to meet the requirements of
Government Policy on the provision
of Fire and Rescue Services.
The contract extends across the
UAE and incorporates a wide range
of services including airport, civil,
industrial and oil and gas incident
response, support and management.
AssetCo plc Annual Report & Accounts 2010
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ClientProfile
London Fire Brigade
The London Underground is the world’s
largest underground network serving
three million passengers each day.
London is also the home to City and
Heathrow Airports and the UK’s busiest
rail terminals.
In 2001, AssetCo was awarded a
20-year PFI contract by the London
Fire and Emergency Planning Authority
(LFEPA) to provide a range of
outsourced support services, including
the ownership and management of
operational vehicles and equipment.
Specifically, AssetCo procures and
delivers the fleet and equipment to the
London Fire Brigade (LFB), enabling
efficiencies for over 500 appliances and
support vehicles, two fire boats and
50,000 items of operational equipment.
AssetCo manages the operational
availability of all of the frontline Fire
and Rescue vehicles and operational
equipment used at the 113 London fire
stations.
The London Fire Brigade territory
covers Britain’s major capital city
- home to the British parliament,
British and European financial centres
and Royal Palaces. London’s World
Heritage Sites include the Palace of
Westminster, the Tower of London,
Westminster Abbey and the Royal
Botanic Gardens at Kew.
Around 7.5 million people live in
London. The population is expected to
grow by nearly 10% by 2016, rising to
8.1 million. People moving into London
are mostly young adults. Around 16% of
the population are aged 60 years and
over and around 25% are aged 19 years
or younger.
PeopleProfile:
“Since the award of the 20-year PFI contract in 2001, AssetCo
Fire and Rescue have continued to deliver operational
improvements to the London Fire Brigade through their
unrivalled understanding of the Fire and Rescue Service, and
their ability to adapt and assist us in the challenges we have
faced.”
Ron Dobson – Commissioner, London Fire and Emergency
Planning Authority
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AssetCo plc Annual Report & Accounts 2010
ClientProfile
London Fire Brigade
The London Fire Brigade is the largest
dedicated Fire and Rescue Service in
the world with approximately 7,000
staff. LFB accounts for 20% of all
UK fire spend. AssetCo’s operational
support is delivered across all LFB fire
stations 24 hours a day, every day of
the year.
Recruitment, Training and Provision
of Firefighting Crews
In 2009, AssetCo was awarded
a 7-year contract to provide the
London Fire Brigade with up to 700
staff, trained to provide a support
firefighting service. This is the first
major contract of its nature to be
outsourced by a UK Fire and Rescue
Service, and was awarded to AssetCo
following a competitive tendering
process.
Our reserve firefighters were
recruited and fully trained to provide
contingency to London Fire Brigade in
the event of extreme situations such
as pandemic illness or flooding.
Our crews are available for immediate
deployment with crew competency
maintained through continuous
professional development.
AssetCo plc Annual Report & Accounts 2010
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ClientProfile
Lincolnshire Fire & Rescue
PeopleProfile:
“Our experience in working with AssetCo under our 20-year
PPP contract, is that they continually innovate their support
services. This assists us in meeting the changing demands
placed upon us by central government. The benefits of this
integrated relationship are that whilst we maximise the value
of the current integrated support services, we are jointly
developing new initiatives that can bring additional resilience
and robustness to Lincolnshire Fire and Rescue Service.”
Mike Thomas MBE – Chief Fire Officer, Lincolnshire Fire and Rescue Service
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AssetCo plc Annual Report & Accounts 2010
AssetCo plc Annual Report & Accounts 2010
ClientProfile
Lincolnshire Fire & Rescue
Lincolnshire Fire and Rescue Service
(Lincolnshire FRS) covers 2,237 square
miles and is the fourth largest County
Fire and Rescue Service in the UK.
Lincolnshire has a widely dispersed
population of 692,800. The rural nature
of the area and the changing seasonal
demands and coastal attractions
require complex and considered
support.
In 2006 Lincolnshire Fire and Rescue
Service signed a 20-year PPP support
services contract with AssetCo for
the supply, operational management,
maintenance and replacement of their
pumping appliances, response and
support vehicles, and a full range of
operational equipment.
Soon after the award of the contract,
Lincolnshire FRS has been “improving
well” to cite the Audit Commission’s
Comprehensive Performance
Assessment 2008. Lincolnshire FRS has
consistently maintained their progress
over the years, paving the way for
ever-improving performance standards
for the Fire and Rescue Service in
the UK, and living up to their mission
statement of “making Lincolnshire a
safer place to live, work and visit”.
Specifically, AssetCo procures and
delivers a fleet and equipment to
Lincolnshire’s 900 firefighters and fire
staff across the 38 fire stations located
throughout Lincolnshire. AssetCo’s
operational support is delivered across
all Lincolnshire FRS’s fire stations 24
hours a day, every day of every year.
AssetCo plc Annual Report & Accounts 2010
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ClientProfile
UAE Government
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AssetCo plc Annual Report & Accounts 2010
ClientProfile
UAE Government
In 2010, AssetCo Fire and Rescue were
awarded a 3-year contract to provide a
fully outsourced firefighting service in
the region.
Our turnkey solution provides a
unique firefighting service for the
UAE Government and is the first
of its kind in the region. AssetCo
provides recruitment and training
of all personnel, specialist training,
operational equipment procurement,
and control and facilities management.
All aspects of the AssetCo UAE Fire
and Rescue Service conforms to
new International standards being
implemented and increases the
operating capability within the region.
The contract spans across the UAE
and incorporate services that include
airport, civil, industrial and oil and
gas incident response, support and
management. AssetCo Fire and Rescue
Service UAE will continue to expand
their portfolio of services and have a
long term commitment to advancing
the skills and capability of the local
Emirati workforce.
AssetCo plc Annual Report & Accounts 2010
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ClientProfile
Abu Dhabi Government
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AssetCo plc Annual Report & Accounts 2010
ClientProfile
Abu Dhabi Government
In 2009, AssetCo Fire and Rescue
was awarded a 10-year joint
venture contract with an Abu Dhabi
Government for the design, build,
development and operation of a new
future class multi-agency training
centre.
This long-term Government partnership
will establish a 10-year management
contract of the 100-acre training centre
which will conduct major scenario
and exercise training courses for all
military, civil defence and emergency
services organisations in the region.
The Emirate of Abu Dhabi, the capital
of the UAE, is facing unprecedented
growth in both infrastructure and
population. With a diverse geographical
location and over 200 islands, Abu
Dhabi accounts for 87% of the UAE land
mass. Many new aspects of health and
safety provision will be catered for in
the new training environment.
The project will be a landmark scheme,
hoping to cater for all aspects of
national training requirements and
combining the needs of all stakeholder
government authorities and emergency
services providers. The project also
supports the aspirations of the UAE
Government to enter into Public Private
Partnerships that bring new skills
transfer to the region for long term
benefits to the citizens of UAE.
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AssetCo plc Annual Report & Accounts 2010
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Our Team
Dr Jeff Ord CBE QFSM
Head of Fire and Rescue Service,
AssetCo Fire and Rescue UAE
William Wilson MIFire
Deputy Chief Fire Officer,
AssetCo Fire and Rescue UAE
Since 2007, Jeff has been a lead
member of the team developing
AssetCo’s Fire and Rescue
capability and a key relationship
builder in the UAE.
Roy Bishop OBE QFSM FIFIRE
Fire and Rescue Training Director,
AssetCo Fire and Rescue UK
Roy joined AssetCo in 2009 as a
senior Fire and Rescue specialist,
enhancing our expertise in our
policy, operations and training.
Brendan McCaffrey MA BSc
(Hons) MIFire
Chief Fire Officer, AssetCo Fire
and Rescue UAE
Brendan joined AssetCo in 2009
and has been a part of the
AssetCo team with particular
involvement in the development
of our Fire and Rescue Service
for the UAE Government.
Lou Gill QFSM DMS GIFireE
Service Delivery Director, AssetCo
Fire and Rescue UK
Since joining AssetCo Lou has
led the successful bids for
the Fully Managed Services
contract for Lincolnshire Fire and
Rescue Service in 2006 and the
Emergency Fire Crew contract for
London Fire Brigade in 2009.
William joined the AssetCo UAE
team in 2010 specialising in
aviation Fire and Rescue Services.
Previously, he was Station
Manager at Glasgow Airport Fire
Service and Watch Manager at
Edinburgh Airport Fire Service.
Saeed Almehrezi
Assistant Chief Fire Officer
(Operations), AssetCo Fire and
Rescue UAE
Saeed joined AssetCo UAE and is
responsible for the operational
management of fire stations for
AssetCo UAE. He is experienced in
the establishment of firefighting
teams, equipping them with
the skills to handle the latest
vehicles and equipment to fight a
variety of fires, including aviation
incidents.
Charles Barnard GIFireE
Deputy Chief Fire Officer,
AssetCo Fire and Rescue UAE
Charles joined AssetCo UAE in
2010 to provide the overall day
to day management of the fire
service for AssetCo UAE, with
specialist knowledge in aviation
firefighting.
Omer Kiyga
Senior Liaison and Administrative
Support Officer, AssetCo Fire and
Rescue UAE
Omer is the lead administrative
support officer in our base in
the UAE. His main duties include
administration and liaison,
translation and support to the
senior operational team. He is
fluent in both English and Arabic,
with the ability to prepare and
present in both languages.
Tony Barnett
International Business
Development Director, AssetCo
Fire and Rescue
Tony has over 15 years of
international and domestic
business development, marketing
and business restructuring
experience, working in Europe,
the Americas and Asia Pacific.
He also has particular expertise
working throughout the Middle
East and Africa in both public and
private organisations.
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AssetCo plc Annual Report & Accounts 2010
Sean Duffy FCA
Corporate Development Director,
AssetCo Fire and Rescue
Gareth White BA (Hons)
Managing Director, AssetCo Fire
and Rescue UAE
Sean has a 15 year track record
in mergers and acquisitions
throughout Ireland and the UK
and is a Fellow of the Institute of
Chartered Accountants in Ireland.
Prior to joining AssetCo in
early 2010, he was Head of IBI
Corporate Finance in Northern
Ireland, the Investment Banking
arm of Bank of Ireland plc. He
has also held senior positions
with NCB Corporate Finance
and KPMG Corporate Finance in
Dublin and Belfast.
Mark Clissett
Managing Director, AssetCo Fire
and Rescue UK
As a key member of the AssetCo
team, Mark has added value to
our Contract Implementation,
Project Management and
Operational Management
capability. In addition he has
responsibility for the London Fire
Brigade and Lincolnshire Fire and
Rescue Service contracts. He has
been responsible for managing
the implementation of new
business and operational exit
from legacy contracts.
As a member of the AssetCo
team since 2007, Gareth has
managed international relations
and new business development.
Allan Richardson
Group Projects and Engineering
Director, AssetCo Fire and Rescue
Since 2007, Allan has worked
for AssetCo, applying his
expertise to key account
projects, operations and contract
management.
William Drysdale BA (Hons)
Client Account Director, AssetCo
Fire and Rescue UK
Since Joining AssetCo in 2008,
William has been managing our
key contracts with London Fire
Brigade and Lincolnshire Fire and
Rescue Service.
William Warke BA (Hons) MA
Group Head of Human Resources,
AssetCo Fire and Rescue
Since 2007 William has played
a key role in the AssetCo team
as Head of Human Resources
including the development of our
HR Strategy and the recruitment
of staff for our operations in the
UK and the UAE.
Matthew Boyle BSc (Hons)
DipAcc ACA
Group Financial Controller,
AssetCo Fire and Rescue
Matthew joined AssetCo as part
of the Buy-out team in late
2005. He manages the Financial
Accounting and Treasury
Management functions for the
Group and supports the business
in Business Development,
Corporate Governance, Public and
Private Value for Money Studies,
Cost Benefit Analysis, Financial
Due Diligence and Acquisitions.
Tom Joyce
Head of Group Bid and Brand
Management, AssetCo Fire and
Rescue
Tom joined AssetCo in 2005 and
has been key in the transfor-
mational change programme
to develop the organisation’s
capability as a support services
provider. He has held a number
of senior roles within the
organisation, including Account
Director and Head of Marketing.
AssetCo plc Annual Report & Accounts 2010
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Chairman’s Statement
Tim Wightman
Chairman
I am pleased to report that the Group made
strong progress during the year in line with
its strategy to reposition its activities as a
streamlined support services business with an
international presence. It has also begun to
see the benefit of the investment made since
2008 in the United Arab Emirates. Despite
the difficult overall economic environment
the Group has shown a strong growth in the
performance of its continuing activities.
The Group continued to strengthen its
relationships with the London Fire Brigade
(LFB), built around its 20-year PFI contract,
which is now in its 10th year, and with
Lincolnshire Fire and Rescue Service, in the
5th year of a 20-year PPP contract. Our
strategy is to prioritise our efforts on those
essential support services accountable for the
highest proportion of our clients’ cost base
and which will make a significant addition to
our support services revenue.
In July, we secured a 7-year contract, the first
in the UK, to provide a 700 strong firefighter
reserve capability to the London Fire and
Emergency Planning Authority. This replaced
the resilience previously provided by the
Ministry of Defence (using military personnel
and the “Green Goddess” fleet).
The UK is entering a period of unprecedented
public sector fiscal pressure. The requirement
for all UK Fire and Rescue Authorities to
deliver efficiency savings from continued
modernisation will now be much greater
and more pressing. Our experience, track
record and the increased breadth of our Fire
and Rescue offering means that we are well
positioned to deliver sustainable long-term
growth in this environment.
£10.8m
20%
7p
41%
47%
19%
Profit before tax
£12.1m
(2009: £1.3m)
Dividend increase
1.5p
(2009: 1.25p)
EPS from continuing operations
£8.9p
(2009: 1.9p) p
EBITDA
£24.9m
(2009: £17.6m)
Recourse debt
£18.9m
(2009: £35.7m)
Cash conversion
139%
(2009: 117%)
18
AssetCo plc Annual Report & Accounts 2010
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We have established an office in Abu Dhabi
serving the Middle East and North Africa
region, and in early 2009, raised investment
specifically to support our business
development in the region. Our partnership
model with LFB, which is recognised inter-
nationally as one of the world’s leading Fire
and Rescue Services, provides an operating
template against which we can measure other
services and deliver change and improvement.
In November last year, we announced a
10-year joint venture with the Abu Dhabi
Government to develop and operate a
100-acre multi-agency, emergency services
training centre. The establishment of this
joint venture with the Abu Dhabi Government,
positions us well to work with the various
agencies that deliver a fire and rescue
service to the UAE, to allow them to consider
alternative delivery models for all their
operational service requirements.
In March, we secured a 3-year contract, the
first in the UAE, to provide a fully outsourced
firefighting service including the provision
of personnel, training, asset and facilities
management. This contract has provided us
with the opportunity to open up a number
of new markets in the provision of frontline
firefighting.
As announced previously, following
completion of a strategic review, the board
has decided to concentrate all the Group’s
resources on support services and to
withdraw from the Group’s other activities.
Accordingly businesses within the Specialist
Equipment division and the low margin Vehicle
Assembly operations are being divested or
have been exited.
Results
Profit before tax from continuing operations
was £12.1m (2009: £1.3m). Basic earnings
per share from continuing operations
increased substantially to 8.9p (2009: 1.9p).
Discontinued operations made a loss of £5.3m
(2009: Profit £0.3m). Profit after tax and
discontinued operations was £2.3m (2009:
£1.7m). Cash conversion (as defined in the
report by the Chief Financial Officer) was
139% (2009: 117%). Recourse debt at the year
end stood at £18.9m, a reduction of £16.8m
during the year.
Dividend
The directors are recommending an increased
dividend of 1.5p per share (2009: 1.25p) and
the board also intends to declare an interim
dividend of not less than 1.0p following the
disposal of “assets held for sale”.
Board
Andrew Freemantle CBE joined the board as
a non-executive director on 1st January 2010.
Andrew retired in 2009 from the position of
Chief Executive of the Royal National Lifeboat
Institution, a position he held for ten years.
He has extensive leadership experience in
complex, multi-site organisations providing
indispensable services to the public and his
experience will be of great benefit to AssetCo
as we continue to develop the business in the
UK and Internationally.
Adrian Bradshaw will be standing down
as a non-executive director at the Annual
General Meeting in August. He has served
on the board for over six years and made an
important contribution for which we are very
grateful. He leaves with our best wishes for
the future.
AssetCo plc Annual Report & Accounts 2010
19
Chairman’s Statement
Staff
It has been a year of considerable change
set against a difficult economic background
and the board is very aware of the essential
contribution of all the staff for the progress
the Company has made. Our employees are
motivated and committed to deliver high
quality products and services to our clients.
On behalf of the board, I would like to thank
them all for their hard work.
Current trading
Trading at the start of the new financial
year is in line with the board’s expectations,
and I am pleased to report that 100% of our
forecast revenue for financial year 2011 is
contractually committed.
Outlook
Although the continuing difficult economic
situation and fiscal pressures present
challenges for all businesses in the UK, our
established track record allows us to provide
alternative models to deliver significant
savings to help Local Authorities meet the
government’s budget targets. The board
sees the Middle East in general, Abu Dhabi
and the UAE in particular, as strong areas for
growth where AssetCo can add value. The
Group benefits from a highly experienced
management team and I am confident that
we will deliver a resilient performance in the
coming year.
Tim Wightman
Chairman
12 July 2010
20
AssetCo plc Annual Report & Accounts 2010
Chief Executive Officer’s Report
John Shannon
Chief Executive Officer
100% of our Forecast
Revenue for FY11 is
contractually committed
Our operating model
has been reshaped as a
fully streamlined support
services business
concentrating on Fire
and Rescue domestically
and Internationally
Internationally, our
focus is to develop
relationships with
Governments who look
to UK Fire and Rescue,
and London Fire Brigade
in particular, as operating
templates to deliver
change and improvement
“We are the only UK company providing a
frontline emergency service to a foreign
state.”
The past financial year delivered a strong
endorsement from our clients in the evolution
of the business from its leasing and asset
management origins into a high growth
International Fire and Rescue Services
business. Our operating model has been
re-shaped as a fully streamlined support
services business to deliver the maximum
return to stakeholders. We have closed our
Vehicle Assembly unit, and begun the disposal
process for our Specialist Equipment unit.
We delivered a £10.8m increase in profit
before tax from continuing operations on
the prior year, and in line with the long-term
contractual nature of the business 100% of
our forecast revenue for financial year 2011 is
contractually committed. We have proactively
reduced our recourse debt from £35.7m to
£18.9m (which on a net debt basis less cash is
£5.2m).
Culturally and intellectually, the business
has under-gone a significant improvement in
the depth and breadth of our technical and
operating managerial skills base. Our team
now includes senior global fire and rescue
specialists who have expertise in policy,
regulation, operations and training.
Strategy
UK
In the UK, we have prioritised our efforts on
those essential support services accountable
for high proportions of our client’s cost base.
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AssetCo plc Annual Report & Accounts 2010
21
Chief Executive Officer’s Report
In July 2009, AssetCo
was awarded a 7 year
contract by London
Fire and Emergency
Planning Authority
(LFEPA) for provision of
an Emergency Fire Crew
Capability Service (EFCC)
In November 2009,
we announced a joint
venture with the Abu
Dhabi government for
the development and
operation of a new
multi-agency training
centre
In March 2010, we
were awarded a £40m
contract again in the
UAE, for an initial 3
years, to provide a fully
outsourced firefighting
service in Abu Dhabi and
the wider UAE
22
AssetCo plc Annual Report & Accounts 2010
The UK is entering a period of unprecedented
public sector fiscal pressure. The requirement
for all UK Fire and Rescue Authorities to follow
the lead of London and deliver efficiency
savings from continued modernisation will
now be much greater and more pressing. We
continue to develop solutions that enable
clients to have access to alternative delivery
models for operational training and frontline
operational services.
In July 2009, we were awarded a 7–year
contract by the London Fire and Emergency
Planning Authority (LFEPA) for the provision
of an Emergency Fire Crew Capability Service
(EFCC) to the London Fire Brigade of up to
700 staff trained to provide a contingency
firefighting service. The EFCC contract enables
London to meet its statutory duty to provide
crew resilience if existing services require
support with extreme situations such as a
pandemic illness or flooding.
This was the first major contract of its nature
to be awarded by a UK Fire and Rescue
Service, reflecting the increasing role Fire
and Rescue Authorities have in securing
their own continuity arrangements without
reliance upon the support of the MoD. The
contract was won following a competitive
tendering process and reflects our depth of
understanding of the challenges facing the
UK Fire and Rescue Service and our ability
to compete successfully with the largest
companies in the business outsourcing field.
Internationally
Internationally, our focus is to develop
relationships with Governments who look to
UK Fire and Rescue, and London Fire Brigade
in particular, as operating templates to deliver
change and improvement.
In November 2009, we announced a
10-year joint venture with the Abu Dhabi
Government to develop and operate a
100-acre multi-agency, emergency services
training centre. The project is an integral
part of a programme to establish accredited
training and senior qualifications in the fields
of safety, security, defence, emergency
preparedness and crisis management
for personnel from the Emirates, the
Gulf Co-operation Council (GCC) and
Internationally.
In March 2010, we secured a 3-year contract,
the first in the UAE, to provide a fully
outsourced firefighting service including the
provision of personnel, training, asset and
facilities management. This contract has
provided us with the opportunity to open up
a number of new markets in the provision
of frontline firefighting, including Aviation,
Defence, and Oil and Gas markets. We are
the only UK Company providing a frontline
emergency service to a Foreign State.
Outlook
This is an exciting period in the Group’s
development. The evolution of our business
model into the provider of a UK Fire
and Rescue based frontline operational
service, has us well placed for growth as
an International Fire and Rescue Services
business. Whilst our established track record
in the UK allows us to continue to offer
alternative models to deliver significant
efficiency savings to those Local Authorities
tasked with meeting the Chancellor’s budget
targets.
John Shannon
Chief Executive Officer
12 July 2010
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AssetCo plc Annual Report & Accounts 2010
23
Chief Financial Officer’s Report
Frank Flynn
Chief Financial Officer
Business review
As part of our ongoing strategy to streamline our
business we have had a year of considerable change
with a number of companies within the group being sold,
closed or made available for sale. The intention is that by
the 31st March 2011 we will have a UK and International
business managing long term contracts. The results for
the year ended 31st March 2010 show a profit before
tax for continuing operations of £12.1m (2009: £1.3m)
although part of this increase is derived from the change
in accounting for the treatment of the hedges we have
on our long term contract debt, which has been treated
as a prior year adjustment. The backdrop to 2010 was
the turmoil in the financial markets which has seen
the fundamentals of the banking structure in the UK
changed radically, creating challenges for all businesses
in the UK. The knock on effect of the banking crisis and
the subsequent bail out by the Government has created
a huge fiscal deficit that can only be addressed by a
wholesale reduction in Government public expenditure.
This should create a positive environment for outsourcers
who can assist government with its planned reduction in
public expenditure.
Prior year adjustment gains/(losses) in relation to
interest rate hedging
Following a review of the swaps we have in place to fix
the interest rates on the debt associated with our long
term contracts, this fixing of our interest rates is no longer
deemed to be “effective” as defined by IAS 39. It should
be noted this does not mean the swaps are commercially
ineffective as the movements are non cash items.
As the swaps are now deemed “ineffective” according to
IAS 39 the non cash movements on these swaps are now
accounted through the consolidated income statement
and no longer accounted for through the consolidated
statement of financial position. The former approach
resulted in adjustments being made to reserves on an
instrument where the end result will be zero and we
paradoxically now have to account for this through the
consolidated income statement.
However, in order to comply with this standard our 2008
and 2009 financial statements have been restated with
a net after tax charge of £3.3m in 2009. The net after
tax effect in 2010 is a credit of £0.9m and as the hedge
reduces each year in line with the original profile of our
debt there will be further credits to the consolidated
income statement for the duration of the hedge.
Breakdown of total debt
2010
2009
Asset finance - emergency
Asset finance - non emergency
Acquisition and other medium term loans
Short term loans and overdrafts
£63.3m (77%) of
our total debt is
non-recourse Asset
backed debt which
relates to our long
term Fire and Rescue
contracts
24
AssetCo plc Annual Report & Accounts 2010
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Key Performance Indicators
The Board monitors the Group’s Key Performance
Indicators which are summarized below for FY09 and
FY10:
£
2010
2009 Variance
Variance
%
Profit before tax from
continuing operations
12.1m
1.3m
10.8m
831%
EBITDA
24.9m
17.6m
7.3m
41%
Basic earnings per
share from continuing
operations
Net debt
Cash conversion
Staff turnover
8.9p
68.5m
139%
5%
1.9p
76m
117%
5%
7.0p
368%
(7.5)m
22
–
10%
19%
0%
Profit before tax from continuing operations
Profit before tax from continuing operations of £12.1m
has increased from £1.3m. £5.9m of the increase is due
to the change in accounting treatment for our fixed
rate hedge and the balance is due to the continued
growth of our long term contracts and securing the
Emergency Fire Crew Capability Contract (EFCC) in July
2009 to provide over 700 reserve firefighters to London
Fire Brigade. 2009 numbers have also been adjusted for
UV Modular Limited – In Administration, which is now
included in discontinued operations along with a number
of other subsidiaries which were either sold or have been
categorised as “assets held for sale”.
EBITDA
Earnings before interest, tax, depreciation and
amortisation have increased by 41% to £24.9m due to the
increased revenues for the year.
Basic EPS
Basic earnings per share from continuing operations have
increased to 8.9p (2009: 1.9p).
Net Debt
The debt has fallen from £76m in 2009 to £68.5m in 2010
and this is analysed in the table below:
£
Asset finance – emergency
Asset finance – non emergency
Acquisition and other medium term loans
Short term loans and overdrafts
Less cash
Net debt
2010
62.7m
0.6m
17.7m
1.2m
2009
61.6m
1.2m
32.0m
3.7m
(13.7)m
(22.5)m
68.5m
76m
£63.3m (92%) of our net debt is non-recourse asset
backed debt which relates to our long term Fire and
Rescue contracts. These contracts continue to grow
and accordingly the levels of asset finance required
reflect this growth. We are continually reviewing our
debt structures to enable the business to meet the debt
requirements of our core long term contracts.
During the year we have proactively worked on our “cash
optimisation plans” and towards the end of the year
the funds generated have been utilised to reduce our
recourse debt which has fallen by £16.8m to £18.9m. We
have a medium term goal to reduce this to zero.
Cash Conversion
Cash conversion, the ratio of cash generated from
operating activities to operating profit before exceptional
items and discontinued operations, has increased
significantly from 117% in 2009 to 139% in 2010. In
absolute terms this equates to cash generated from
operating activities of £24.3m (2009: £12.7m). This
growth is reflective of the increased working capital
management focus of the Group and also the disposal
and closure of subsidiaries which tied up considerable
working capital investment.
Staff Turnover
This is calculated excluding redundancy programmes and
at 5% is consistent with the prior year.
Historical performance for Continuing Operations
£’m
Revenue
Gross profit
Gross profit %
Admin expenses
Restructuring costs
Operating profit
Operating profit %
Finance costs
Profit before tax
Taxation
Profit after tax
2010
2009
2008
45.2
27.6
61.1
10.1
–
17.4
38.5
7.0
12.1
4.5
7.6
34.1
21.9
64.2
11.0
–
10.8
31.7
5.7
1.3
(0.1)
1.4
26.1
17.4
66.7
14.9
0.6
6.7
25.7
4.4
2.3
1.9
0.4
AssetCo plc Annual Report & Accounts 2010
25
Chief Financial Officer’s Report
26
26
AssetCo plc Annual Report & Accounts 2010
AssetCo plc Annual Report & Accounts 2010
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Discontinued operations
Discontinued operations include activities relating to the
UV Modular Ltd and Auto Electrical Services Ltd, (see
below), and the Supply 999 and Treka businesses which
are held for resale. The trading and investment losses in
relation to these companies was £5.3m (2009: £0.3m).
UV Modular Limited – In Administration
UV Modular Limited, a loss making subsidiary, was placed
in Administration on 15th January 2010 after a protracted
process where we tried to find a buyer for the business.
This process was unsuccessful and due to the ongoing
drain on Group working capital resources and the losses
being incurred the business was closed and has been
accounted for in FY10.
Auto Electrical Services (Manchester) Ltd
Auto Electrical Services (Manchester) Ltd, a loss making
subsidiary was acquired because of the potential
of its “M~Flow” telemetry product which has been
enthusiastically received by the Police and Fire authorities
and is currently being rolled out across our London Fire
fleet. There are great opportunities for this technology
and during the year the technology was transferred to
another AssetCo subsidiary and the AES business was
sold back to management in October 2009.
Placing
In July, following the award of the London EFCC contract
we raised £7.5m (after costs) to help with the upfront
costs of training over 700 reserve fire fighters for the
London Fire and Emergency Planning Authority.
Frank Flynn
Chief Financial Officer
12 July 2010
Revenue
Group revenue increased by 33% to £45.2m (2009: £34.1m)
due to the securing of the EFCC contract which commenced
in August 2009 and also due to the IFRS treatment of new
assets, which are separately identifiable from a vehicle, and
are recognised in accordance with IAS 17 as a sale under
a finance lease debtor arrangement. For these assets the
IFRS accounting treatment is to take the future revenues
from these assets, discount this revenue stream back to
today’s value and recognise the revenues as a finance lease
debtor. The accounting treatment for the costs associated
with these assets are recognised in accordance with IAS 17
“Leases” and included in costs of sales.
Gross profit
Gross profit has increased by 26% to £27.6m (2009:
£21.9m) due to the increased revenues during the year.
The gross profit margin was 61.1% (2009: 64.2%) and the
reduction in the gross profit % reflects the service rather
than capital intensive nature of new revenue.
Administration expenses
Group administration expenses were £10.1m (2009: £11m),
and this material reduction is the consequence of our
continuous improvement projects and the synergies from
our site rationalisation programme.
Finance costs
Finance costs were 23% higher than last year at £7m
(2009: £5.7m), although included in finance costs is
£1.1m (2009: £0.1m) of deemed preference share interest
being the consequence of the full year effect of the
IFRS deemed finance charge on the preference shares of
which an element is classified as financial liabilities. This
is a non cash adjustment and the real underlying interest
charge is similar to last year. The reduction in debt
occurred towards the end of the year and the benefit of
lower finance costs will accrue in 2011.
Taxation
The total tax charge for the year was £4.5m, representing
an effective tax rate of 37.2% (2009 zero tax). The higher
tax rate this year reflects an adjustment to the tax
treatment of the losses arising when TVAC - The Vehicles
Application Centre Limited was placed into administration
in December 2008. A similar tax treatment has been
adopted in the current year for the losses arising on
the placing into administration of UV Modular Limited in
January 2010. We anticipate the effective tax rate will
return to more normal levels in FY11.
AssetCo plc Annual Report & Accounts 2010
27
The Board
Tim Wightman
Chairman
Tim is currently Non-Executive Chairman of Petards Group plc, an AIM quoted
company and was Non-Executive Chairman of Digica Group Holdings Limited, an IT
outsourcing company backed by Bridgepoint Capital, until its sale to Computacentre
plc in January 2007. Prior to this, Tim was Chief Executive Officer for businesses
listed on the Munich Stock Exchange and the London Stock Exchange.
John Shannon
Chief Executive Officer
John led the reverse takeover of AssetCo Group Limited by Asfare Group plc
(now AssetCo plc) in March 2007, and has led the creation of AssetCo Fire and
Rescue as an International Fire and Rescue Service business. Prior to this, he
led the Buy-in/Management Buy-out of AssetCo Group Limited in October 2005.
He has been a board director of AssetCo Group Limited from October 2003,
following the acquisition of his asset management business by AssetCo. Prior
to the establishment of his own business in 1997, John had worked with Bank
of Ireland Corporate and International Banking, and with KPMG. John is a Fellow
of the Institute of Chartered Accountants in Ireland, a Fellow of the Institute of
Logistics and Transport, and a Member of the Institute of Bankers. John holds a
BSc (Hons) in Marine Biology, and a Masters of Business Administration.
Frank Flynn
Chief Financial Officer
Frank was part of the team that acquired AssetCo Group Limited (now AssetCo plc)
in October 2005. In the four years leading up to the Buy-in/Management Buy-out,
he was an associate partner at PricewaterhouseCoopers (PwC) with specific focus
on realising shareholder value. He was responsible for activities in PwC’s Omagh
and Derry offices and managed human resources for Northern Ireland Assurance, a
division of PwC employing over 300 people. He also managed a portfolio of audit
clients.
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Pelham Public Relations Ltd, No.1 Cornhill, London
EC3V 3ND T: +44(0)20 7743 6670
F: +44(0)20 7743 6671 E: pr@pelhampr.com
Registrars
Computershare Investor Services, P.O. Box 1075
The Pavilions, Bridgwater Road, Bristol BS99 3FA
T: +44(0)87 0889 3198
28
AssetCo plc Annual Report & Accounts 2010
Adrian Bradshaw
Non-Executive Director
Adrian is currently and has been a Director of a number of public and
private companies. He previously worked for Citicorp Scrimgeour Vickers,
NatWest Markets and Guidehouse Limited and in 1989 he was appointed
Head of Corporate Finance at Arbuthnot Latham Bank. Prior to this, Adrian
was Chief Executive of Inception Group.
Peter Manning
Non-Executive Director
Peter has extensive international experience in senior operating and
customer focused roles in business process outsourcing and in service and
technology industries. Between 2004-2007, he was Chief Executive of HBS
Ltd, a business owned by Terra Firma Capital Partners providing business
process outsourcing to the Local Government sector in the UK, which was
subsequently sold to Mouchel Group plc.
Andrew Freemantle CBE
Non-Executive Director
Andrew has extensive leadership experience in complex, multi-site
organizations providing mission critical services to the public both in the
UK and Internationally.
Andrew has recently retired as Chief Executive of the Royal National
Lifeboat Institution a position he held for ten years. The RNLI is the
world’s largest lifeboat service with an annual budget of over £124 million,
operating with 450 lifeboats from 235 lifeboat stations with 1,250 staff and
4,700 volunteer crew.
Auditors
Grant Thornton UK LLP Churchill House,
Chalvey Road East, Slough, Berkshire SL1 2LS
Legal Adviser
Nabarro, Lacon House, Thoebald’s Road, London
WC1X 8RW T: + 44(0) 20 7524 6000
Reporting Accountants
Grant Thornton UK LLP
43 Queen Square, Bristol BS1 4QR
Legal Adviser
Mills Selig, 21 Arthur Street, Belfast BT1 4GA
Northern Ireland T: +44(0)28 9024 3878
Investor Relations
James Collins
AssetCo Head Office, 800 Field End Road
South Ruislip, Middlesex, HA4 0QH
T: +44(0)208 515 3822 E:james.collins@assetco.com
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AssetCo plc Annual Report & Accounts 2010
29
Report of the Directors
Introduction
The directors present their annual report and the audited financial statements of the Company, and its subsidiary
undertakings included in the consolidation (together “the Group”), for the year ended 31st March 2010.
Principal activities
AssetCo is an International Fire and Rescue Services business. Our principle activities include the provision of
fully outsourced fire and rescue services including personnel, training and equipment.
The Group has been re-organised as a fully streamlined Integrated Support Services business concentrating on
international Fire and Rescue. The subsidiaries, associated undertakings and joint ventures affecting the profits
or net assets of the Group during the year are listed in notes 28 and 29 to the financial statements.
Review of business and future developments
Further information relating to the performance of the business, strategy and an indication of likely future
developments, is given in the Chairman’s Statement and the reports of the Chief Executive Officer and Chief
Financial Officer.
The directors use various Key Performance Indicators (“KPIs”) to measure the performance of the business. The
principle financial and non-financial indicators include EBITDA, earnings per share, net debt, conversion of profit
before tax to cash and staff turnover. As outlined in the Report of the Chief Financial Officer, the directors are
pleased with the Group’s performance against both the financial and non-financial KPIs.
EBITDA
£24.9m
£24m
£17.6m
£17m Operating Profit add
2010 Actual
2010 Target
2009 Actual
2009 Target
Calculation
depreciation
EPS from continuing operations
8.9p
7.5p
1.9p
6.0p Retained continuing profit
Net debt
Cash conversion
£68.5m
139%
£68m
125%
£76m
117%
divided by number of shares
£76m Total debt minus cash at bank
100% Cash generated from
operations divided by PBT
Staff turnover
5%
5%
5%
5% Leavers less redundancy over
staff numbers
Results and dividend
The results for the year are set out in the consolidated income statement. This shows a Group profit on
continuing operations after taxation of £7.6m (2009:£1.4m).
The company has paid dividends in the year of £1.14m (2009: £0.72m).
The directors recommend a final dividend of 1.5 pence per share (2009: 1.25p) which, if approved, will be paid on
25 October 2010 to eligible shareholders on the register at 24 September 2010. The directors intend to recommend
an interim dividend of not less than 1.0p following the disposal of “assets held for sale”.
Capital structure
Details of the authorised and issued share capital, together with details of the movements in the Company’s
issued share capital during the year, are shown in note 23. The company has one class of ordinary share which
carries no right to fixed income. Each share carries the right to one vote at general meeting of the company.
30
AssetCo plc Annual Report & Accounts 2010
Report of the Directors
There are no specific restrictions on the size of holding nor the transfer of shares, which are both governed
by the general provisions of the Articles of Association and prevailing legislation. The directors are not aware
of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of
securities or voting rights.
Details of the employee share scheme are set out in note 23.
The directors are not aware of any agreements between the Company and its directors or employees that
provide for compensation for loss of office or employment that occurs because of a takeover bid.
Under its Articles of Association, the Company has the authority to issue 95,000,000 ordinary shares.
Directors
The directors who held office during the year were as follows:
Tim Wightman (non-executive Chairman)
Adrian Bradshaw (non-executive)
Peter Manning (non-executive)
Andrew Freemantle (non-executive – appointed 1 January 2010)
John Shannon (Chief Executive Officer)
Frank Flynn (Chief Financial Officer)
Tim Wightman, Adrian Bradshaw, Andrew Freemantle and Peter Manning each serve on the Audit Committee,
Remuneration Committee and Nominations Committee. The responsibilities of these committees are outlined in
the “Corporate Governance” section of the annual report.
In accordance with the Articles of Association,Andrew Freemantle was appointed a director during the year by
the board, will retire and, being eligible, seek election by shareholders.
Tim Wightman retires by rotation and being eligible, offers himself for re-election at the Annual General
Meeting in accordance with the Articles of Association.
Directors’ shareholdings
The beneficial interests of the directors in the shares of the Company were as follows:
Executive directors
John Shannon
Frank Flynn
Non-executive directors
Tim Wightman (1)
Adrian Bradshaw (2)
Peter Manning
Andrew Freemantle
At 31 March
2010
At 31 March
2009
26,963,327
26,963,327
7,447,222
7,175,000
532,083
267,917
28,846
8,480
532,083
267,917
28,846
n/a
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(1)
Tim Wightman is interested in 158,333 of the ordinary shares set out against his name by reason of his wife’s beneficial ownership of
those shares.
(2)
Adrian Bradshaw is interested in 16,667 ordinary shares set out against his name, held in Bradmount SSAS pension scheme.
AssetCo plc Annual Report & Accounts 2010
31
Report of the Directors
There were no non-beneficial interests held by any of the directors.
On 31 July 2009 John Shannon was allotted 777,777 ordinary shares, on 11 March 2010 John Shannon sold 777,777
ordinary shares.
No changes took place in the interests of directors between 31 March 2010 and the approval of these accounts.
The market price of the ordinary shares at 31 March 2010 was 58 pence (2009: 28.5 pence) and the range during
the year was 24 pence to 87 pence.
No director has or had a material interest in any contract or arrangement to which the Company, or any
subsidiary, is or was a party except as set out in note 33.
Changes to Concert Party
Immediately following the re-admission of the Company’s ordinary Shares to trading on AIM in March 2007, a
concert party led by John Shannon and Frank Flynn (the “Original Concert Party”) owned 42,427,589 ordinary
shares in AssetCo, which at the time carried 63.2 per cent of the Company’s voting rights. Full details of the six
members of the Original Concert Party and their respective shareholdings and percentage interests were set out
in the Company’s Admission Document dated 6 March 2007.
Since then certain members have left the Original Concert Party and its membership is now considered to
comprise only John Shannon and Frank Flynn (the “Revised Concert Party”). The Revised Concert Party currently
holds 34,410,549 (2009: 34,188,327) ordinary shares in AssetCo, which carry 37.93 per cent (2009: 49 per cent)
of the Company’s voting rights. The current respective shareholdings and percentage interests of John Shannon
and Frank Flynn are set out in the Directors’ Report.
As a result of the fall in the Revised Concert Party’s shareholding to below 50% of voting rights in the Company,
the Revised Concert Party is no longer generally able to increase its aggregate interests in AssetCo ordinary
shares, nor may the remaining members increase their individual interests, without the Revised Concert party
incurring an obligation under Rule 9 of the Takeover Code to make a general offer for the company.
Directors’ indemnities
There are no third party indemnity provisions in place during the year or at the date this report is approved.
Service contracts
The executive directors, John Shannon and Frank Flynn were awarded service contracts on 5 March 2007 of
unlimited duration which are terminable, at any given time by either party, by giving written notice of six
months.
Two of the non-executive directors, Tim Wightman and Adrian Bradshaw, were awarded service contracts on
5 March 2007 for two years and thereafter terminable on written notice of three months by either party. On
19 August 2008 Peter Manning, a non-executive director, was awarded a service contract for three years and
thereafter terminable on written notice of three months by either party. Andrew Freemantle joined the Group
as a non-executive director on 1 January 2010 and likewise was awarded a service contract for three years and
thereafter terminable on written notice of three months by either party.
The terms and conditions of appointment of the non-executive directors are available from the Company
Secretary.
32
AssetCo plc Annual Report & Accounts 2010
Share options
The company operates a share option scheme through which the directors are able to subscribe to ordinary
shares.
The directors who held office at 31 March 2010 had beneficial interests in options as set out below.
Name
Tim Wightman
Adrian Bradshaw(1)
Parties
Exercise price No. of shares Date of grant
Expiry date
Director
Director
100p
100p
105,000
105,000
5 December 2003
5 December 2003
4 December 2013
4 December 2013
(1)
The options set out against Adrian Bradshaw were granted to Bradmount Investments Limited acting as nominee for Adrian Bradshaw
and Peter Mountford in equal measure. Both Adrian Bradshaw and Peter Mountford are directors and shareholders of Bradmount
Investments limited.
During the year, no share options were issued. No share options were exercised during the year and a total of
140,000 share options were forfeited during the year.
Substantial shareholdings
At 25 June 2010 the Company Secretary has been notified, in accordance with Chapter 5 of the Disclosure and
Transparency Rules (“DTR”) as issued by the Financial Services Authority, of the following interests of 3% or
more in the issued ordinary share capital of the Company:
Name
Marcus John Shannon
Raymond Francis Flynn
Gartmore Investment Limited
Schroder Investment Management Limited
Standard Life Investments Limited
Number of
shares
26,963,327
7,447,222
5,179,166
4,607,753
2,809,444
Percentage of
issued
share capital
29.72%
8.21%
5.71%
4.89%
3.10%
Charitable donations
During the year, the Group made donations of £nil (2009: £nil) to local charities serving the communities in
which the Group operates.
Principal risks and uncertainties
The directors continuously monitor the business and markets within which the Group operates in order to deal
with any significant risks or uncertainties as they arise.
Although it is not possible to mitigate all risks, all reasonable steps are taken in order to ensure that any
adverse consequences associated with these risks are minimised. The directors are of the opinion that a
thorough risk management process is adopted which involves a formal review of all the risks identified below.
The board has developed internal processes for identifying, evaluating and managing significant risks faced by
the Group. The board continues to develop a detailed risk register which identifies key strategic, financial and
operating risks affecting, or potentially effecting, the Group. Each risk is assigned to a member of the board
who is responsible for monitoring that risk.
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AssetCo plc Annual Report & Accounts 2010
33
Report of the Directors
The Group has recently won some significant overseas orders in the Middle East. The Group is actively
considering ways in which its anticipated increased exposure to exchange rate fluctuations can be managed.
In a similar vein, the Group has recently concluded negotiations with its providers of finance which now means
that approximately 80% of its borrowings carry interest at a fixed rate.
The Groups exposure to credit risk is insignificant due to the nature of its two Public Finance Initiatives and
Public Partnership contracts. Both contracts are government backed and so the risk of default by customers is
considered to be remote.
Revenue is secured through long-term arrangements with government agencies. Cash flows in relation to these
contracts can be forecast with a high degree of certainty. These contracts and other areas of the business
continue to grow improving cash flows of the group and enhancing profitability.
Expenditure in the emergency services market is expected to grow, and following the successful completion of a
number of contract wins, we are well placed to capture revenues in all sectors of the market. The establishment
of an Emergency Resource team, tasked with exploring the annual budget of a typical Fire and Rescue Authority
is spent, demonstrates the Group’s commitment to the market.
Management monitors rolling forecasts of the Group’s liquidity reserves and cash and cash equivalents on the
basis of expected cash flow. This is generally carried out at a local level in the operating companies of the
Group.
Financial instruments
Information about the use of financial instruments by the Group is given in note 22 to the financial statements.
Financial risk management objectives and policies
The Group and Company use various financial instruments including loans, cash, equity investments, preference
shares and various items, such as trade receivables and trade payables that arise directly from their operations.
The main purpose of these financial instruments is to raise finance for the Group’s and Company’s operations.
The existence of these financial instruments exposes the group and company to a number of financial risks,
which are described in more detail below. In order to manage the Group’s and Company’s exposure to those
risks, in particular the Group’s and Company’s exposure to interest rate risk, the Group and Company enters into
a number of derivative transactions including variable to fixed rate interest rate swaps.
All transactions in derivatives are undertaken to manage the risks arising from underlying business activities and
no transactions of a speculative nature are undertaken.
The main risks arising from the Group’s and Company’s financial instruments are market risk, cash flow interest
rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks
and they are summarised below.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably.
34
AssetCo plc Annual Report & Accounts 2010
Report of the Directors
The Group policy throughout the year has been to ensure continuity of funding so that at least 25% of its
borrowings should mature in more than five years. At the year-end, 25% of the Group’s and Company’s
borrowings were due to mature in more than five years.
Short-term flexibility is achieved by overdraft facilities. The maturity of borrowings is set out in note 24 to
the financial statements. In addition to these borrowings the company has access to undrawn committed
borrowing facilities of an additional £3.7m. Access to these facilities is expected to expire within two years but
negotiations are currently underway to extend access to this facility.
Interest rate risk
The Group finances its operations through a mixture of retained profits, bank borrowings and convertible
preference shares. The Group exposure to interest rate fluctuations on its borrowings is managed by the use of
both fixed and floating facilities. It is the Group’s policy to keep a significant amount of its borrowings at fixed
rates of interest. Prior to year end the Group has concluded negotiations with its providers of finance which
now means that approximately 80% of its borrowings carry interest at a fixed rate.
The interest rate exposure of the financial assets and liabilities of the group as at 31 March 2010 is shown in
the table below. The table includes trade receivables and payables as these do not attract interest and are
therefore subject to fair value interest rate risk.
Financial assets
Cash
Trade receivables
Total
Financial liabilities
Overdrafts
Bank loans
Finance leases
Preference shares
Total
Interest rate
Floating
£’000
Fixed
£’000
–
–
–
13,697
–
13,697
Interest rate
Floating
£’000
1,210
17,719
–
–
18,929
Fixed
£’000
–
–
63,250
8,200
71,450
Zero
£’000
–
1,535
1,535
Zero
£’000
–
1,535
1,535
Total
£’000
13,697
1,535
15,232
Total
£’000
1,210
17,719
63,250
8,200
90,379
Credit risk
The Group’s principal financial assets are cash and trade receivables. The credit risk associated with the cash
is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The
principal credit risk arises therefore from the Group’s trade receivables.
Going concern
Management routinely plan future activities including forecasting future cash flows. Management have
reviewed their plans with the directors and have collectively formed a judgement that the Group has adequate
resources to continue as a going concern for twelve months from the date of signing the financial statements.
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AssetCo plc Annual Report & Accounts 2010
35
Report of the Directors
In arriving at this judgement the directors have reviewed the cash flow projections of the Group for the
foreseeable future in light of the trading and financing uncertainties in the current economic climate and have
considered existing commitments together with the financial resources available to the group.
The Group also benefits from the surety of two major long term contracts with secure revenue streams. This,
aligned with a significant public sector client base gives comfort over future revenue streams and thus the
going concern status of the Group. The directors have also considered the current global economic downturn
together with the unprecedented markets for debt and equity financing at this time. The directors have
considered all significant trading exposures and do not consider the Group to be significantly exposed to its
trading partners, either clients or suppliers at this time.
The detailed profit and loss and cash flow budgets prepared by management for the period up to 31 July 2011
have been subjected to various sensitivity analyses and shown that the Group is forecast to have more than
sufficient headroom during that period.
Events after the balance sheet date
Details of significant events since the balance sheet date can be found in Note 32 to the financial statements.
Business combinations and disposals
Details of the Group’s disposals can be found in Note 28 to these financial statements.
Property, plant and equipment
The directors are of the opinion that there is no material difference between the book value and the current
open market value of the Group’s interests in land or buildings.
Insurance Cover
The Group maintains appropriate insurance cover in respect of legal actions against the directors as well as
against material loss or claims against the Group. The adequacy of cover is reviewed on a regular basis.
Creditor payment policy and practice
It is the Group’s policy to settle the terms of payments with suppliers when agreeing the terms of the
transactions, to ensure that suppliers are aware of these terms and to abide by them. Trade payables at the
year end amount to 38 days (2009: 43 days) of average supplies for the year.
Employment of disabled persons
It is the policy of the Group to give full and fair consideration to the employment of disabled persons in jobs
suited to their individual circumstances and, as appropriate, to consider them for recruitment opportunities,
career development and training. Where possible, arrangements are made for the continuing employment of
employees who have become disabled whilst in the Group’s employment.
Employee involvement
The Group has continued in its practice of keeping employees informed of the performance and objectives of
the Group through personal briefings, regular meetings and e-mail.
The financial and economic factors affecting the Group’s performance are also communicated by senior
management through informal team briefings.
36
AssetCo plc Annual Report & Accounts 2010
Report of the Directors
Directors and senior management regularly discuss with employees, matters of current interest and concern to
the business.
The Group has implemented a Save as You Earn (“SAYE”) schemes for its employees in an effort to further
encourage share ownership and employee participation as widely as possible across the Group.
Equal opportunities
The Group is committed to equal opportunities from recruitment and selection through to training,
development, performance monitoring and retirement.
It is the policy of the Group to promote an environment free from discrimination, harassment and victimisation.
All decisions relating to employment practises will be objective, free from bias and based solely upon work
criteria and individual merit.
Existence of branches outside the United Kingdom
There were branches of the Group located outside the United Kingdom in Abu Dhabi during the year and at year
end.
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The directors
have elected to prepare the Group financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (“EU”). The directors have elected to prepare the parent company
financial statements in accordance with United Kingdom Accounting Standards (“United Kingdom Generally
Accepted Accounting Practice”).
The financial statements are required by law to give a true and fair view of the state of affairs of the Group and
Company at the end of the financial year and of the profit or loss of the Group for that year.
In preparing these financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
•
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy
at any time the financial position of the Company and the Group and enable them to ensure that the financial
statements comply with the Companies Acts 2006. They are also responsible for safeguarding the assets of the
Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
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AssetCo plc Annual Report & Accounts 2010
37
Report of the Directors
Corporate Governance Report
In so far as the directors are aware:
•
there is no relevant audit information of which the company auditor is unaware; and
•
the directors have taken all steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditor is aware of that information.
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.
Annual General Meeting
The annual general meeting will be held on 18 August 2010 at the offices of Arden Partners plc at 125 Old Broad
Street, London, EC2N 1AR. The meeting will convene at 11:00 am.
Auditor
Grant Thornton UK LLP, have expressed their willingness to continue in office.
In accordance with Section 489 (4) of the Companies Act 2006 a resolution to reappoint Grant Thornton UK LLP
will be proposed at the Annual General Meeting.
By order of the Board
Michael Lavender
Company Secretary
12 July 2010
Company Registration Number: 04966347
38
AssetCo plc Annual Report & Accounts 2010
Report of the Directors
Corporate Governance Report
Introduction
The Company is committed to high standards of corporate governance and the board is aware that it is
accountable to the Company’s shareholders on such matters.
As an AIM listed company, AssetCo plc is not required to comply with all of the Combined Code. However, the
Company has chosen to disclose the following information on corporate governance.
The Board
The Board consists of two executive and four non-executive directors. The executive directors provide a direct
line of control between the Company and its operating businesses. The non-executive directors provide a
balance to the Board and bring a wide breadth of experience.
The Board meets on a monthly basis and has a formal schedule of matters reserved for its consideration. These
matters include the approval of the financial and commercial strategy, dividend policy, annual and interim
results, review of major investments, internal controls and performance as well as reporting to shareholders.
The schedule is reviewed on an annual basis.
All directors have access to the advice and services of the Company Secretary and may also seek independent
professional advice and training, at the expense of the Company, if required to carry out their duties.
The Board carries out rigorous reviews of its own performance and that of its committees. Formal individual
performance reviews are also conducted. In addition, the close-working nature of the Board is such that an
under-performance would be immediately apparent. The Chairman explicitly encourages any Board member with
concerns over the performance of an individual director to identify those to himself at any time.
Committees
The Board has established an audit committee (Adrian Bradshaw, Chairman), remuneration committee (Peter
Manning, Chairman) and nominations committee (Tim Wightman, Chairman).
The terms of reference of each of the committees are available from the Company Secretary.
Audit committee
The audit committee, which convenes every six months, has primary responsibility for monitoring the quality
of internal controls and for ensuring that the financial performance of the Group is properly measured and
reported on, as well as reviewing reports from the Group’s auditors relating to the Group’s accounting and
internal controls, in all cases having due regard to protecting the interests of the shareholders.
The committee also reviews the independence and objectivity of non-audit services supplied by external
auditors to the Group, seeking to balance objectivety and value for money taking into account relevant ethical
guidance.
Remuneration committee
The remuneration committee will determine the terms and conditions of service of the executive directors,
including their remuneration and grant of options.
The policy of the committee is to implement packages that are closely aligned to market standards and best
practice.
Should an executive director wish to take up an external appointment, approval must be sought from the
Chairman and Chief Executive Officer of the Group.
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AssetCo plc Annual Report & Accounts 2010
39
Corporate Governance Report
The non-executive directors are paid a fee for their services and do not qualify for performance bonuses.
Remuneration of the directors
The remuneration of the executive directors and fees paid to the non-executive directors during 2010 and 2009
are as follows:
John Shannon
Frank Flynn
Total
Non-executive directors’ remuneration
Tim Wightman
Adrian Bradshaw
Peter Manning
Andrew Freemantle
Total
Salary
2010
£'000
300
250
550
Benefits
in kind
2010
£'000
Total
emoluments
2010
£'000
–
–
–
300
250
550
Salary
2009
£'000
250
125
375
Benefits
in kind
2009
£'000
Total
emoluments
2009
£'000
–
–
–
2010
£'000
55
35
35
18
143
250
125
375
2009
£'000
55
35
18
-
108
Nominations committee
The nominations committee makes recommendations to the board for the appointment or replacement of
directors. It is also responsible for succession planning within the Group. The functions of the nomination
committee were discharged by the main board throughout the year and it did not meet separately.
Board Changes
The Group was pleased to welcome Andrew Freemantle to the board of directors during the year and would like
to thank Adrian Bradshaw for his service as a non-executive director. Adrian is standing down with effect of the
date of the Annual General Meeting. Adrian has served on the board for over six years and made an important
contribution for which we are very grateful.
Internal control
The Board is responsible for maintaining a sound system of internal controls to safeguard the investment of
shareholders and the assets of the Group.
The directors monitor the operations of the internal controls. The objective of the system is to safeguard the
assets of the Group, to ensure adequate accounting records are maintained and to ensure that the financial
information used with the business, and for publication, is reliable. Any such system of internal control can only
provide reasonable, but not absolute assurance, against material misstatement of loss.
Internal control procedures implemented by the Board include:
•
•
•
•
A clearly defined organisation structure with formal lines of authority, accountability and responsibility;
Review of monthly financial reports and monitoring of performance;
Prior approval of all significant expenditure including all major investment decisions; and
Regular assessment of major business, investment and financing risks.
40
AssetCo plc Annual Report & Accounts 2010
Corporate Governance Report
The board has reviewed the operation and effectiveness of the Groups’ system of internal control for the
financial year and the period up to the date of approval of the financial statements.
During the course of its review of the system of internal control, the Board has not identified nor been advised
of any failings or weaknesses which it has determined to be significant. Therefore, a confirmation in respect of
necessary actions has not been considered appropriate.
Internal audit function
The audit committee remains of the view that given the size and the nature of the operations of the Group that
the establishment of an internal audit function is not warranted. The audit committee continues to review this
decision.
Attendance at meetings
The number of Board and Committee meetings attended by each of the directors during the year:
Name
Executive directors
John Shannon
Frank Flynn
Non-executive directors
Tim Wightman
Adrian Bradshaw
Peter Manning
Andrew Freemantle
Main Board
Meetings
Audit
Committee
Remuneration
Committee
17 (18)
18 (18)
18 (18)
18 (18)
18 (18)
3 (3)
–
–
2 (2)
2 (2)
2 (2)
–
–
–
2 (2)
2 (2)
2 (2)
–
The figures in parentheses indicate the number of meetings that each director was eligible to attend during the
year.
Relations with shareholders
The Board has always sought to maintain good relations with the Company’s shareholders and believe that
shareholders receive timely information on the performance of the Group.
The directors acknowledge that it is important for both private and institutional shareholders to have the
opportunity to raise concerns or discuss matters. All of the directors attend the Company’s Annual General
Meeting and are available to answer questions at the meeting or privately. The directors are in regular contact
with institutional shareholders and feedback is also received from the Company’s brokers and nominated
advisor.
Michael Lavender
Company Secretary
12 July 2010
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AssetCo plc Annual Report & Accounts 2010
41
Report of the Independent Auditor to
the Members of AssetCo plc
We have audited the group financial statements of AssetCo plc for the year ended 31 March 2010 which
comprise the consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated
statement of cash flow and the related notes. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European
Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an 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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement as set out on page 22 , the directors are
responsible for the preparation of the Group financial statements and for being satisfied that they give a
true and fair view. Our responsibility is to audit the Group financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/UKNP.
Opinion on financial statements
In our opinion the group financial statements:
•
give a true and fair view of the state of the Group’s affairs as at 31 March 2010 and of its profit for the year
then ended;
•
have been properly prepared in accordance with IFRS as adopted by the European Union; and
•
.
have been prepared in accordance with the requirements of the Companies Act 2006
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the group
financial statements are prepared is consistent with the Group financial statements.
42
AssetCo plc Annual Report & Accounts 2010
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the parent company financial statements of AssetCo plc for the year ended
31 March 2010.
Robert Napper
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Slough
12 July 2010
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AssetCo plc Annual Report & Accounts 2010
43
Consolidated Income Statement
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Finance income
Finance costs
Gain/(loss) on fair value of financial instrument
Profit before taxation
Taxation
Deferred tax movement on gain/(loss) of financial instrument
Profit for the year from continuing operations
Discontinued operations
(Loss)/profit for the year from discontinued operations
Profit for the year
Earnings per share (pence)
From continuing operations
Basic
Diluted
From continuing and discontinued operations
Basic
Diluted
Year ended
Notes
31.03.2010
£’000
31.03.2009
£’000
6
12
12
7
9
9
10
10
28
11
11
11
11
45,231
(17,671)
27,560
(10,139)
17,421
416
(7,043)
1,304
12,098
(4,166)
(365)
7,567
(5,296)
2,271
8.9p
8.9p
2.7p
2.7p
34,050
(12,175)
21,875
(11,036)
10,839
706
(5,739)
(4,555)
1,251
(1,134)
1,275
1,392
283
1,675
1.9p
1.9p
2.3p
2.3p
The accompanying notes form an integral part of these consolidated financial statements
44
AssetCo plc Annual Report & Accounts 2010
Consolidated Income Statement
Consolidated Statement
of Comprehensive Income
Profit for the year
Other comprehensive income
Exchange differences on translating of foreign operations
Income tax relating to components of other comprehensive income
Total comprehensive income
Notes
31.3.2010
£’000
2,271
246
(69)
177
2,448
31.3.2009
Restated
£’000
1,675
(660)
185
(475)
1,200
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The accompanying notes form an integral part of these consolidated financial statements
AssetCo plc Annual Report & Accounts 2010
45
Consolidated Statement of
Financial Position
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Investment in associates
Deferred tax asset
Retirement benefit surplus
Current assets
Inventories
Trade and other receivables
Cash
Assets held for sale
Total assets
EQUITY
Issued share capital
Equity component of compound financial instruments
Share premium account
Reverse acquisition reserve
Translation reserve
Other reserve
Retained earnings
Total equity
Notes
31.3.2010
£’000
31.3.2009
Restated
£’000
31.3.2008
Restated
£’000
15
16
16
28
26
17
18
19
20
21
23
23
23
23
74,714
47,905
7,939
414
4,377
429
76,877
57,081
5,666
414
5,162
429
76,727
54,060
1,576
414
3,043
429
135,778
145,629
136,249
201
28,014
13,697
41,912
16,956
6,607
24,062
22,498
53,167
–
5,910
21,514
12,896
40,320
3,370
194,646
198,796
179,939
22,678
7,917
29,288
(11,701)
(58)
680
12,014
60,818
18,345
7,917
26,115
(11,701)
(304)
580
10,883
51,835
17,958
–
25,197
(11,701)
356
384
9,929
42,123
The accompanying notes form an integral part of these consolidated financial statements
46
AssetCo plc Annual Report & Accounts 2010
Consolidated Statement of
Financial Position
LIABILITIES
Non-current liabilities
Borrowings
Liability component of compound financial instruments
Deferred tax liabilities
Current liabilities
Trade and other payables
Current income tax liabilities
Borrowings
Provisions
Derivative financial instruments
Liabilities associated with assets classified as held for sale
Total liabilities
Total equity and liabilities
Notes
31.3.2010
£’000
31.3.2009
Restated
£’000
01.4.2008
Restated
£’000
24
23
26
27
24
22
21
67,267
8,200
9,959
85,426
20,118
858
14,912
–
5,821
41,709
6,693
133,828
194,646
81,676
7,045
7,391
96,112
26,881
–
16,843
–
7,125
50,849
–
146,961
198,796
69,970
–
5,961
75,931
27,872
330
26,825
1,549
2,190
58,766
3,119
137,816
179,939
Approval
These financial statements were approved by the Board of directors and authorised for issue on 12 July 2010 and
are signed on their behalf by:
R.F.Flynn
Director
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The accompanying notes form an integral part of these consolidated financial statements
AssetCo plc Annual Report & Accounts 2010
47
Consolidated Statement
of Changes in Equity
Consolidated Cash Flow Statement
Ordinary
and
preference
share
capital
£’000
Share
premium
account
£’000
Reverse
acquisition
reserve
£’000
Hedging
reserve
£’000
Translation
reserve
£’000
Other
Reserve
£’000
Retained
earnings
£’000
17,958
25,197
(11,701)
1,577
356
384
11,506
Total
Equity
£’000
45,277
–
–
–
–
–
–
(3,154)
1,577
–
–
–
–
17,958
25,197
(11,701)
At 1 April 2008 as previously stated
Prior year adjustment in respect of
derivative financial instruments
Prior year adjustment in respect of
derivative financial instruments
At 1 April 2008 as restated
Exchange differences on translation of
overseas operations
Profit for the year
Total recognised income and expense
for the period
Dividends paid in the year
Movement relating to share-based
payments
Net proceeds from issue of shares
At 31 March 2009
Exchange differences on translation of
overseas operations
Profit for the year
Total recognised income and expense
for the period
Dividends paid in the year
Movement relating to share-based
payments
–
–
–
–
–
8,304
26,262
–
–
–
–
–
–
–
–
–
–
918
–
–
–
–
–
–
26,115
(11,701)
–
–
–
–
–
–
–
–
–
–
–
Net proceeds from issue of shares
4,333
3,173
At 31 March 2010
30,595
29,288
(11,701)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
356
384
(660)
–
(660)
–
–
–
(304)
246
–
246
–
–
–
(58)
–
–
–
–
196
–
580
–
–
–
–
100
–
680
–
(3,154)
(1,577)
9,929
–
42,123
–
(660)
1,675
1,675
1,675
(721)
–
–
1,015
(721)
196
9,222
10,883
51,835
–
2,271
246
2,271
2,271
(1,140)
2,517
(1,140)
–
–
100
7,506
12,014
60,818
The accompanying notes form an integral part of these consolidated financial statements
48
AssetCo plc Annual Report & Accounts 2010
Consolidated Cash Flow Statement
Cash flows from operating activities
Cash generated from operations
Taxation
Contribution to defined benefit pension schemes
Net cash flow from operating activities
Cash flows from investing activities
Finance income
Acquisition of subsidiaries, net of cash acquired
Purchase of intangible assets
Cash element of deferred consideration settlement
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Cash flow from investing activities
Cash flows from financing activities
Issue of shares (net of costs)
Dividends paid
Finance costs
Repayments of borrowings
Increase in borrowings
Finance lease additions
Finance lease repayments
Net cash from financing
Net cash and cash equivalents from continuing operations
Cashflow from discontinued operations
Net change in cash and cash equivalents
Cash, cash equivalents and bank overdrafts at beginning of period
Cash, cash equivalents and bank overdrafts at end of period
Year ended
Notes
31.3.10
£’000
30
24,294
(320)
(228)
23,746
416
(1)
(2,713)
–
(8,073)
12
(10,359)
7,506
(1,140)
(5,888)
(11,063)
–
11,807
(11,371)
(10,149)
3,238
(9,556)
(6,318)
18,805
12,487
31
16
15
9
20
31.3.09
Restated
£’000
12,732
(44)
(292)
12,396
717
(60)
(3,563)
(1,800)
(10,906)
6,229
(9,383)
14,780
(721)
(6,687)
(5,100)
10,942
15,062
(13,453)
14,823
17,836
575
18,411
394
18,805
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The accompanying notes form an integral part of these consolidated financial statements
AssetCo plc Annual Report & Accounts 2010
49
Notes to the Consolidated
Financial Statements
1. Legal status and activities
AssetCo plc and its subsidiaries (together “the Group”) are principally involved with the provision of
management services to the emergency services market. Other Group companies are engaged in automotive
engineering, the provision of asset management services and the supply of specialist equipment to the
emergency services market.
AssetCo plc is a public limited liability company incorporated and domiciled in England and Wales. The address
of its registered office is 800 Field End Road, South Ruislip, Middlesex HA4 0QH. The Group operates from eight
sites throughout the United Kingdom and one in the Republic of Ireland.
AssetCo plc’ shares are listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange.
Due to the adoption of reverse acquisition accounting, references to “the Company” in the consolidated
financial statements are to AssetCo Group Limited. Further information on reverse acquisition accounting is
given in note 2.2.
For greater clarity, the financial statements have been presented in Sterling to the nearest thousand pounds
(£’000) except where otherwise indicated.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below.
2.1 Basis of preparation
The consolidated financial statements comply with the AIM Rules and have been prepared in accordance with
International Financial Reporting Standards (“IFRSs”) as adopted by the European Union and International
Financial Reporting Interpretation Committee (IFRIC) interpretations as they apply to the financial statements of
the Group for the year ended 31 March 2010 and applied in accordance with the Companies Act 2006 applicable
to companies reporting under IFRS. The consolidated financial statements are prepared using the historical cost
convention as modified for the revaluation of certain derivative instruments. The accounting policies which
follow set out the policies which apply in preparing the consolidated financial statements for the year ended
31 March 2010. The accounting policies applied are consistent with those followed in the preparation of the
31 March 2009 consolidated financial statements except where noted below.
Going concern
Management routinely plan future activities including forecasting future cash flows. Management have
reviewed their plans with the directors and have collectively formed a judgement that the Group has
adequate resources to continue as a going concern for at least twelve months from the date of signing of
the consolidated financial statements. In arriving at this judgement the directors have reviewed the cash flow
projections of the Group for the foreseeable future in light of the trading and financing uncertainties in the
current economic climate and have considered existing commitments together with the financial resources
available to the Group. The Group also benefits from the surety of two major long term contracts which
guarantee revenue streams for the next 14 years. This, aligned with a significant public sector client base gives
comfort over future income streams and thus the going concern status of the Group. The directors have also
considered the current global economic downturn together with the unprecedented markets for debt and equity
financing at this time. The directors have considered all significant trading exposures and do not consider the
group to be significantly exposed to its trading partners, either clients or suppliers at this time.
50
AssetCo plc Annual Report & Accounts 2010
The detailed profit and loss and cash flow budgets prepared by management for the period up to
31 July 2011 have been subjected to various sensitivity analyses and show that the Group is forecast to have
more than sufficient headroom in that period.
Exemptions
IFRS 3: “Business Combinations”, has not been applied to acquisitions of subsidiaries or interests in joint
ventures that occurred before 1 April 2006 as these were business combinations effected before the date of
transition to IFRSs.
The Group has elected to recognise all cumulative actuarial gains and losses in relation to employee benefit
schemes at the date of transition which fall outside of the 10% corridor approach.
Critical accounting estimates and judgements
The preparation of financial statements requires management to make estimates and assumptions that affect
the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for
revenue and expenses during the year. The nature of estimation means the actual outcomes may differ from the
estimates. Further details on the critical accounting estimates used and judgements made in preparing these
financial statements can be found in Note 4.
Accounting standards and interpretations
Standards
New standards, interpretations and amendments having an impact on the Consolidated Financial Statements
IFRS 8: “Operating segments” (effective from 1 January 2009) requires an entity to adopt a “management
approach” to segment reporting such that segmental information is in the form which management uses
internally for assessing segment performance and deciding how to allocate resources to operating segments.
This information may be different from that used to prepare the income statement and statement of financial
position. The adoption of this standard has not affected the identified operating segments for the Group.
However the accounting policy for identifying segments is now based on internal management reporting
information that is regularly reviewed by the chief operating decision maker.
IAS 1: “Presentation of Financial Statements” (Revised 2007) is mandatory for accounting periods commencing
on or after 1 January 2009. The Income Statement and Statement of Recognised Income and Expense have been
replaced by a “Statement of Comprehensive Income”. IAS 1 permits the components of the income statement to
continue to be presented in a separate income statement, and the Group has taken this option. Additionally, IAS
1 now requires the presentation of the statement of changes in equity within a separate primary statement.
IAS 1 requires two comparative periods are presented for the statement of financial position when the Group:
1.
2.
3.
applies an accounting policy retrospectively,
makes a retrospective restatement of items in its financial statements, or
reclassifies items in the financial statements.
IFRS 7: “Financial instruments: disclosures” (Amendment), (effective from 1 January 2009) requires all financial
instruments that are measured at fair value in the balance sheet to be classified into a three-level fair
value hierarchy. The amendments are designed to assist understanding of the determination of fair value
measurements and are provided in note 25.
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Notes to the Consolidated
Financial Statements
New standards, interpretations and amendments to published standards – effective after 31 March 2010
IFRS 3: “Business combinations” (revised 2008) (effective from 1 July 2009) requires that all payments to
purchase a business are recorded at fair value at the acquisition date, with contingent payments classified
as debt subsequently re-measured through the Income Statement. There is a choice on an acquisition-by-
acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be
expensed. The Group will apply this from 1 April 2010.
IFRS 5: “Non-current assets held-for-sale and discontinued operations” (Amendment), and consequential
amendment to IFRS 1, clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a
partial disposal sale plan results in loss of control. Relevant disclosure should be made for this subsidiary if the
definition of a discontinued operation is met. The Group will apply this prospectively to all partial disposals of
subsidiaries from 1 April 2010.
IFRS 9: “Financial instruments” (effective 1 January 2013) introduces new requirements for the classification
and measurement of financial assets, simplifying the mixed measurement model currently applied under IAS 39
by defining two primary measurement categories for financial assets; amortised cost and fair value. The basis
of classification depends on the entity’s business model and the contractual cash flow characteristics of the
financial asset. The Group are reviewing the potential impact of this standard on future financial statements,
but do not expect that it will have a significant impact on the current treatment of the Group’s financial assets.
IFRIC 14 (Amendment), Prepayments of a minimum funding requirement (effective 1 January 2011) applies in the
limited circumstances when an entity is subject to minimum funding requirements and makes an early payment
of contributions to cover those requirements. The amendment permits such an entity to treat the benefit of
such an early payment as an asset. This amendment is not expected to impact the amounts recognised under
defined benefit schemes.
IFRIC 19: “Extinguishing financial liabilities with equity instruments” (effective 1 July 2010) requires that where
an entity renegotiates the terms of a financial liability and issues equity instruments to extinguish all or part
of the financial liability, then the equity instruments issued are measured at their fair value. If their fair value
cannot be reliably measured the equity instruments are measured to reflect the fair value of the financial
liability extinguished. The difference between the financial liability extinguished and the initial measurement
amount of the equity instrument issued is included in profit and loss. As the Group does not currently issue
equity instruments to extinguish financial liabilities, this is not expected to have any material impact on the
Group’s Consolidated Financial Statements.
2.2 Basis of consolidation
The Group financial statements consolidate the financial statements of AssetCo plc and the entities it controls
(its subsidiaries) drawn up to 31 March each year.
a) Reverse acquisition accounting
Under IFRS 3 “Business Combinations”, the acquisition of AssetCo Group Limited (the “legal subsidiary”) by
the Company (the “legal parent”) has been accounted for as a reverse acquisition and the consolidated IFRS
financial information of the Company is therefore a continuation of the financial information of AssetCo Group
Limited.
52
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Under reverse acquisition accounting, the cost of a business combination is deemed to have been incurred by
the legal subsidiary in the form of equity instruments issued to the owners of the legal parent.
The assets and liabilities of the legal subsidiary (the “acquirer”) are recognised and measured in the
consolidated financial statements at their pre-combination carrying amounts. The assets and liabilities of the
legal parent (the “acquiree”) are fair valued at the acquisition date.
The retained earnings and other reserves recognised in the consolidated financial statements should be
those of the legal subsidiary immediately before the business combination. The equity structure shown in
the consolidated financial statements should reflect the legal parent’s equity structure, including the equity
instruments issued by the legal parent to effect the combination.
Profit and loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of acquisition, as applicable.
b) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies
generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group and continue to be consolidated until
the date that control ceases. Control comprises the power to govern the financial and operating policies of the
investment so as to obtain benefit from its activities and is achieved through direct or indirect ownership of
voting rights or by way of contractual agreement. Minority interests represent the portion of profit or loss and
net assets in subsidiaries that is not held by the Group and is presented separately from parent shareholders
equity within equity in the consolidated balance sheet.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated, unless there is evidence of impairment of the asset, but
considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
c) Business Combinations
Business combinations are accounted for using the purchase method. The cost of an acquisition is measured
as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date
of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
the fair value of the Group’s share of identifiable net assets acquired is recorded as goodwill. If the cost of an
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is immediately
recognised directly in the income statement.
When settlement of all or any part of the cost of a business combination is deferred, the fair value of that
deferred component shall be determined by discounting the amounts payable to their present value at the date
of exchange, taking into account any premium or discount likely to be incurred in settlement.
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AssetCo plc Annual Report & Accounts 2010
53
Notes to the Consolidated
Financial Statements
d) Associates
Associates are entities over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. The Group’s investment in associates includes
goodwill identified on acquisition, net of any accumulated impairment loss.
The Group’s share of the post-acquisition profit or loss of its associates is recognised in the income statement,
and its share of post-acquisition movement in reserves is recognised in reserves. The cumulative post-
acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of
losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables,
the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of
the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the
Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where
necessary to ensure consistency with the policies adopted by the Group.
e) Joint ventures
The Group combines its share of the joint ventures’ individual income and expenses, assets and liabilities and
cash flows on a line-by-line basis with similar items in the Group’s financial statements. The Group recognises
the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the
other venturers. The Group does not recognise its share of profits or losses from the joint venture that result
from the Group’s purchase of assets from the joint venture until it resells the assets to an independent party.
However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the
net realisable value of current assets, or an impairment loss.
f) Recognition of assets and liabilities as part of a business combination
In accordance with IFRS 3: “Business Combinations”, an intangible asset acquired in a business combination is
deemed to have a cost to the Group of its fair value at the acquisition date. The fair value of the intangible
asset reflects market expectations about the probability that the future economic benefits embodied in the
asset will flow to the Group. Where an intangible asset might be separable, but only together with a related
tangible or intangible asset, the group of assets is recognised as a single asset separately from goodwill where
the individual fair values of the assets in the group are not reliably measurable. Where the individual fair value
of the complimentary assets are reliably measurable, the Group recognises them as a single asset provided the
individual assets have similar useful lives.
g) Assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying
amount and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the
sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition.
Management must be committed to the sale which should be expected to qualify for its recognition as a
completed sale within one year from the date of classification.
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AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
2.3 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable from the provision of services in
the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group.
The Group recognises revenue when specific criteria have been met for each of the Group’s activities as
described below. The amount of revenue is not considered to be reliably measurable until all contingencies
relating to the sale have been resolved.
The Group enters into sales involving a range of the Group’s products and services (multiple components) for
example the provision of training, equipment and after sales maintenance. The Group applies the revenue
recognition criteria set out below to each separately identifiable component of the sales transaction in order to
reflect the substance of the transaction. The consideration received for these transactions is allocated to the
separately identifiable component by taking into account the relative fair values of each component.
Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic
benefits associated with the transaction will flow to the entity, and costs incurred or to be incurred can be
measured reliably, and when the criteria for each of the Group’s different activities has been met. The activity
– specific recognition criteria are based on the goods or solutions provided to the customer and the contract
conditions in each case and are described below.
a) Rendering of services
Revenue is only recognised in respect of service contracts when the stage of completion can be measured
reliably, both costs incurred and cost to complete can be measured reliably and it is probable that economic
benefits will flow to the Group.
b) Sale of goods
Revenue from the sale of goods to the emergency services market is recognised when all of the following
conditions have been satisfied:
•
•
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods which is
generally when the goods have been successfully delivered to the customer and accepted;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership
nor effective control over the goods sold which is generally when the goods have been despatched;
•
the amount of revenue can be measured reliably;
•
it is probable that the economic benefits associated with the transaction will flow to the Group; and
•
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
c) Leasing and short-term hire
Revenue from the leasing and short-term hire of assets is recognised in the income statement on a straight-line
basis over the period of the hire.
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AssetCo plc Annual Report & Accounts 2010
55
Notes to the Consolidated
Financial Statements
d) Interest income
Interest is recognised using the effective interest method which calculates the amortised cost of a financial
asset and allocates the interest income over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the net carrying amount of the financial asset.
e) Construction contracts
Revenue comprises the value of construction executed during the year and contracted development sales. The
results for the year include adjustments for the outcome of contracts, including jointly controlled operations,
executed in both the current and preceding years.
(i) Fixed price contracts – Revenue is recognised based upon an internal assessment of the value of works
carried out. This assessment is arrived at after due consideration of the performance against the programme
of works, measurement of the works, detailed evaluation of the costs incurred and comparison to external
certification of the work performed. The amount of profit to be recognised is calculated based on the
proportion that costs to date bear to the total estimated costs to complete. Revenue and profit are not
recognised in the income statement until the outcome of the contract is reasonably certain. Adjustments arise
from claims by customers or third parties in respect of work carried out and claims and variations on customers
or third parties for variations on the original contract. Provision for claims against the Group is made as soon
as it is believed that a liability will arise, but claims and variations made by the Group are not recognised in the
income statement until the outcome is virtually certain. Provision will be made against any potential loss as
soon as it is identified.
(ii) Cost plus contracts – Revenue is recognised based upon costs incurred to date plus any agreed fee.
Where contracts include a target price consideration is given to the impact on revenue of the mechanism for
distributing any savings or additional costs compared to the target price. Any revenue over and above the
target price is recognised once the outcome is virtually certain. Profit is recognised on a constant margin
throughout the life of the contract. Provision will be made against any potential loss as soon as it is identified.
Amounts recoverable on contracts are stated at cost plus attributable profit less any foreseeable losses and
payments on account and are included in receivables and payables respectively.
2.4 Foreign currency translation
a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (“the functional currency”). The consolidated
financial statements are presented in sterling (£), which is the Company’s functional and presentation currency.
There has been no change in the Company’s functional or presentation currency during the year under review.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
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AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Non monetary items measured at historical cost are translated using the exchange rate at the date of
translation.
c) Foreign operations translation
The Group consolidation is prepared in sterling. Income statements of foreign operations are translated into
sterling at the weighted average exchange rates for the period and balance sheets are translated into sterling
at the exchange rate ruling on the balance sheet date. Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as local currency assets and liabilities of the foreign entity and are
translated at the closing rate.
2.5 Government grants
Grants from the government are recognised at their fair value when there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to property, plant and equipment are included in non-current liabilities as deferred
government grants and are credited to the income statement on a straight-line basis over the expected lives of
the related assets.
2.6 Segment reporting
In accordance with IFRS 8: “Operating segments” (effective from 1 January 2009), the Group adopts a
“management approach” to segment reporting such that segmental information is in the form which
management uses internally for assessing segment performance and deciding internally how to allocate
resources to operating segments. Consistent with presentation in the management accounts, the Group
separately discloses the results of its Intergrated Support Services, Vehicle Assembly, Specialist Equipment and
its non-core businesses.
Each of these operating segments is managed separately as each one requires different resources, marketing
approaches, working capital and expertise. All inter-segment transfers are carried out at arm’s length prices.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its
financial statements, except that expenses relating to share-based payments are not included in arriving at the
operating profit of the operating segments.
In addition, corporate assets which are not directly attributable to the business activities of any operating
segment are not allocated to a segment. There have been no changes from prior periods in the measurement
methods used to determine reported segment profit or loss.
2.7 Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised.
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57
Notes to the Consolidated
Financial Statements
All other repairs and maintenance is charged to the income statement during the financial period in which they
are incurred.
Borrowing costs incurred specifically for the construction of an item of property, plant and equipment are
capitalised over the period of completion of the relevant asset. Borrowing costs of £100,000 have been
capitalised in the year. The capitalisation rate used in 5.795%.
Depreciation on assets is calculated using the straight-line method to allocate their cost to their residual values
over their estimated useful lives as follows:
Leasehold improvements
Fixtures and fittings
Equipment, plant and machinery
Operational equipment and motor vehicles
Over the term of the lease
3 – 5 years
2 – 5 years
2 – 25 years
Land is not depreciated.
Operational equipment and motor vehicles that have been provided to customers under long-term contracts are
grouped as “assets under long-term arrangements” in note 15 to the financial statements.
The residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within “other gains” or “other losses” in the income statement.
2.8 Intangible assets
a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries
is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units (separately identifiable cash flows) for the purpose of
impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units
that are expected to benefit from the business combination in which the goodwill arose. The Group allocates
goodwill to each contract that it operates and the underlying business to which the goodwill relates.
b) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software. These costs are amortised over their estimated useful lives of three to five years.
58
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
c) Impairment testing of goodwill, other intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows. As a result, some assets are tested individually for impairment and some are
tested at cash-generating unit level.
Goodwill, other individual assets or cash-generating units that include goodwill, other intangible assets with an
indefinite useful life, and those intangible assets not yet available for use are tested for impairment at least
annually. All other individual assets or cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the carrying amount exceeds the recoverable amount
of the asset or cash-generating unit. The recoverable amount is the higher of fair value, reflecting market
conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. With the
exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
d) Bid costs for PFI/PPP contracts
Bid costs relating to PFI/PPP projects are not carried in the balance sheet as recoverable until the Group has
been appointed preferred bidder or has received an indemnity in respect of the investment or costs, and regards
recoverability of the costs as virtually certain.
Provided that these costs meet the definition of contract costs, then they can be deferred and recognised in
later periods along with an appropriate proportion of revenue.
Property plant and equipment
Where the contracts give rise to the creation of an item of property, plant and equipment, which the Group
leases out under operating lease arrangements pre-contract costs are capitalised as part of the initial cost of
property plant and equipment.
Finance lease arrangements
Where pre-contract costs are incurred in the negotiation of a finance lease arrangement these initial costs are
included in the recoverable amount of the finance lease debtor such that the interest rate implicit in the lease
reflects the costs incurred up front.
Long-term construction contracts
Costs that relate directly to a contract and are incurred in securing the contract are included as part of the
contract costs if they can be separately identified and measured reliably and it is probable that the contract will
be obtained.
2.9 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in
first-out (“FIFO”) method. The cost of finished goods and work in progress comprises design costs, raw
materials, direct labour, other direct costs and related production overheads based on normal operating
capacity. Net realisable value is the estimated selling price in the ordinary course of business, less applicable
variable selling expenses.
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AssetCo plc Annual Report & Accounts 2010
59
Notes to the Consolidated
Financial Statements
2.10 Financial instruments and hedge accounting
a) Financial assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss or
loans and receivables. The classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are also
categorised as held for trading unless they are designated as hedges.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are quoted
in an active market. They are included in current assets, except for maturities greater than twelve months after
the balance sheet. These are classified as non-current assets. The Group’s loans and receivables comprise “trade
and other receivables” and “cash and cash equivalents”.
Trade receivables
Trade receivables are recognised initially at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method, less provision for impairment.
A provision for impairment of trade receivables is established when there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default in payments are considered indicators that the trade receivable is impaired. The amount of the
provision is the difference between the asset’s carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced
through the use of an allowance account, and the amount of the loss is recognised in the income statement
within administrative expenses. When a trade receivable is uncollectible, it is written off against the allowance
account for trade receivables. Subsequent recoveries of amounts previously written off are credited against
administrative expenses in the income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the balance sheet.
b) Financial liabilities and equity instruments
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to
another entity or to exchange financial assets or financial liabilities with another entity under conditions that
are potentially unfavourable to the entity.
An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. Where the contractual obligations of financial instruments, including share capital,
are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities.
Financial liabilities are classified as such in the balance sheet.
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AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance
costs are calculated so as to produce a constant rate or return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments
are debited direct to equity.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings using the effective interest
method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least twelve months after the balance sheet date.
Derivatives
Any gains or losses arising from changes in the fair value of derivatives during the year that do not qualify for
hedge accounting are taken directly to the income statement. The fair value of interest rate swap contracts is
determined by reference to market values for similar instruments.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
2.11 Equity
Issued share capital
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Share premium
The share premium account represents the excess over nominal value of the fair value of consideration received
for equity shares, net of expenses of the share issue.
Reverse acquisition reserve
The reverse acquisition reserve arises on the acquisition of Asfare Group plc by AssetCo Group Limited and
represents the extent to which the reserves of AssetCo Group Limited have been capitalised as a result of the
business combination.
Translation reserve
The translation reserve represents the movement on the translation of the net investment in foreign operations
recorded in foreign currencies at the balance sheet date. Exchange differences arising in the ordinary course of
trading are included in the income statement.
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61
Notes to the Consolidated
Financial Statements
Other reserve
The other reserve represents equity-settled share-based employee remuneration until such share options are
exercised, forfeited, lapse or expire.
2.12 Leases
Leases in which a significant proportion of the risk and rewards of ownership are retained by the lessor and
classified as operating leases.
Finance leases for which the group is a lessee
Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased
asset and the present value of the minimum lease payments. Each lease payment is allocated between
the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The
corresponding rental obligations, net of finance charges, are included in other short-term and other long-term
payables.
The interest element of the finance cost is charged to the income statement over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The leased
asset acquired under finance leases is depreciated over its useful economic life.
Operating leases where the group is a lessee
Lease payments for operating leases are charged to the income statement on a straight-line basis over the
lease term. Lease incentives, if applicable, are spread over the term of the lease.
Finance leases where the group is the lessor
When assets are leased out under a finance lease, the present value of the lease payments is recognised as
revenue and the receivable shown as a finance asset. The difference between the gross receivable and the
present value of the receivable is recognised on a constant periodic rate as finance income.
Operating leases where the group is the lessor
When assets are leased out under an operating lease, the asset is included in the balance sheet based on the
nature of the asset. Rental income is recognised on a straight line basis over the lease term.
In applying this accounting policy during the year management considered the sale of Thermal Imaging Cameras
and training equipment to be assets sold under a finance lease arrangement as the customer will retain these
assets for substantially all of their useful economic lives. The impact that this judgement had on the financial
statements was to increase revenues by £15.8m with a profit impact of £12.9m.
2.13 Income taxes
Income tax payable is provided on taxable profits using tax rates enacted or substantially enacted at the
balance sheet date.
Income tax is recognised in the income statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or
62
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that is it probable that future taxable profit will be
available against which the temporary differences can be utilised.
2.14 Employee benefits
Pension obligations – defined benefit schemes
Group companies operate two defined benefit pension schemes.
Scheme assets are measured at fair values. Scheme liabilities are measured on an actuarial basis using the
projected unit method and are discounted at appropriate high quality corporate bond rates that have terms to
maturity approximating to the terms of the related liability. Appropriate adjustments are made for unrecognised
actuarial gains or losses and past service costs. Past service cost is recognised as an expense on a straight-line
basis over the average period until the benefits become vested. To the extent that benefits are already vested
the Group recognises past service cost immediately.
Actuarial gains and losses are recognised as an expense and charged or credited to the income statement over
the employees’ expected average remaining working lives. The resulting surplus or deficit is presented with
other net assets on the balance sheet. The related deferred tax is shown with other deferred tax balances. A
surplus is recognised only to the extent that it is recoverable by the Group.
The current service cost, past service cost and costs from settlements and curtailments are charged against
administrative expenses. Interest on the scheme liabilities and the expected return on scheme assets are
included in other finance costs.
Pension contributions – defined contribution scheme
For defined contribution schemes, the Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations
once the contributions have been paid.
Contributions to defined contribution schemes are recognised in the income statement during the period in
which they become payable.
Equity settled share-based payment
All share-based payment arrangements are recognised in the financial statements.
All goods and services received in exchange for the grant of any share-based payment are measured at their
fair values using the Black-Scholes options pricing model. Where employees are rewarded using share-based
payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the
instrument granted to the employee. This fair value is appraised at the grant date and excludes the impact of
any non-market vesting conditions.
All equity-settled share-based payments are ultimately recognised as an expense in the income statement with
a corresponding credit to “other reserve”.
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Notes to the Consolidated
Financial Statements
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting
period, based on the best available estimate of the number of share options expected to vest. Estimates
are subsequently revised if there is any indication that the number of share options expected to vest differs
from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No
adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different
to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share
capital, and where appropriate share premium.
Termination benefits
Termination benefits are payable when an employment is terminated by the Group before the normal retirement
date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group
recognises termination benefits when it is demonstrably committed to either: terminating the employment
of current employees according to a detailed formal plan without possibility of withdrawal; or providing
termination benefits as a result of acceptance of an offer of voluntary redundancy. Benefits falling due more
than 12 months after the balance sheet date are discounted to their present value.
2.16 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 the amount has
been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation. The increase in the provision due to passage of time is recognised as an interest
expense.
3. Financial risk management
The Group’s activities expose it to a variety of financial risks: credit risk, market risk (including currency risk,
interest rate risk and price risk) and liquidity risk. The Group’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s
financial performance.
Risk management is carried out under policies approved by the Board of directors. The Board provides written
principles for overall risk management.
64
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
3.1 Financial risk factors
a) Credit risk
The Group’s exposure to credit risk is detailed in Notes 19 and 20.
The Group has a policy for dealing with customers only with an appropriate credit history.
The Group has policies that limit the amount of credit exposure to any financial institution. The credit risk on
liquid funds is limited because the counterparties are financial institutions with strong credit ratings assigned
by international credit-rating agencies. The possibility of material loss is therefore considered to be unlikely.
b) Market risk
Currency risk
The Group does not have any significant foreign currency exposure, as the majority of revenue, purchases and
capital expenditure are denominated in sterling.
Cash flow interest-rate risk
The Group’s policy on managing interest rate risk is subject to regular monitoring of the effect of potential
changes in interest rates on its interest cost with a view to taking suitable actions should exposure reach
certain levels. The Group seeks to limit its exposure to fluctuating interest rates by keeping a significant
proportion of the Group’s borrowings at fixed interest rates through the use of hedge instruments.
Financial assets
The Group holds its surplus funds in short-term bank deposits.
Financial liabilities
The Group’s cash flow interest rate risk arises from long-term borrowings issued at variable rates to finance its
Private Finance Initiative and Public Private Partnership contracts. In order to reduce funding risk and maintain
interest cover, the Group manages the risk by using floating-to-fixed interest rate swaps. Under the swaps, the
Group agrees to exchange, at specific intervals, the difference between fixed contract rates and floating rate
interest amounts, calculated by reference to the agreed notional principal amount. These interest rate swaps
have the effect of converting borrowings from floating rates to fixed rates for a specified period of time.
The Group’s obligations under finance leases carry interest at a fixed rate.
Other price risk
Other price risk, such as changes in the fair value of financial instruments being caused by movements
in commodity or equity prices, is not applicable to the Group’s operations. The Group does not hold any
investments in companies listed on recognised Stock Exchanges and the Group’s operations are not directly
affected by changes in commodity prices.
c) Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. The Group maintains adequate bank balances to fund its
operations.
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AssetCo plc Annual Report & Accounts 2010
65
Notes to the Consolidated
Financial Statements
3.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital in relation to overall financing. Further
information can be found in Note 36 to the financial statements.
4. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
a) Estimates
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
outlined below.
Revenue
Significant contracts entered into during the period contain separable identifiable revenue streams. Separation
is considered appropriate when the Group could enter separate agreements with the customer and satisfy
each of these contract requirements independently of one another or the customer could have engaged with
a third party to provide an element of the contract and this would not impair the Group’s ability to satisfy the
remaining elements of the contract.
Whilst determining the separation of such contracts is area of management judgment attributing a fair value to
each separable element of such contracts, where the contract does not explicitly separate sales price for each
component, is a key accounting estimate when arriving at the result reported in the Group’s income statement.
Construction contract revenue
The stage of completion of any construction contract is assessed by management by taking into consideration
all information available at the reporting date. In this process management carries out significant judgements
about milestones, actual work performed and the estimated costs to complete the work. Further information on
the Group’s accounting policy for construction contracts is provided in note 2.3.
Fair value of financial instruments
Management uses valuation techniques in measuring the fair value of financial instruments where active
market quotes are not available. Details of the assumptions used are given in the notes regarding financial
assets and liabilities. In applying the valuation techniques management makes maximum use of market inputs,
and uses estimates and assumptions that are, as far as possible, consistent with observable data that market
participants would use in pricing the instrument. Where applicable data is not observable, management uses its
best estimate about the assumptions that market participants would make. These estimates may vary from the
actual prices that would be achieved in an arm’s length transaction at the reporting date.
66
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating
units to which goodwill has been allocated. The value-in-use calculation requires the Group to estimate the
future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to
calculate the present value. Actual outcomes could vary significantly from these estimates.
Value in use is determined through the analysis of discounted cash flow forecasts based on financial forecasts
approved by management which takes account of both past performance and expected future market
developments. Management has used a pre-tax discount rate of 14%, equivalent to the weighted average cost
of capital of the Group. This has been determined as reflecting current market assessments of the time value
of money and risks specific to the industry and Group. At the balance sheet date, the carrying value of goodwill
was £47.9m.
Property, plant and equipment
Useful economic lives of property, plant and equipment have been established based on historical experience
and an assessment of the nature of the assets involved. At the balance sheet date, the carrying value of
property, plant and equipment was £74.7m.
IAS 16: “Property, plant and equipment” requires internal costs that are directly attributable to brining an
asset to the location and condition necessary for it to be capable of operating in the manner intended by
management to be capitalised. The group applies standard costing to the property, plant and equipment
capitalised and therefore the time spent by engineers and movements in commodity prices might result in
immaterial variances in cost. Management consider the application of a standard cost by its nature to be an
accounting estimate.
Pensions
The directors have employed the services of an actuary in assessing pension liabilities. However, the directors
recognise that final liabilities and asset returns may differ from actuarial estimates. At the balance sheet date,
the carrying value of the retirement benefit surplus was £429,000.
b) Judgements
The following critical judgements have been made in preparing the financial statements which have a significant
risk of causing a material adjustment to be made to the carrying amounts of assets and liabilities within the
next financial year.
Recognition of a sale under lease arrangements
Where management consider, in substance, the sale of assets has taken place under a leasing arrangement the
application requires management to determine whether it is the lessor or the lessee who substantially enjoys
the risks and rewards of ownership under the lease arrangement. In cases where management concludes that
the risks and rewards of ownership have been substantially transferred to the lessee the asset is treated as if
it were a finance lease. Where management concludes that the Group has substantially retained the risks and
rewards of ownership the sale is treated as if it were an operating lease.
Residual values
Given the nature of the Group’s business, the main asset in the balance sheet is the vehicle fleet. The value
at the end of the rental life will depend on the market for those vehicles at the time of disposal. Judgement is
therefore required in the estimation of disposal value of certain fleet vehicles in the balance sheet.
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AssetCo plc Annual Report & Accounts 2010
67
Notes to the Consolidated
Financial Statements
Post-employment benefits
Application of IAS 19: "Employee Benefits", requires the exercise of judgement in relation to setting the
assumptions used by the actuaries in assessing the financial position of each scheme. The Group determines the
assumptions to be adopted in discussion with its actuaries, and believes these assumptions to be in line with
UK generally accepted practice, but the application of different assumptions could have a significant effect on
the amounts reflected in the Income Statement and Balance Sheet in respect of post-employment benefits. The
sensitivity of principal scheme liabilities to changes in the assumptions used by actuaries is set out in Note 17.
Taxation
Significant judgment is required in determining the Group’s provision for tax. There are many transactions and
calculations for which the ultimate tax determination is uncertain during the ordinary course of business. As
a result, the exercising of judgment is required in order to assess the exposures in these areas and set the
appropriate level of provision.
Capitalised bid costs
Directly attributable bid costs in relation to separately identifiable revenue generating projects are capitalised
to the extent they can be reliably measured. The nature of the business’ long term contracts dictates one off
revenue generating projects come to fruition on an annual basis which creates the opportunity for such costs to
be capitalised.
Significant judgement is required when classifying costs as bid costs and in determining how the costs are
capitalised when applying the Group’s accounting policies.
Deferred tax assets
The assessment of the probability of future taxable income in which deferred tax assets can be utilised is
based on the Group’s latest approved budget forecast, which is adjusted for significant non-taxable income
and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the numerous
jurisdictions in which the Group operates are also carefully taken into consideration. If a positive forecast of
taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a
time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are
subject to certain legal or economic limits or uncertainties is assessed individually by management based on the
specific facts and circumstances.
The carrying value of deferred the tax asset relating to losses carried forward is £3.9m.
Provisions
The Group is currently defending certain lawsuits where the actual outcome may vary from the amount
recognised in the financial statements. None of the provisions will be discussed here in further detail so as not
to seriously prejudice the Group’s position in the related disputes.
The amount recognised for warranties for which customers are covered for the cost of repairs is estimated
based on management’s past experience and the future expectations of deficits.
68
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
5. Segmental Reporting
For management purposes, the Group is organised into one main business segment as follows:
Fire and Rescue Services – provision of management services to the fire and rescue market:
Year ended 31 March 2010
Segment revenue
Segment operating profit/(loss)
Net segment finance costs
Segment profit/(loss) before tax
Depreciation and amortisation
Segment assets
Cost of acquired property, plant and equipment
Segment liabilities
Fire and Rescue
£’000
Held for sale
£’000
Discontinued
operations
£’000
Consolidation
adjustments
£’000
45,231
17,521
6,627
10,894
6,743
176,219
8,073
120,535
16,165
892
489
403
245
18,427
–
14,597
12,166
(5,799)
–
(5,699)
53
–
–
–
–
(100)
–
(1,204)
–
–
–
(1,304)
Total
£’000
73,562
12,514
7,116
6,802
7,041
194,646
8,073
133,828
The consolidation adjustments affecting the segment profit before tax relate to the charge for share-based
payments (£100,000).
The depreciation and amortisation charges for each segment have been reported within the segment profit
before tax.
Year ended 31 March 2009
Segment revenue
Segment operating profit/(loss)
Net segment finance costs
Segment profit/(loss) before tax
Depreciation and amortisation
Segment assets
Cost of acquired property, plant and equipment
Segment liabilities
Fire and
Rescue
Restated
£’000
34,050
10,982
5,036
5,946
3,784
153,259
10,462
111,401
Held for
sale
Restated
£’000
18,330
4,941
1,116
3,825
245
30,654
444
19,324
Discontinued
operations
Restated
£’000
Consolidation
adjustments
Restated
£’000
31,393
(3,542)
–
(3,542)
53
14,883
–
11,681
–
(140)
–
(4,695)
–
–
–
4,555
Total
Restated
£’000
83,773
12,241
6,152
1,534
6,546
198,796
10,906
146,961
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AssetCo plc Annual Report & Accounts 2010
69
Notes to the Consolidated
Financial Statements
Geographical analysis
The Group manages its business segments in the UK, which is the home country of the parent Company.
The revenue analysis below is based on the location of the service provided or sale made.
Revenue - continuing operations
UK
2010
£’000
2009
Restated
£’000
45,231
34,050
The major customers which make up the above revenue stream are London Fire and Emergency Planning
Authority and Lincolnshire Fire and Rescue Service.
The majority of current assets are located in the UK where most of the capital expenditure is also incurred.
Non current assets
UK
Europe
Capital expenditure
UK
Europe
6. Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations
Managed services
Support services
Leasing and contract hire
Sale of goods
Revenue
Discontinued operations
Leasing and contract hire
Sale of goods
70
AssetCo plc Annual Report & Accounts 2010
2010
£’000
135,964
556
136,520
2010
£’000
8,073
–
8,073
2010
£’000
36,132
5,795
2,539
765
45,231
313
28,018
73,562
2009
Restated
£’000
144,359
680
145,039
2009
Restated
£’000
10,902
4
10,906
2009
Restated
£’000
30,811
–
2,604
635
34,050
–
49,723
83,773
Notes to the Consolidated
Financial Statements
7. Profit for the year
The profit for the year has been arrived at after charging/(crediting):
Net foreign exchange gains
Research and developments costs
Government grants towards employment costs
Depreciation of property, plant and equipment
Staff costs (Note 13)
Impairment loss recognised on trade receivables
8. Auditor’s remuneration
Other non audit fees
Fees payable to the Company’s auditor for the audit of the Group’s financial statements
Fees payable to the Company’s auditor and their associates for other services to the Group:
Corporate finance services
9. Finance income and finance costs
Finance income
Interest income on short-term bank deposits
Finance costs
Interest on bank borrowings and finance leases
Increase in valuation of shares classified as financial liabilities
2010
£’000
–
–
(6)
7,041
6,533
(2)
2010
£’000
73
127
200
2010
£’000
–
2010
£’000
2009
Restated
£’000
(1)
1
(205)
6,546
8,205
11
2009
Restated
£’000
73
147
220
2009
Restated
£’000
80
2009
Restated
£’000
416
706
5,888
1,155
7,043
5,547
192
5,739
Included within administrative expenses is a gain of £2,000 (2009: loss £11,000) in respect of the impairment of
trade receivables.
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AssetCo plc Annual Report & Accounts 2010
71
Notes to the Consolidated
Financial Statements
10. Taxation
Current tax
Domestic tax
Current tax on income for the period
Foreign tax
Current tax on income for the period
Current tax charge/(credit)
Deferred tax
Deferred tax expense relating to the origination and reversal of temporary differences
Deferred tax expense relating to financial instruments
Deferred tax charge/(credit)
Taxation
2010
£’000
838
20
858
3,308
365
3,673
4,531
Corporation tax is calculated at 28% (2009: 28%) of the estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.
Tax reconciliation
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to profits of the consolidated entities as follows:
2010
£’000
12,098
(5,296)
6,802
1,905
(163)
1,879
(85)
(112)
(71)
(7)
36
1,149
4,531
Profit before tax (continuing operations)
(Loss)/profit for the year from discontinued operations
Profit for the year before taxation
Tax calculated at domestic tax rates applicable to profits
Effect of:
Income not subject to tax
Expenses not deductible for tax purposes
Losses carried forwards
Utilisation of previously unrecognised tax losses
Amortisation of intangible assets
Rate difference on tax charge
Capital gain on disposal more than accounting profit
Adjustment in respect of prior periods – deferred tax
Total tax charge for the period
72
AssetCo plc Annual Report & Accounts 2010
2009
Restated
£’000
–
(65)
(65)
1,199
(1,275)
(76)
(141)
2009
Restated
£’000
1,251
283
1,534
430
(16)
547
–
83
149
69
–
(1,403)
(141)
Notes to the Consolidated
Financial Statements
11. Earnings per share
a) Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by
the weighted average number of ordinary shares in issue during the year.
Profit attributable to equity holders of the Company
Loss/(profit) from discontinued operations
Profit from continuing operations used to determine basic earnings per share
Weighted average number of ordinary shares
Basic earnings per share (pence per share)
From continuing and discontinued operations
Profit attributable to equity holders of the Company
Weighted average number of ordinary shares in issue
Basic earnings per share (pence per share)
2010
£’000
2,271
5,296
7,567
2009
Restated
£’000
1,675
(283)
1,392
84,992,740
72,528,482
8.9
1.9
2010
£’000
2,271
2009
Restated
£’000
1,675
84,992,740
72,528,482
2.7
2.3
b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. Dilutive potential ordinary shares
comprise share options and warrants. A calculation is made to determine the number of shares that could have
been acquired at fair value (determined as the average annual market share price of the Company’s shares)
based on the monetary value of the subscription rights attached to outstanding share options and warrants.
The number of shares calculated as above is compared with the number of shares that would have been issued
assuming the exercise of the share options and warrants.
From continuing operations
Profit attributable to equity holders of the Company
Loss/(profit) from discontinued operations
Profit from continuing operations used to determine diluted earnings per share
Weighted average number of ordinary shares
Adjustments for:
– share options and warrants deemed to be issued
Weighted average number of ordinary shares used for diluted earnings per share
Diluted earnings per share (pence per share)
From continuing and discontinued operations
Profit attributable to equity holders of the Company
Weighted average number of ordinary shares
Adjustments for:
2010
£’000
2,271
5,296
7,567
2009
Restated
£’000
1,675
(283)
1,392
84,992,740
72,528,482
–
1,585,965
84,992,740
74,114,447
8.9
1.9
2010
£’000
2,271
2009
Restated
£’000
1,675
84,992,740
72,528,482
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– share options and warrants deemed to be issued
–
1,585,965
Weighted average number of ordinary shares used for diluted earnings per share
84,992,740
74,114,447
AssetCo plc Annual Report & Accounts 2010
73
Notes to the Consolidated
Financial Statements
Diluted earnings per share (pence per share)
2.7
2.3
12. Expenses by nature
Other direct costs
Employee benefit expense (Note 13)
Depreciation (Note 15)
Other indirect costs
Changes in inventories of finished goods and work in progress
Total cost of sales and administrative expenses
13. Employee benefit expense
Wages and salaries
Social security costs
Pension costs – defined benefit plans (Note 17)
Other pension contributions
Share-based payments (Note 23)
The average monthly number of employees (excluding non-executive directors) was:
Directors
Production and operations
Sales, marketing and distribution
Administration
2010
£’000
8,270
6,533
7,041
8,847
(13)
30,678
2010
£’000
5,659
546
228
–
100
2009
Restated
£’000
6,844
8,205
6,546
1,685
(69)
23,211
2009
Restated
£’000
7,027
741
292
5
140
6,533
8,205
2010
Number
2009
Number
2
110
1
28
141
4
132
1
62
199
The decrease in the average monthly number of employees during the year ended 31 March 2010 is due to the
effect of the change in focus of the Group towards the Fire and Rescue sector.
14. Dividends
A final dividend of 1.5p (2009: 1.25p per share) has been recommended.
74
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
15. Property, plant and equipment
Group
Cost
At 1 April 2008
Additions
Disposals
On acquisition
Transferred to Intangible Assets
Exchange differences
At 31 March 2009
Additions
Disposals
On acquisition
Leasehold
land and
buildings
£’000
Leasehold
improvements
£’000
Fixtures
and
fittings
£’000
Equipment,
plant and
machinery
£’000
Assets under
long-term
arrangements
£’000
1,200
2,681
–
–
–
–
–
18
(23)
-
-
99
1,432
140
(28)
–
–
81
35,071
286
(11,655)
18
–
44
1,200
2,775
1,625
23,764
-
-
–
Transfers to assets held for resale
(1,200)
At 31 March 2010
Depreciation
At 1 April 2008
Disposals
Charge for the year
Exchange differences
At 31 March 2009
Disposals
Charge for the year
Transfers to assets held for resale
At 31 March 2010
Net book amount
At 31 March 2010
At 31 March 2009
–
31
–
8
-
39
–
–
(39)
–
–
1,161
-
-
-
(531)
2,244
595
(14)
192
13
786
–
156
(180)
762
1,482
1,989
–
–
–
(1,053)
572
503
–
43
(16,726)
7,584
1,096
26,094
(25)
132
45
1,248
–
68
(861)
455
117
377
(7,712)
2,430
17
20,829
482
(15,646)
5,665
1,919
2,935
Total
£’000
124,365
10,906
(12,965)
18
(1,810)
224
120,738
8,073
(3,052)
43
(19,510)
106,292
47,638
(10,398)
6,546
75
43,861
(2,598)
7,041
(16,726)
31,578
74,714
76,877
83,981
10,462
(1,259)
–
(1,810)
–
91,374
7,570
(3,052)
–
–
95,892
19,822
(2,647)
3,784
–
20,959
(2,598)
6,335
–
24,696
71,196
70,415
The net book value of assets held under finance leases amounts to £70.7 m (2009: £70.4m).
Assets held under long-term arrangements
Assets held under long-term arrangements comprise principally of items of operational equipment and motor
vehicles that have been provided to customers under the Group’s Private Finance Initiative and Public Private
Partnership long-term contracts.
Depreciation
Depreciation expense of £6.382m (2009: £5.4m) has been charged in cost of sales and £0.7m (2009: £1.1m) in
administrative expenses.
In 2009, as a result of management review revisions were made to the residual values and useful economic lives
of certain assets. These revisions resulted in residual values ranging from £10,000 to £25,000 and corresponding
lives of 24 years.
This had resulted in a £1.5m reduction in the equivalent depreciation charge for the year ended 31 March 2009.
The impact on future profitability remains similar over the course of the life of the assets.
AssetCo plc Annual Report & Accounts 2010
75
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Notes to the Consolidated
Financial Statements
Security
Leasehold land and buildings with a carrying amount of £1.154m (2009: £1.161m) have been pledged to secure
borrowings of the Group (see Note 24) under a mortgage. The Group is not permitted to pledge these assets as
security for other borrowings or to sell them to another entity.
In addition, the Group’s obligations under finance leases (see Note 24) are secured by the lessors’ title to the
leased assets, which have a carrying amount of £ 2.047m (2009: £3.881m).
Assets under long-term arrangements include £ 70.7m (2009: £70.4m) in respect of assets secured by the lessor.
16. Intangible assets
Group
Cost
At 1 April 2008
Acquisitions
Additions
Reclassified from tangible fixed assets
At 31 March 2009
Additions
Reclassified to assets held for sale
At 31 March 2010
Amortisation
At 1 April 2008
Charge for the year
At 31 March 2009
Charge for the year
At 31 March 2010
Net book amount
At 31 March 2010
At 31 March 2009
Goodwill
£’000
Bid costs
£’000
Software
development
costs
£’000
54,060
80
2,941
–
57,081
956
(10,132)
47,905
–
–
–
–
–
1,089
–
1,801
1,810
4,700
2,687
–
7,387
–
171
171
331
502
515
–
702
-
1,217
26
–
1,243
28
52
80
109
189
Total
£’000
55,664
80
5,444
1,810
62,998
3,669
(10,132)
56,535
28
223
251
440
691
47,905
57,081
6,885
4,529
1,054
1,137
55,844
62,747
Goodwill
The main changes in the carrying amounts of goodwill result from the reclassification of goodwill associated
with divisions previously known as Vehicle Assembly and Specialist Equipment to assets held for resale.
76
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
For the purposes of annual impairment testing goodwill acquired in a business combination is allocated to the
cash generating units (“CGUs”) the synergies of the are expected to benefit from the synergies of the business
combination in which the goodwill arises. The carrying amount of goodwill has been allocated as follows:
Fire and Rescue Services
Specialist Equipment
Vehicle Assembly
2010
£’000
47,905
–
–
47,905
2009
Restated
£’000
44,207
9,159
3,715
57,081
The Group tests goodwill for impairment annually or more frequently if there are indications that goodwill might
be impaired.
The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for
the value in use calculations are those regarding discount rates, growth rates and expected changes to selling
prices and direct costs during the period. Management estimates discount rates using post-tax rates that reflect
current market assessments of the time value of money and the risks specific to the CGUs. The discount rate
used at 31 March 2010 was 13%. The growth rates are based on internal growth forecasts. Changes in selling
prices and direct costs are based on past practices and expectations of future changes in the market, however
management expects constant margins which have been based on past experience.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by
management for the next ten years and extrapolates cash flows for the following ten years based on an
estimated growth rate of 2.0%. This rate does not exceed the average long-term growth rate for the relevant
markets based on Current Retail Price Index.
Fire and Rescue Services
No impairment of goodwill has been recognised in respect of Emergency Services as the two contracts to
which the goodwill relates, those with the London Fire and Emergency Planning Authority and the Lincolnshire
Fire and Rescue Service, continue to grow in terms of revenue and profitability through the provision of
additional services and improved cost control. These two contracts have remaining lives of 11 years and 16 years
respectively. The Fire and Rescue division is particularly sensitive to the discount rate and an increase to 14%
would result in £4.7m impairment against goodwill. Similarly, a reduction of the forecast growth rate of 1%
would result in £4.8m impairment against goodwill.
Specialist equipment and vehicle assembly
No impairment of goodwill has been recognised within the Vehicle and Emergency Equipment CGU. This goodwill
has now been reclassified as an asset held for sale. The directors consider no impairment of assets exists due
to the receipt of written outline purchase offers in excess of net assets.
Computer software
In accordance with IAS 38, “Intangible Assets” computer software has been classified as an intangible asset.
Intangible assets recognised in respect of computer software costs are not internally generated and are
considered to have finite lives of three years, the period over which the asset is amortised. The amortisation
charge is included within administrative expenses in the income statement.
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AssetCo plc Annual Report & Accounts 2010
77
Notes to the Consolidated
Financial Statements
Bid costs
Bid costs are internally generated and are capitalised once preferred bidder status has been secured. They are
considered to have finite lives which equate to the length of the contract they have secured.
17. Retirement benefit obligations
The AssetCo Pension Scheme
The AssetCo Pension Scheme (formerly The Brook Henderson Pension Scheme) commenced on
11 October 2003 as a defined benefit pension scheme based in the United Kingdom. The assets of the scheme
are administered by trustees in a fund independent from those of the Group. The last full actuarial valuation
was carried out as at 31 March 2010 and showed a surplus of £725,000 (2009: £749,000).
Todd Research Limited Retirement Benefits Scheme
The Todd Research Limited Retirement Benefits Scheme was originally established for the benefit of certain
employees based in the United Kingdom. The defined benefit scheme is now closed to new members. The assets
of the scheme are administered by trustees in a fund independent from those of the Group.
The information set out overleaf is in respect of both The AssetCo Pension Scheme and the Todd Research
Limited Retirement Benefit Scheme.
Balance sheet surplus for:
Retirement benefits – surplus
Income statement credit for:
Retirement benefits
The amounts recognised in the balance sheet are determined as follows:
Fair value of plan assets
Present value of funded obligations
Present value of over-funded obligations
Unrecognised actuarial gains
Asset in the balance sheet
78
AssetCo plc Annual Report & Accounts 2010
Group
2010
£’000
429
Group
2010
£’000
–
Group
2010
£’000
7,111
(6,386)
725
(296)
429
Group
Restated
2009
£’000
429
Group
Restated
2009
£’000
Group
Restated
2008
£’000
429
Group
Restated
2008
£’000
–
(100)
Group
Restated
2009
£’000
5,171
(4,422)
749
(320)
429
Group
Restated
2008
£’000
6,424
(4,376)
2,048
(1,619)
429
Notes to the Consolidated
Financial Statements
The unrecognised actuarial gains are to be deferred over the estimated working lives of the members of The
AssetCo Pension Scheme and the Todd Research Limited retirement benefit scheme.
The movement in the fair value of scheme assets during the year is as follows:
Beginning of year
Expected return on plan assets
Actuarial gains/(losses)
Employer contributions
Employee contributions
Benefits paid
End of year
Group
2010
£’000
5,171
282
1,547
272
35
(196)
7,111
Group
Restated
2009
£’000
Group
Restated
2008
£’000
6,424
415
(1,586)
264
43
(389)
5,171
6,010
349
(464)
537
61
(69)
6,424
The movement in the fair value of the defined benefit obligation during the year is as follows:
Beginning of year
Current service cost
Interest cost
Contributions by members
Actuarial gains/(losses)
Benefits paid
Additional contribution by employer
Change of assumptions
Curtailment
End of year
The amounts recognised in the income statement are as follows:
Current service cost
Interest cost
Expected return on plan assets
Net actuarial gains recognised during the year
Curtailment
Total
Group
2010
£’000
(4,422)
(212)
(298)
(25)
62
196
–
(1,687)
–
(6,386)
Group
2010
£’000
212
298
(282)
–
–
228
Group
Restated
2009
£’000
Group
Restated
2008
£’000
(4,376)
(5,723)
(284)
(274)
(43)
(100)
389
–
454
(188)
(598)
(305)
(61)
(161)
69
42
2,361
–
(4,422)
(4,376)
Group
Restated
2009
£’000
Group
Restated
2008
£’000
324
274
(415)
(79)
188
292
598
305
(349)
(100)
–
454
Of the total, £228,000 (2009: £292,000) has been included in staff costs within administrative expenses.
The actual return on plan assets was a gain of £1,829,000 (2009 loss: £1,171,000).
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AssetCo plc Annual Report & Accounts 2010
79
Notes to the Consolidated
Financial Statements
The estimated contributions expected to be paid to the two schemes during the current financial year is
approximately £500,000.
The principal actuarial assumptions used were as follows:
Discount rate
Expected return on plan assets
Future salary increases
Future pension increases
Inflation
2010
%
5.6
6.7
2.0
2009
%
6.7
6.5
2.25
2008
%
6.3
6.5
2.25
2.8 – 3.25
2.1 – 2.75
2.1 – 2.75
3.25
2.25
2.75
A range of assumptions is quoted for the year ended 31 March 2010 as the actuarial valuations for the two
schemes were undertaken by two different actuaries.
Mortality rate
Assumptions regarding future mortality experience are set based on advice, published statistics and experience.
The average life expectancy of a pensioner retiring at age 60 on the balance sheet date, is estimated using the
following industry-standard mortality tables:
Male
Female
2010
PMA92
PFA92
2009
PMA92
PFA92
2008
PMA92
PFA92
The average life expectancy in years of a pensioner retiring at age 60 twenty years after the balance sheet
date, is estimated using the following industry-standard mortality tables:
Male
Female
2010
PMA92
PFA92
2009
PMA92
PFA92
2008
PMA92
PFA92
The analysis of the assets of the two schemes and the expected rate of return at the balance sheet date was as
follows:
Equities
Government bonds
Corporate bonds
Cash and cash equivalents
Total
Expected return
Fair value of assets
2010
2009
2008
%
7.4
4.4
5.6
0.5 –
6.7
%
7.5
4.5
6.3
6.5
%
7.5
4.5
6.3
–
6.5
2010
£’000
4,615
14
2,440
42
7,111
2009
£’000
3,032
–
2,098
41
5,171
2008
£’000
3,318
1,584
1,522
–
6,424
The overall expected rate of return is determined based on past experience and expectations regarding future
market conditions.
80
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Amounts in the current and previous years are as follows:
Defined benefit obligation
Plan assets
Surplus/(liability)
Experience adjustments
18. Inventories
Raw materials and consumables
Finished goods and goods for resale
2006
520
431
(62)
(104)
2007
5,723
6,010
287
272
2008
4,376
6,424
429
(161)
Group
2010
£’000
201
–
201
2009
4,422
5,171
429
(100)
Group
2009
Restated
£’000
2,138
4,469
6,607
2010
6,386
7,111
725
62
Group
2008
Restated
£’000
1,941
3,969
5,910
The net movement in the inventory provision resulted in a £12,000 credit (2009: £60,000 credit) being
recognised in cost of sales. Inventories with a carrying amount of £0.2m (2009: £6.607m) have been pledged as
security for some of the Group’s bank loans.
19. Trade and other receivables
Trade receivables
Less: impairment of receivables
Trade receivables – after impairment
Other receivables
Finance lease debtor (note 35)
Prepayments and accrued income
Corporation tax recoverable
Group
2010
£’000
1,544
(9)
1,535
154
17,199
9,126
–
Group
2009
Restated
£’000
Group
2008
Restated
£’000
8,588
(11)
8,577
1,669
4,991
8,825
–
14,664
(273)
14,391
970
–
6,013
140
21,514
28,014
24,062
The Group has impaired fully all receivables that are considered to be doubtful based on the difference between
the carrying amount and the present value of estimated future cash flows determined by reference to past
experience, the ageing of the debt and the financial standing of the customer. Prior to conducting business
with a new customer, appropriate credit checks are undertaken with a reputable international credit reference
agency.
The movement in the provision for impairment of trade receivables is as follows:
At the beginning of the year
Impairment losses recognized
Amounts written off as uncollectible
Amounts recovered during the year
At the end of the year
Group
2010
£’000
11
9
(11)
–
9
Group
2009
Restated
£’000
Group
2008
Restated
£’000
273
11
(265)
(8)
11
477
51
(195)
(60)
273
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A
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AssetCo plc Annual Report & Accounts 2010
81
Notes to the Consolidated
Financial Statements
The ageing of overdue trade receivables is as follows:
60 – 90 days
90 – 120 days
Total
Group
2010
£’000
47
9
56
Group
2009
Restated
£’000
173
273
446
Group
2008
Restated
£’000
21
252
273
There is no impairment in respect of other receivables.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
20. Cash and cash equivalents
Cash and cash equivalents
Short-term deposits
Group
2010
£’000
13,697
–
13,697
Group
2009
Restated
£’000
4,533
17,965
22,498
Group
2008
Restated
£’000
4,219
8,677
12,896
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:
Cash and cash equivalents
Bank overdrafts
Group
2010
£’000
13,697
(1,210)
12,487
Group
2009
Restated
£’000
22,498
(3,693)
18,805
Group
2008
Restated
£’000
12,896
(12,502)
394
At 31 March 2010, the cash at bank and short-term deposits were held with five different international banks
(2009: ten). Financial assets are placed with banks at floating rates over periods ranging from overnight to
three months depending upon forecast cash flow movements and earn interest at prevailing rates in the money
market.
Included within the cash balance are sums amounting to £11.1m which were transmitted from clients prior to the
year end. These amounts were received shortly after the year end.
82
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
21. Assets held for sale
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
Goodwill
Property, plant and equipment
Trade and other receivables
Inventories
Total assets classified as held for sale
Finance lease liabilities
Borrowings
Trade and other payables
Total liabilities associated with assets classified as held for sale
Net assets of disposal group
Group
2010
£’000
9,196
2,784
2,916
2,060
16,956
75
3,950
2,668
6,693
10,263
The directors are satisfied the above net asset value will be realised upon sale.
The net cash flows attributable to assets held for sale and discontinued operations are as follows:
Net cash flow
Earnings per share in relation to discontinued operations are as follows:
Basic
Diluted
2010
£’000
(9,556)
2009
Restated
£’000
575
2010
(6.2)p
(6.2)p
2009
Restated
0.4p
0.4p
22. Derivative financial instruments
Interest rate swaps
At 31 March 2010, three cash flow hedge arrangements were in place covering loans of £39.8m (2009: £44.5m)
at a fixed rate of 5.795% payable monthly, £7.9m (2009: £7.9m) at a fixed rate of 4.63% monthly and £3.8m
(2009: £3.7m) at a fixed rate of 3.43% monthly.
The fair value of the hedge arrangements at 31 March 2010 represents a liability of £5.821m (2009: liability of
£7.125m).
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AssetCo plc Annual Report & Accounts 2010
83
Notes to the Consolidated
Financial Statements
These amounts are based on market values of equivalent instruments at the balance sheet date. An analysis
of the financial instruments, their fair values at reporting date and the nature of risks being hedged is set out
below.
Title
Description
Nature of
risk being
hedged
Period
termination
dates
HBOS Swap
Co-Op Swap
Cash Flow Hedge Interest Rate Risk
Cash Flow Hedge Interest Rate Risk
31 March 2021
9 April 2026
Barclays Swap
Cash Flow Hedge Interest Rate Risk 14 October 2010
Total
Swap fair
value post
settlement
31.03.09
£’000
(6,143)
(775)
(207)
(7,125)
Settlement
paid
£’000
Fair value
movement
in the year
£’000
540
240
132
912
371
30
(9)
392
Swap fair
value post
settlement
31.03.10
£’000
(5,232)
(505)
(84)
(5,821)
Details of the prior year adjustment in respect of the Group’s hedge arrangements can be found in note 39 to
the financial statements.
Title
Description
Nature of
risk being
hedged
Period
termination
dates
HBOS Swap
Co-Op Swap
Cash Flow Hedge Interest Rate Risk
Cash Flow Hedge Interest Rate Risk
31 March 2021
9 April 2026
Barclays Swap
Cash Flow Hedge Interest Rate Risk 14 October 2010
Total
23. Share capital
At 1 April 2008
Issue of ordinary shares
At 1 April 2009
Issue of ordinary shares
At 31 March 2010
Swap fair
value post
settlement
31.03.08
Restated
£’000
(2,001)
(189)
–
(2,190)
Settlement
paid
£’000
2,083
318
24
2,425
Fair value
movement
in the year
Restated
£’000
(6,225)
(904)
(231)
(7,360)
Swap fair
value post
settlement
31.03.09
Restated
£’000
(6,143)
(775)
(207)
(7,125)
Number of
Shares
71,832,554
1,546,852
73,379,406
17,333,333
90,712,739
Share capital
Restated
£’000
17,958
387
18,345
4,333
22,678
Share
premium
Restated
£’000
25,197
918
26,115
3,173
29,288
Total
Restated
£’000
43,155
1,305
44,460
7,506
51,966
The total authorised number of ordinary shares is 95,000,000 (2009: 95,000,000) with a nominal value of 25
pence per share (2009: 25 pence per share). All issued shares are fully paid.
Equity component of compound financial instruments
In January 2009, 15 million £1 preference shares were issued at nominal value. At inception £7,045,000 of these
shares were classified as a financial liability with the remaining £7,917,000 being classified as equity.
These preference shares are repayable at par value in five years from the date of issue although there are
warrants associated with the shares which can be converted into AssetCo plc shares at 61.2p. AssetCo can repay
the preference shares, under certain conditions on the second anniversary and two thirds of the warrants vest
on this date. After this date 100% of the warrants are available to JO Hambro.
84
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Share-based payments
The charge for the year in respect of share-based payments, comprising share options and warrants, is £100,000
(2009: £196,000).
a) Share options
Share options are granted to directors and to selected employees. The Group has no legal or constructive
obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average exercise prices are
as follows:
31 March 2010
31 March 2009
At 1 April
Granted
Exercised
Forfeited
Lapsed
At 31 March
Average
exercise
price
£ per share
Options
1.76
1,352,603
Average
exercise
price
£ per share
1.77
–
Options
1,819,327
–
–
–
– –
(140,000)
1.82
(466,724)
– –
–
1,212,603
1.76
1,352,603
–
–
2.29
–
1.70
Out of the 1,212,603 outstanding options (2009: 1,352,603), none (2009: 290,000) were exercisable.
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Expiry date
4 December 2013
29 March 2017
30 July 2017
30 July 2007
22 November 2017
22 November 2017
28 November 2017
Exercise price
£ per share
1.00
1.45
2.30
3.00
2.30
3.00
2.04
Shares
31.3.10
210,000
663,103
105,000
140,000
50,000
20,000
24,500
Shares
31.3.09
210,000
698,103
120,000
160,000
100,000
40,000
24,500
1,212,603
1,352,603
The fair value of options at grant date were determined using the Black-Scholes method.
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AssetCo plc Annual Report & Accounts 2010
85
Notes to the Consolidated
Financial Statements
24. Borrowings
Non-current
Bank borrowings
Finance lease liabilities
Other loans
Current
Bank overdrafts
Bank borrowings
Finance lease liabilities
Other loans
Total borrowings
Group
2010
£’000
12,578
54,689
–
67,267
Group
2010
£’000
1,210
5,141
8,561
–
14,912
82,179
Group
2009
Restated
£’000
27,693
53,983
–
81,676
Group
2009
Restated
£’000
3,693
4,319
8,831
–
16,843
98,519
Group
2008
Restated
£’000
18,961
50,002
1,007
69,970
Group
2008
Restated
£’000
12,502
5,989
8,084
250
26,825
96,795
Total borrowings include secured liabilities of £82,179m (2009: £98,519m). The Group’s bank loans and
overdrafts are secured by a debenture over the assets of the Group.
The decrease in total borrowings is due to the reduction in non recourse finance due to significant repayments
made in the year.
Finance lease liabilities principally relate to assets provided to customers under long-term arrangements.
The repayment dates of the Group’s borrowings are as follows:
Group
2010
£’000
14,912
13,782
32,645
20,840
82,179
Group
2009
Restated
£’000
16,843
21,353
33,999
26,324
98,519
Group
2008
Restated
£’000
26,825
9,169
32,944
27,857
97,795
Less than one year
One to two years
Two to five years
After five years
86
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Bank borrowings
Bank borrowings mature until November 2016.
Details of the Group’s bank borrowings at 31 March 2010 are summarised as follows:
Date
November 2007
January 2008
July 2008
September 2008
September 2008
March 2009
Initial loan
£16m
£1.5m
£4.5m
£4.1m
£0.96m
£4m
Term
9 years
5 years
20 months
5 years
7 years
4 years
Rate
1.75% over 1 month Libor
1.6% over 3 month Libor
2.5% over 3 month Libor
2.75% over 1 month Libor
2.5% over 1 month Libor
2% over base
At 31 March 2010, the Group had six principal loans with four different financial institutions. In May 2010, the
loan obtained in July 2008 was repaid in full.
The fair value of the non-current borrowings is as follows:
Bank borrowings
Finance lease liabilities
Other loans
Group
2010
£’000
12,578
54,689
–
67,267
Group
2009
Restated
£’000
27,693
53,983
–
81,676
Group
2008
Restated
£’000
18,961
50,002
1,007
69,970
The fair value of current borrowings does not materially differ from their carrying amount, as the impact of
discounting is not significant. The fair values are based on cash flows discounted using a rate based on the
borrowing rate of 6.5% (2009: 6.5%).
The carrying amounts of short-term borrowings approximate their fair value.
The facilities expiring within one year are annual facilities subject to review at various dates during 2010.
The other facilities have been arranged to help finance the ongoing build programme for the London Fire and
Emergency Planning Authority and the Lincolnshire Fire and Rescue Service.
Finance lease liabilities
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of
default.
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AssetCo plc Annual Report & Accounts 2010
87
Notes to the Consolidated
Financial Statements
Minimum lease payments under finance lease liabilities are as follows:
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years
Future finance charges on finance leases
Present value of minimum lease payments
Group
2010
£’000
10,956
45,325
24,677
80,958
(17,708)
63,250
Group
2009
Restated
£’000
12,182
42,149
26,056
80,387
(17,573)
62,814
Group
2008
Restated
£’000
11,287
37,016
25,834
74,137
(16,051)
58,086
Finance lease liabilities are secured by a first and only debenture from the Company and a subsidiary
undertaking and first and only chattel mortgage over the assets of one of the Group companies.
The present value of finance lease liabilities is as follows:
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years
Group
2010
£’000
8,561
35,410
19,279
63,250
Group
2009
Restated
£’000
9,542
33,188
20,084
62,814
Group
2008
Restated
£’000
8,084
28,344
21,658
58,086
The average lease term is 11 years. For the year ended 31 March 2010, the average effective borrowing rate
on leases was 6.75% (2009: 6.75%). All leases are on a fixed repayment basis and no arrangements have been
entered into for contingent rental payments.
25. Financial assets and liabilities
The following tables illustrate the categorisation and carrying value of financial assets and liabilities as at
31 March 2010:
Finance assets
Investments in associates and joint ventures
Trade and other receivables
Cash and cash equivalents
Loans and
receivables
£’000
–
1,689
13,697
15,386
Non
financial
assets
£’000
–
9,126
–
9,126
Assets not within the scope of
Total
£’000
IAS 39
£’000
414
17,199
–
17,613
414
28,014
13,697
42,125
88
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Financial liabilities
Trade and other payables
Bank overdraft
Borrowings – current portion
Current tax payable
Finance lease liability – current
Borrowings – non current
Finance lease liability – non current
Liability component of compound financial instruments
Derivatives – non current
Fair value
through profit
or loss
£’000
Other
financial
liabilities at
amortised
cost
£’000
Liabilities
not within
the scope of
IAS 39
£’000
–
–
–
–
–
–
–
–
5,821
5,821
1,816
1,210
5,141
–
–
12,578
–
8,200
–
28,945
18,302
–
–
858
8,561
–
54,689
–
–
82,410
Total
£’000
20,118
1,210
5,141
858
8,561
12,578
54,689
8,200
5,821
117,176
Fair value hierarchy
The financial liabilities measured at fair value in the Statement of Financial Position are grouped in the fair
value hierarchy as follows:
Derivatives
Level 1
£’000
–
Level 2
£’000
5,821
Level 3
£’000
–
Total
£’000
5,821
The derivatives entered into by the group are not traded in active markets. The fair value of these contracts is
estimated using a valuation technique that maximises the use of observable market inputs (Level 2).
Contractual discounted cash flows in respect of financial liabilities are as follows:
2010
Trade and other payables
Borrowings and finance lease liabilities
Current tax payable
Equity component of compound financial instruments
Derivatives
2009
Trade and other payables
Borrowings and finance lease liabilities
Equity component of compound financial instruments
Derivatives
Less than
one year
£’000
One to two
years
£’000
Two to five
years
£’000
More than
five years
£’000
20,118
14,912
858
–
–
–
13,782
–
–
84
35,888
13,866
–
32,645
–
15,000
–
47,645
–
20,840
–
–
5,737
26,577
Less than
one year
Restated
£’000
One to two
years
Restated
£’000
Two to five
years
Restated
£’000
More than
five years
Restated
£’000
26,881
18,344
–
–
45,225
–
26,353
–
208
26,561
–
27,499
15,000
–
42,499
–
26,323
–
6,917
33,240
Total
£’000
20,118
82,179
858
15,000
5,821
123,976
Total
Restated
£’000
26,881
98,519
15,000
7,125
147,525
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AssetCo plc Annual Report & Accounts 2010
89
Notes to the Consolidated
Financial Statements
2008
Trade and other payables
Borrowings and finance lease liabilities
Derivatives
Less than
one year
Restated
£’000
One to two
years
Restated
£’000
Two to five
years
Restated
£’000
More than
five years
Restated
£’000
27,872
26,825
–
54,697
–
9,169
–
9,169
–
32,944
–
32,944
–
27,857
2,190
30,047
Total
Restated
£’000
27,982
96,795
2,190
126,857
Derivatives outlined above relate to future interest rate swaps secured on asset finance and borrowings.
26. Deferred Tax
Deferred tax liabilities
Group
At 1 April 2008 (restated)
Charged/(credited) to the income statement
Arising on acquisition
At 31 March 2009 (restated)
Charged/(credited) to the income statement
Arising on acquisition
Deferred tax liability at 31 March 2010
Deferred tax assets
Group
At 1 April 2008 (restated)
Charged/(credited) to the income statement
Arising on acquisition
Arising on derivative financial instruments
At 31 March 2009 (restated)
Charged/(credited) to the income statement
Arising on acquisition
Arising on derivative financial instruments
Deferred tax asset at 31 March 2010
27. Trade and other payables
Trade payables
Social security and other taxes
Other creditors
Accruals and deferred income
Deferred consideration
90
AssetCo plc Annual Report & Accounts 2010
Accelerated tax
depreciation
£’000
5,475
2,084
–
7,559
1,735
–
9,294
Other
£’000
613
(377)
569
805
9
129
943
Accelerated tax
depreciation
£’000
Other
short–term
timing
differences
£’000
(952)
558
1
–
(393)
(186)
(3)
–
(582)
(1,256)
(270)
(83)
(1,275)
(2,884)
9
(446)
365
(2,956)
Group
2010
£’000
1,816
2,132
4
13,666
2,500
20,118
Tax
losses
£’000
(127)
(846)
–
(973)
695
–
(278)
Tax
losses
£’000
(835)
50
(1,100)
–
(1,885)
1,046
–
–
(839)
Total
£’000
5,961
861
569
7,391
2,439
129
9,959
Total
£’000
(3,043)
338
(1,182)
(1,275)
(5,162)
869
(449)
365
(4,377)
Group
2009
Restated
£’000
8,550
4,236
451
10,086
3,558
26,881
Group
2008
Restated
£’000
12,792
2,892
2,508
4,507
5,173
27,872
Notes to the Consolidated
Financial Statements
28. Investments
Details of Group companies can be found in Note 29 to the financial statements.
Discontinued operations
Discontinued operations include activities relating to the UV Modular business which went into administration in
January 2010, the Auto Electrical Services business which was sold in September 2009 and the Supply 999 and
Treka businesses which are held for resale. Details of performance in the year are outlined below:
Revenue
Expenses
Net (loss)/profit after tax
2010
£’000
28,331
(33,627)
(5,296)
2009
Restated
£’000
49,723
(49,440)
283
The effect of discontinued operations on segment results is disclosed in Note 5 to the financial statements. The
taxation effect of discontinued operations has been a credit of £680,000 (2009: charge of £79,000).
The carrying amount of the net assets of AES Limited on the date of disposal (30 September 2009) were as
follows:
Non current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total assets
Trade and other payables
Total liabilities
Net assets
£’000
46
27
875
279
1,227
1,095
1,095
132
The carrying amount of the net assets of UV Modular Limited (15 January 2010) on the date at which the Group
lost control were as follows:
Non current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total assets
Trade and other payables
Total liabilities
Net liabilities
£’000
131
135
2,494
4,305
7,065
9,580
9,580
(2,515)
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AssetCo plc Annual Report & Accounts 2010
91
Notes to the Consolidated
Financial Statements
The net cash flows attributable to assets held for sale and discontinued operations are as follows:
Net cash (outflow)/inflow
Earnings per share in relation to discontinued operations are as follows:
Basic
Diluted
2010
£’000
(9,556)
2010
(6.2)p
(6.2)p
2009
Restated
£’000
575
2009
Restated
0.4p
0.4p
Investment in associate
On 26 November 2007, the Group acquired 25% of the issued share capital of Miquest Limited, a company
which provides integrated solutions for asset management, for consideration of £414,000. Miquest Limited was
incorporated in England and Wales.
Group
At 31 March 2008, 2009 and 2010
Investment in associates includes goodwill of £472,000.
Investment in
Associate
£’000
414
The Group’s share of the results of its associate, which is unlisted, and its share of the assets, including
goodwill, and liabilities, is as follows:
Group
Miquest Limited
Assets
£’000
89
Liabilities
£’000
219
Revenue
£’000
461
Loss
£’000
(178)
Interest
%
25
No result has been recognised in the consolidated financial statements on the grounds of materiality.
92
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Interests in joint ventures
The Group has a 50% interest a joint venture, ADATT Limited, which undertakes vehicle conversions. The
following amounts represent the assets and liabilities, and sales and results of the joint venture. Due to their
immateriality to the financial statements, no amounts are included in the balance sheet and income statement.
Assets
Current assets
Liabilities
Current liabilities
Net assets
Income
Expenses
Profit/(loss) before tax
Group
2010
£’000
Group
2009
Restated
£’000
830
830
(827)
3
1,300
(1,300)
–
(827)
3
2,634
(2,636)
(2)
There are no contingent liabilities relating to the Group’s interests in the joint ventures, and no contingent
liabilities of the ventures themselves.
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AssetCo plc Annual Report & Accounts 2010
93
Notes to the Consolidated
Financial Statements
29. Group undertakings
The accounting parent company, AssetCo Fire and Rescue Limited, has a controlling interest through shares,
directly or indirectly, in the following group undertakings:
Subsidiary
Country of incorporation
Group
Company Shares held
Nature of business
Percentage of shares
held
Integrated Support Services
AssetCo Emergency Limited
AssetCo Engineering Limited
AssetCo Lincoln Limited
AssetCo London Limited
England & Wales
England & Wales
N. Ireland
England & Wales
AssetCo Managed Services (ROI) Limited
Republic of Ireland
MFlow Limited
England & Wales
AssetCo Bermuda Limited
Bermuda
AssetCo Resource Limited
RIG Systems Limited
Nene Whitewater Centre
Simentra Limited
Specialist equipment
England & Wales
England & Wales
England & Wales
N. Ireland
AS Fire and Rescue Equipment Limited
England & Wales
AS Security BV
The Netherlands
AssetCo Emergency Equipment Limited
England & Wales
Graphic Traffic Limited
N. Ireland
AssetCo Specialist Equipment Limited
England & Wales
Leftfield Group Limited
Todd Research Limited
Supply 999 Limited
Vehicle assembly
England & Wales
England & Wales
England & Wales
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
87%
100%
100%
100%
100%
100%
100% Ordinary
Holding company
– Ordinary
Management of emergency equipment
– Ordinary
Emergency managed services
– Ordinary
Emergency managed services
100% Ordinary
Business support services
– Ordinary
Electrical and communications systems
100% Ordinary
Consultancy and business development
100% Ordinary
Human resources consultancy
– Ordinary
Specialist training provider
– Ordinary
Specialist training provider
100% Ordinary
Security consultancy
– Ordinary
Manufacture and distribution of safety equipment
– Ordinary
Sales
87% Ordinary
Holding company
– Ordinary
Provider of livery
– Ordinary
Holding company
– Ordinary
Holding company
– Ordinary
Manufacture and distribution of security equipment
100% Ordinary
Distribution of safety and cutting equipment
Treka Bus Limited (formerly Blue Amber Red
Limited)
England & Wales
100%
– Ordinary
Manufacture of vehicles
Papworth Specialist Vehicles Limited
England & Wales
AssetCo Specialist Vehicles Limited
England & Wales
100%
100%
– Ordinary
Assembly of emergency vehicles
– Ordinary
Holding company
Non emergency
AssetCo Municipal Limited
England & Wales
100%
100% Ordinary
Fleet and management services
Dormant companies
Asfare No.1 Limited
AssetCo Contracts Limited
AssetCo Servicecare Limited
AssetCo Solutions Limited
Fire Guns Limited
Sacol Group 1990 Limited
AS America Inc
AssetCo SVO Limited
England & Wales
N. Ireland
N. Ireland
N. Ireland
England & Wales
England & Wales
USA
England & Wales
AssetCo Managed Services Limited
England & Wales
100%
100%
100%
100%
100%
100%
100%
100%
100%
– Ordinary
Dormant
– Ordinary
Dormant
– Ordinary
Dormant
– Ordinary
Dormant
– Ordinary
Dormant
– Ordinary
Dormant
– Common
Dormant
– Ordinary
Dormant
100% Ordinary
Dormant
94
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
Details of the Group’s investments in associates and interests in joint ventures are given in note 28 to these
financial statements.
The percentage of shares held equates to voting rights for all of the subsidiaries listed above.
30. Reconciliation of profit before tax to net cash generated from operations
Profit for the year before taxation
Adjustments for:
– Depreciation
– Amortisation
– Profit on disposal of property, plant and equipment
– Share-based payments
– Fair value gains on financial instruments recognized in profit and loss
– Movement in restructuring provision
– Finance income
– Finance costs
– Exchange differences
Changes in working capital (excluding the effects of acquisitions)
– Inventories
– Trade and other receivables
– Trade and other payables
Cash generated from operations
2010
£’000
12,098
7,041
440
–
100
(1,304)
–
(416)
7,043
246
(224)
(6,814)
6,084
24,294
2009
Restated
£’000
1,251
6,546
223
(292)
140
4,555
(1,549)
(717)
6,869
–
(697)
(2,625)
(972)
12,732
31. Business combinations
On 31 March 2010, the Group completed the acquisition of 100% of the share capital of Graphic Traffic Limited
for consideration of £1,000 creating goodwill on acquisition of £956,000. This business has been purchased
with a view to resale hence the goodwill is included within assets held for sale.
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables
Net liabilities
Goodwill
Total consideration
Carrying
amount before
combination
£’000
Fair value
adjustments
£’000
43
14
507
(1,519)
(955)
–
–
–
–
–
Fair value
£’000
43
14
507
(1,519)
(955)
956
1
No profit or loss has been recognised in the Group income statement for the year in relation to Graphic Traffic.
32. Events after the balance sheet date
On 9 June 2010, the Board recommended a final dividend for the year to 31 March 2010 of 1.5p per share (2009:
1.25p per share). This dividend has not been included as a liability at 31 March 2010.
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AssetCo plc Annual Report & Accounts 2010
95
Notes to the Consolidated
Financial Statements
33. Related party transactions
Related parties comprise the Company’s shareholders, subsidiaries, associated companies, joint ventures, other
entities over which the shareholders of the Group have the ability to control or exercise significant influence
over their financial and operating decisions and key management personnel. Transactions between the Company
and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.
During the year, the Group entered into the following significant transactions with related parties at prices and
on terms agreed between the related parties:
Salary
2010
£’000
300
250
550
Benefits
in kind
2010
£’000
Total
emoluments
2010
£’000
–
–
–
300
250
550
Salary
2009
£’000
250
125
375
Remuneration of the directors
John Shannon
Frank Flynn
Total
Non-executive directors’ remuneration
Tim Wightman
Adrian Bradshaw
Peter Manning
Andrew Freemantle
Total
Key management compensation (excluding non-executive directors)
Group
Salaries and other short-term employee benefits
Benefits in
kind
2009
£’000
Total
emoluments
2009
£’000
–
–
–
2010
£’000
55
35
35
18
143
2010
£’000
550
250
125
375
2009
£’000
55
35
18
–
108
2009
Restated
£’000
375
Directors’ share options
Name
Tim Wightman
Adrian Bradshaw (1)
Parties
Director
Director
Exercise
price
100p
100p
No. of
shares
105,000
105,000
Date of grant
Expiry date
5 December 2003
5 December 2003
4 December 2013
4 December 2013
(1)
The options set out against Adrian Bradshaw were granted to Bradmount Investments Limited acting as nominee for Adrian Bradshaw
and Peter Mountford in equal measure. Both Adrian Bradshaw and Peter Mountford are directors and shareholders of Bradmount
Investments limited.
Amounts due to related parties
Group
Directors’ loan accounts
2010
£’000
150
2009
Restated
£’000
130
96
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
In May 2009, Jaras Property Developments Limited, a company from which the Group rents a property was
purchased by John Shannon, the value of these rentals amounted to £166,666 in the year. At 31 March 2010, the
Group had an asset balance with this company totalling £1.5m (2009: £nil).
The vendor of Graphic Traffic Limited (see note 31) was John Shannon. Prior to acquisition, the Group made
purchases of £235,013 (2009: £231,302) from this company.
34. Commitments
Capital commitments
There were no capital commitments at 31 March 2010 or 31 March 2009.
Operating lease commitments
The Group leases various assets under non-cancellable operating lease agreements. The leases have varying
terms and renewal rights.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Within one year
After five years
2010
£’000
–
746
746
2009
Restated
£’000
141
1,457
1,598
35. Operating/finance lease receivables
The Group’s future aggregate minimum lease receipts under non-cancellable operating leases are as follows:
Within one year
Within two to five years
After five years
2010
£’000
24,400
97,600
158,000
280,000
2009
Restated
£’000
24,400
97,600
182,400
304,400
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AssetCo plc Annual Report & Accounts 2010
97
Notes to the Consolidated
Financial Statements
The Group’s net investment in operating lease receivables is as follows:
2010
£’000
Gross
investment in
finance lease
receivables
2010
£’000
Future Finance
Income
2010
£’000
Present value
of minimum
lease payments
receivable
2009
Restated
£’000
Gross
investment in
finance lease
receivables
2009
Restated
£’000
Future Finance
Income
2009
Restated
£’000
Present value
of minimum
lease payments
receivable
863
5,912
28,423
35,198
(394)
(2,753)
(14,852)
(17,999)
469
3,159
13,571
17,199
163
2,491
7,327
9,981
(81)
(858)
(4,051)
(4,990)
82
1,633
3,276
4,991
Less than one year
Later than one year and not later than
five years
Later than five years
36. Capital management policies and procedures
The Group’s capital management objectives are to ensure the Group’s ability to continue as a going concern and
to provide an adequate return to shareholders.
The Group monitors capital on the basis of the carrying amount of the equity less cash and cash equivalents as
presented on the face of the balance sheet.
The movement in the capital to overall financial ratio is shown below.
The Group manages the capital structure and makes adjustments in light of changes in economic conditions and
the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group
may adjust the level of dividends paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
Equity
Less: cash and cash equivalents
Capital
Equity
Borrowings
Overall financing
Capital to overall financing
2010
£’000
60,818
(13,697)
47,121
2010
£’000
60,818
82,179
142,997
33%
2009
Restated
£’000
51,835
(22,498)
29,337
2009
Restated
£’000
51,835
98,519
150,354
20%
2008
Restated
£’000
42,123
(12,896)
29,227
2008
Restated
£’000
42,123
96,795
138,918
21%
37. Parent company
The financial statements of the legal parent company, AssetCo plc, can be found in a separate section of the
Annual Report.
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own
profit and loss account in the parent company financial statements. The profit for the year of the Company for
the year was £3.914m (2009: loss £0.084m).
98
AssetCo plc Annual Report & Accounts 2010
Notes to the Consolidated
Financial Statements
38. Contingent Liabilities
During the year the Group entered into a performance bond relating to a recent contractual win which dictates
a potential liability of 5% of the contract value upon failure to fulfill the terms of the contract. This liability
would equate to approximately £4m.
The Group has provided an “Advanced Payment Guarantee” of approximately £4m in connection with one of the
contracts that was awarded during the year.
Certain contracts awarded during the year can be terminated with three months’ notice.
39. Prior year adjustments
There are two prior period adjustments.
The first is in relation to an overstatement of a derivative financial instrument debit balance. This resulted in an
over statement of net assets of £3.154m and a gain of £1.577m being recognised in the consolidated statement
of income and expense. This has been restated as a loss and the restated amount reflects this movement.
The second adjustment was to adjust the designation of the hedge arrangement as an ineffective hedge. This
resulted in gains and losses on the movement in fair value of the financial instrument being transferred from
the statement of changes in equity to the income statement.
The related impact on the consolidated income statement is set out below:
Finance income
(Credit)/charge in relation to movement in derivative financial instrument
(1,304)
4,555
2010
£’000
2009
£’000
The impact on retained earnings and the hedge reserve can be seen in the consolidated statement of changes in
equity.
In compliance with IAS 39 our 2009 and 2008 balance sheets have been restated for the movement on
our derivative financial instruments which, whilst commercially effective, have been deemed ineffective
from inception from a financial reporting perspective. The current year credit and prior year charge to the
consolidated income statement are non cash items.
40. Ultimate controlling party
The Company is listed on the Alternative Investment Market of the London Stock Exchange. The Company is not
under the control of any one individual. Significant holdings in the shares of the Company are disclosed in the
Report of the Directors.
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AssetCo plc Annual Report & Accounts 2010
99
Report of the Independent Auditor
on the Company Financial Statements
Independent auditor's report to the members of AssetCo plc
We have audited the parent company financial statements of AssetCo plc for the year ended 31 March 2010
which comprise the parent company balance sheet and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an 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.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 22 , the directors are
responsible for the preparation of the parent company financial statements and for being satisfied that they
give a true and fair view. Our responsibility is to audit the parent company financial statements in accordance
with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB's website at
www.frc.org.uk/apb/scope/UKNP.
Opinion on financial statements
In our opinion the parent company financial statements:
■ give a true and fair view of the state of the Company's affairs as at 31 March 2010;
■
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
and
■ have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the financial
statements are prepared is consistent with the parent company financial statements.
100
AssetCo plc Annual Report & Accounts 2010
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
■ adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
■
the parent company financial statements are not in agreement with the accounting records and returns; or
■
certain disclosures of directors’ remuneration specified by law are not made; or
■ we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the parent company financial statements of AssetCo plc for the year ended
31 March 2010.
Robert Napper
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Slough
12 July 2010
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AssetCo plc Annual Report & Accounts 2010
101
Company Balance Sheet
Fixed assets
Investment in subsidiaries
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Net assets
Capital and reserves
Called-up share capital
Share premium account
Merger reserve
Share-based payment reserve
Profit and loss account
Shareholders’ funds
Notes
31.3.10
£’000
31.3.09
£’000
5
6
7
8
8
9
10
11
13
98,720
98,720
27,795
21
27,816
(2,494)
25,322
124,042
124,042
22,678
29,288
68,293
680
3,103
8,920
7,500
16,420
(1,478)
14,942
113,662
113,662
18,345
26,115
68,293
580
329
124,042
113,662
These financial statements were approved by the Board of directors and authorised for issue on 12 July 2010 and
are signed on their behalf by:
R.F.Flynn
Director
Company Registration number: 04966347
102
AssetCo plc Annual Report & Accounts 2010
Notes to the Company
Financial Statements
1. Legal status and activities
AssetCo plc (“the Company”) is principally a holding company for other companies within the Group.
The separate financial statements of the Company (“parent company financial statements”) are presented as
required by the Companies Act 2006.
For greater clarity, the parent company financial statements have been presented in round thousands (£’000).
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of the parent company financial statements are set
out below.
2.1 Basis of preparation
The parent company financial statements have been prepared in accordance with United Kingdom accounting
standards under the historical cost convention. As permitted by Section 408 of the Companies Act 2006, the
Company has not presented its own profit and loss account.
Under Financial Reporting Standard 1, the Company is exempt from the requirement to prepare a cash flow
statement on the grounds that its consolidated financial statements, which include the Company, are publicly
available.
Note 23 (“Share capital”) of the consolidated financial statements of AssetCo plc forms part of these financial
statements.
2.2 Investments
Investments in subsidiary undertakings are included in the balance sheet at cost less any provision for
permanent diminution in value.
2.3 Share-based payments
The Company has applied the requirements of FRS 20, “Share-based Payments”. The Company issues
equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured
at fair value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period,
based on the estimate of shares that will eventually vest.
2.4 Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. A financial liability is a contractual obligation to deliver cash or another financial
asset to another entity. An equity instrument is any contract that evidences a residual interest in the assets of
the Company after deducting all of its liabilities.
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AssetCo plc Annual Report & Accounts 2010
103
Notes to the Company
Financial Statements
2.5 Bank borrowings
Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted
for on an accruals basis in profit or loss using the effective interest method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise.
3. Auditor’s remuneration
Fees payable to the Company’s auditor for the audit of the Company’s financial statements
4. Particulars of employees
Number of directors
2010
£’000
73
2010
£’000
5
2009
£’000
73
2009
£’000
5
The executive directors received all of their remuneration, as disclosed in the Report of the Directors of the
consolidated financial statements, from AssetCo Group Limited. However, it is not practicable to allocate such
costs between their services as executives of AssetCo Group Limited and their services as directors of AssetCo
plc and other Group companies. The remuneration of the non-executive directors, which is wholly attributable
to the Company, is disclosed in the Report of the Directors of the consolidated financial statements.
5.
Investments
Cost
At 1 April 2009 and 31 March 2010
Shares in
group
undertakings
£’000
98,720
Disposal
During the year, the Company disposed of its interest in Auto Electrical Services (Manchester) Limited. In
the opinion of the directors, the value of this investment has been retained through the Group’s continuing
ownership of M~Flow Limited. An adjustment to investments has therefore not been made.
Impairment
The carrying value of investments is reviewed annually by the directors for potential impairment. The carrying
value of the investments is, in the opinion of the directors, fairly stated at 31 March 2010. Sensitivity analyses
have been carried out in relation to future income streams and cash flows using a discount rate of 13% which
have allowed the directors to conclude there is no potential impairment.
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AssetCo plc Annual Report & Accounts 2010
Subsidiary undertakings
The Company has a controlling interest directly through shares in the following undertakings:
Subsidiary
incorporation
shares held
Shares held Nature of business
Country of
Percentage of
AS Fire and Rescue Equipment Limited England & Wales 100%
AssetCo Fire and Rescue (formerly
N. Ireland
100%
Ordinary
Ordinary
Manufacture and distribution of safety equipment
Holding company
ÅssetCo Group Limited)
Todd Research Limited
England & Wales 100%
Ordinary
Manufacture and distribution of security
M~Flow Limited
England & Wales 100%
Ordinary
equipment
Electrical and communication systems
None of the above investments are listed on a recognised Stock Exchange.
6. Debtors
Amounts owed by group undertakings
Prepayments and accrued income
7. Creditors: amounts falling due within one year
Other taxation and social security
Accruals and deferred income
Bank loans and overdrafts
8. Share capital
At 1 April 2009
Proceeds from ordinary shares issued
At 31 March 2010
Company
2010
£’000
27,795
–
27,795
Company
2010
£’000
1,538
160
796
2,494
Share
Premium
£’000
26,115
3,173
29,288
Company
2009
£’000
8,872
48
8,920
Company
2009
£’000
1,471
7
–
1,478
Total
£’000
44,460
7,506
51,966
Number of
Shares
Share capital
£’000
73,379,406
17,333,333
90,712,739
18,345
4,333
22,678
The total authorised number of ordinary shares is 95,000,000 (2009: 95,000,000) with a nominal value of 25
pence per share (2009: 25 pence per share). All issued shares are fully paid.
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Notes to the Company
Financial statements
9. Merger reserve
At 1 April 2009 and 31 March 2010
10. Share-based payment reserve
At 1 April 2009
Share-based payments
At 31 March 2010
11. Profit and loss account
At 1 April 2009
Profit for the financial year
Dividends paid in year
At 31 March 2010
Total
£’000
68,293
Total
£’000
580
100
680
Total
£’000
329
3,914
(1,140)
3,103
The Company has taken advantage of Section 230 of the Companies Act 1985 and has not included its own
profit and loss account in the parent company financial statements. The profit for the year of the Company was
£2.214m (2009: loss £0.084m).
12. Share-based payments
Details of the share options granted over the Company’s shares by Group companies to employees, and
that remain outstanding at the balance sheet date, are set out in Note 23 to the AssetCo plc consolidated
financial statements. The amounts recognised as an expense in relation to equity-settled share-based payment
transactions during the year was £100,000 (2009: £140,000).
13. Reconciliation of movement in shareholders’ funds
At 1 April
Profit/(loss) for the financial year
New share capital subscribed
Share-based payments
Dividends paid
At 31 March
2010
£’000
113,662
3,914
7,506
100
(1,140)
2009
£’000
113,023
(84)
1,303
140
(720)
124,042
113,662
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AssetCo plc Annual Report & Accounts 2010
14. Related party transactions
Related parties comprise the Company’s shareholders, subsidiaries and key management personnel.
During the year, the Company entered into the following significant transactions with related parties at prices
and on terms agreed between the related parties:
Amounts due from related parties
Company
Group undertakings
2010
£’000
2009
£’000
27,795
8,872
15. Post-balance sheet events
On 25 June 2010, the board recommended a final dividend for the year to 31 March 2010 of 1.5p per share (2009
1.25p per share). This dividend has not been included as a liability at 31 March 2010.
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Notice of Annual General Meeting
This year’s Annual General Meeting will be held at the offices of Arden Partners plc at 125 Old Broad Street,
London, EC2N 1AR at 11.00 a.m. on 18 August 2010. You will be asked to consider and pass the resolutions
below. Resolutions 9, 10 and 11 will be proposed as special resolutions. All other resolutions will be proposed as
ordinary resolutions.
Ordinary Resolutions
Resolution 1:
THAT the report of the directors and the audited accounts for the year ended 31 March 2010 laid before the
meeting, be received.
Resolution 2:
THAT the report on directors’ remuneration as set out in the annual report for the year ended 31 March 2010
laid before the meeting, be received.
Resolution 3:
THAT Timothy Redmayne Wightman, a director retiring by rotation pursuant to Article 66, be re-elected a
director of the Company.
Resolution 4:
THAT Andrew Wayne Freemantle, who was appointed as a director of the Company by the board since the date
of the last annual general meeting of the Company, be elected a director of the Company.
Resolution 5:
THAT Grant Thornton UK LLP be re-appointed auditors of the Company to hold office until the conclusion of
the next general meeting at which the accounts are to be laid before the Company and their remuneration be
determined by the directors.
Resolution 6:
THAT the directors be and they are hereby generally and unconditionally authorised in accordance with section
551 of the Companies Act 2006 (the “Act”) in substitution for all existing authorities:
(i) to exercise all powers of the Company to allot shares and to make offers or agreements to allot shares
in the Company or grant rights to subscribe for or to convert any security into shares in the Company
(together the “Relevant Securities”) up to an aggregate nominal amount of £7,559,395; and
(ii) to exercise all the powers of the Company to allot equity securities (within the meaning of section 560
of the Act) up to an additional aggregate nominal amount of £7,559,395 provided that this authority may
only be used in connection with a rights issue in favour of holders of ordinary shares and other persons
entitled to participate therein where the equity securities respectively attributable to the interests of all
those persons at such record dates as the directors may determine are proportionate (as nearly as may
be) to the respective numbers of equity securities held or deemed to be held by them or are otherwise
allotted in accordance with the rights attaching to such equity securities subject to such exclusions or other
arrangements as the directors may consider necessary or expedient to deal with fractional entitlements or
legal difficulties under the laws of any territory or the requirements of a regulatory body or stock exchange
or by virtue of shares being represented by depositary receipts or any other matter whatsoever;
provided that the authorities in 6(i) and 6(ii) shall expire at the conclusion of the next annual general meeting
of the Company after the passing of this resolution or if earlier on the date which is 15 months after the date
of the annual general meeting, except that the Company may before such expiry make an offer or agreement
which would or might require Relevant Securities or equity securities as the case may be to be allotted after
such expiry and the directors may allot Relevant Securities or equity securities in pursuance of any such offer or
agreement as if the authority in question had not expired.
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AssetCo plc Annual Report & Accounts 2010
Resolution 7:
THAT a final dividend for the year ended 31 March 2010 of 1.5 pence per share, on the ordinary shares of 25
pence each of the Company, be declared payable on 25 October 2010 to shareholders registered at the close of
business on 24 September 2010.
Resolution 8:
THAT the rules of the AssetCo Performance Share Plan 2010 (the “Plan”), referred to in the Chairman of the
Board’s letter to shareholders dated 19 July 2010 and produced in draft to this meeting and, for the purposes of
identification, initialled by the Chairman, and a limit to share usage under the Plan of no more than 2.5m shares
up to the 2011 AGM, be approved and the Directors be authorised to:
(a) make such modifications to the Plan as they may consider appropriate to take account of the requirements
of best practice and for the implementation of the Plan and to adopt the Plan as so modified and to do all
such other acts and things as they may consider appropriate to implement the Plan; and
(b) establish further plans based on the Plan but modified to take account of local tax, exchange control or
securities laws in overseas territories, provided that any shares made available under such further plans are
treated as counting against the limits on individual or overall participation in the Plan.
Special Resolutions
Resolution 9:
THAT the directors be and are empowered, in accordance with section 570 of the Act, to allot equity securities
(as defined in section 560(1) of the Act) for cash pursuant to the authority conferred by resolution 6 or by way
of a sale of treasury shares as if section 561(1) of the Act did not apply to any such allotment, provided that
this power shall be limited to:
(i) the allotment of equity securities in connection with a rights issue or other pro rata offer in favour of
holders of ordinary shares and other persons entitled to participate therein where the equity securities
respectively attributable to the interests of all those persons at such record dates as the directors may
determine are proportionate (as nearly as may be) to the respective numbers of equity securities held
or deemed to be held by them or are otherwise allotted in accordance with the rights attaching to such
equity securities subject in each case to such exclusions or other arrangements as the directors may
consider necessary or expedient to deal with fractional entitlements or legal difficulties under the laws
of any territory or the requirements of a regulatory body or stock exchange or by virtue of shares being
represented by depositary receipts or any other matter whatsoever; and
(ii) the allotment (otherwise than pursuant to paragraph 8(i) above) of equity securities up to an aggregate
nominal amount of £2,267,818.50.
and shall expire upon the expiry of the general authority conferred by resolution 6 above, except that the
Company may make an offer or agreement before this power expires which would or might require equity
securities to be allotted and/or shares held by the Company in treasury to be sold or transferred after such
expiry and the directors may allot equity securities and/or sell or transfer shares held by the Company in
treasury in pursuance of such offer or agreement as if the power conferred by this resolution had not expired.
Resolution 10:
THAT the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of
the Act to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares in the
capital of the Company, provided that:
(i) the number of ordinary shares hereby authorised to be purchased shall not exceed 10% of the Company’s
issued ordinary share capital at the date of this resolution;
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AssetCo plc Annual Report & Accounts 2010
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Notice of Annual General Meeting
(ii) the minimum price, exclusive of any expenses, which may be paid for any ordinary share shall not be less
than its nominal value;
(iii) the maximum price, exclusive of any expenses, which may be paid for any such ordinary share is an amount
equal to 105% of the average of the middle market quotations for an ordinary share taken from the London
Stock Exchange Daily Official List for the 5 business days immediately preceding the date on which such
share is contracted to be purchased;
(iv) this authority shall expire at the end of the next annual general meeting of the Company; and
(v) the Company may make a contract for the purchase of ordinary shares under this authority before the
expiry of this authority which would or might be executed wholly or partly after the expiry of such
authority, and may make purchases of ordinary shares in pursuance of such a contracts as if such authority
had not expired.
Resolution 11:
THAT:
(i) the existing articles of association of the Company are amended by deleting all of the provisions of the
Company’s memorandum of association which by virtue of section 28 of the Act, are treated as provisions
of the Company’s existing articles of association; and
(ii) the new articles of association produced to the meeting and initialled by the Chairman of the meeting for
identification purposes be adopted as the articles of association of the Company in substitution for, and to
the exclusion of, the existing articles of association.
19 July 2010
By order of the Board
Michael Lavender
Company Secretary
Registered Office:
800 Field End Road
South Ruislip
Middlesex
HA4 0QH
Registered in England and Wales No. 04966347
Notes
1.
Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and
vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the
Annual General Meeting provided that each proxy is appointed to exercise the rights attached to a different
share or shares held by that shareholder. A proxy need not be a shareholder of the Company. A proxy form
which may be used to make such appointment and give proxy instructions accompanies this notice. Please
do not appoint the Chairman as proxy if it is your intention that your proxy is to speak at the Annual
General Meeting; the Chairman will not speak in his capacity as proxy at the Annual General Meeting. If you
110
AssetCo plc Annual Report & Accounts 2010
Notice of Annual General Meeting
2.
3.
4.
5.
6.
7.
8.
9.
do not have a proxy form and believe that you should have one, or if you require additional forms, please
contact Computershare Investor Services on 0870 889 3198.
To be valid any proxy form or other instrument appointing a proxy must be received by post or (during
normal business hours only) by hand at The Pavillions, Bridgewater Rd, Bristol BS99 6ZY and in any event no
later than 11.00 a.m. on 16 August 2010. Proxy appointments may also be sent by fax to 0870 703 6116.
The return of a completed proxy form will not prevent a shareholder attending the Annual General Meeting
and voting in person if he/she wishes to do so. To change your proxy instructions, you may return a new
proxy appointment using the methods set out above. Where two or more valid separate appointments of
proxy are received in respect of the same meeting, the one which is last sent shall be treated as replacing
and revoking the other or others.
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies
Act 2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her
and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone
else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to
give instructions to the shareholder as to the exercise of voting rights.
The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 to 3
above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised
by shareholders of the Company.
To be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination
by the Company of the votes they may cast), shareholders must be registered in the register of members of
the Company at 11.00 a.m. on 16 August 2010 (if the AGM is adjourned, 2 working days before the time fixed
for the adjourned AGM) and shall be entitled to attend and vote at the AGM in respect of the number of
shares registered in their name at that time. Changes to the register of members after the relevant deadline
shall be disregarded in determining the rights of any person to attend and vote at the meeting.
As at 16 July 2010 (being the last business day prior to the publication of this Notice) the Company’s issued
share capital consists of 90,712,740 ordinary shares, carrying one vote each. Therefore, the total voting
rights in the Company as at 16 July 2010 are 90,712,740.
We apologise but the appointment of proxies or the giving of any instruction by the CREST system will not
be accepted for the purposes of this Annual General Meeting.
In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place
at the meeting so that (i) if a corporate shareholder has appointed the Chairman of the meeting as its
corporate representative to vote on a poll in accordance with the directions of all of the other corporate
representatives for that shareholder at the meeting, then on a poll those corporate representatives
will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate
representative in accordance with those directions; and (ii) if more than one corporate representative for
the same corporate shareholder attends the meeting but the corporate shareholder has not appointed
the Chairman of the meeting as its corporate representative, a designated corporate representative
will be nominated, from those corporate representatives who attend, who will vote on a poll and the
other corporate representatives will give voting directions to that designated corporate representative.
Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and
Administrators on proxies and corporate representatives ( HYPERLINK “http://www.icsa.org.uk” www.icsa.
org.uk) for further details of this procedure. The guidance includes a sample form of appointment letter if
the Chairman is being appointed as described in (i) above.
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111
Financial Calendar
AGM 18 August 2010
Dividend Record Date 24 September 2010
Dividend Payment Date 25 October 2010
FY 11 Interim Results December 2010
With thanks to the London Fire Brigade for use of the photographs.
112
AssetCo plc Annual Report & Accounts 2010
Company Information
Company registration number
04966347
Registered office
Directors
Secretary
Bankers
Solicitors
Auditor
Nominated adviser, financial adviser
and corporate Broker
Financial public relations
Registrar
800 Field End Road
South Ruislip
Middlesex
HA4 0QH
Tim Wightman (Chairman)
John Shannon
Frank Flynn
Adrian Bradshaw
Peter Manning
Andrew Freemantle (appointed 1 January 2010)
Michael Lavender
Bank of Scotland (Ireland) Limited
Donegall Square North
Belfast
BT1 5GB
Nabarro LLP
Lacon House
84 Theobald’s Road
London
WC1X 8RW
Grant Thornton UK LLP
Chartered Accountants
Statutory Auditor
Churchill House
Chalvey Road East
Slough
Berkshire
SL1 2LS
125 Old Broad Street
Arden Parnters plc
London EC2N 1AR
EC2N 1AR
Pelham Public Relations
5th Floor
Holborn Gate
London
EC4R 9AB
Computershare Investor Services PLC
PO Box 1075
The Pavilions
Bridgwater Road
Bristol
BS99 3FA
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Website
www.assetco.com
AssetCo plc Annual Report & Accounts 2010
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AssetCo plc
Registered office
800 Field End Road, South Ruislip, Middlesex HA4 0QH
Tel: +44 (0)20 8515 3999 | www.assetco.com