Directors' report
Directors’ report
The Directors present their report on the Group together with the audited financial statements for the year ended 31 March 2008.
Principal activities
AEA is one of the world’s leading consultancies in energy and climate change. The Group employs a number of the world’s experts in air quality, energy policy, carbon trading and management, resource minimisation and waste management, transport and knowledge management. Its major customers are UK Government, Scottish Government, the London Development Agency, and the private sector in the UK and EU.
Review of the business and future development
The performance of the Group is reviewed in the Business Review.
Results and dividends
This year’s results are set out in the Consolidated income statement. No interim dividend was paid (2007: £nil) and the Directors recommend that there is no final dividend for the year (2007: £nil).
Post–balance sheet events
There were no post balance sheet events.
Directors’ interests and the appointment of Directors
The Directors’ service agreements or appointment letters and their interests in the Company’s shares are described in the Report on Directors’ remuneration. Details concerning the re-election of Directors’ and the appointment of new Directors’ is as described in the section on Corporate governance.
The Company maintains directors’ and officers’ liability insurance for its Director’s and officers.
Share capital
The Company’s authorised and issued share capital as at 31 March 2008, together with details of shares issued during the year, is set out in note 21 to the financial statements. Each ordinary share of the Company carries one vote.
Authority to purchase shares
The Company was authorised at the 2007 AGM to purchase its own shares, within certain limits and as permitted by the Articles of Association. A renewal of this authority will be proposed at the 2008 EGM. Shares repurchased may be cancelled or retained as treasury shares to accommodate requirements for shares under the Group’s share incentive schemes. No shares were purchased under this authority during 2008.
Substantial shareholders
As at 11 June 2008 the Company has been notified under section 793 of the Companies Act 2006 of the following notifiable interests in its shares:
| Schroder Investment Management Limited |
20.59% |
| M&G Investment Management Limited (UK) |
16.71% |
| Artemis Investment Management |
14.45% |
| Invesco Perpetual (UK) |
7.56% |
| JO Hambro Capital Management |
7.24% |
| GAM |
5.93% |
| Cazenove Capital Management |
4.87% |
| Legal and General Investment Management |
4.58% |
Acquisitions, joint ventures and branches
There were no acquisitions or incorporated joint ventures entered into during the year. The Company retains five registered overseas branches.
Board Committees
The role and work of the Board’s Committees are reported in the report on Corporate Governance or, in the case of the Remuneration Committee, in the Report on Directors’ remuneration.
Charitable donations
Details of charitable donations are given in the section on Corporate Responsibilities.
Research and development
Research and development (R&D) expenditure for the Group was £0.1 million, all of which was capitalised (2007: £0.2 million, of which £0.1 milllion was capitalised). R&D investment is controlled as part of business plans within the overall strategy for the Group set by the Board. It is directed at the development of new products and ventures in which the Group has a distinctive technological lead as well as longer–term products and services developments to underpin future organic growth and competitiveness.
During the year R&D activity was focused on upgrading a number of software tools and databases that underpin AEA’s consultancy in energy and environment, improving flexibility and functionality and developing new tools in this area to increase the services offered. In addition the Group continued to develop products to enable provision of online versions of existing software tools. Digitalisation of its intellectual capital will continue to be a growing investment priority.
Employees
Details of the Group’s employment policies are given in the section on Corporate Responsibilities.
Payment policy
AEA is a registered supporter of the CBI’s Prompt Payment Code. Its policy is to agree terms of trading that are appropriate for suppliers’ markets and to abide by such terms where suppliers’ obligations have been met. The average creditor payment period at 31 March 2008 was 25 days (2007: 39 days).
Risk management
Refer to the scetion on Risks and uncertainties for discussion of the Group's management of risk.
Auditors and disclosure of information to auditors
PwC have indicated their willingness to continue in office and a resolution that they will be re-appointed will be proposed at the Annual General Meeting.
The Board has agreed as a policy that work other than statutory reporting work and directly related services will not be placed with the external audit firm unless it gives prior agreement after satisfying itself that to do so is in the best interest of the Company.
Such other work placed with PricewaterhouseCoopers LLP (PwC) last year was £0.7 million, including £0.1 million for tax advice. The rest was predominantly associated with the prospective acquisition of Project Performance Corporation.
All Directors, at the time this report was approved, confirm that so far as they are aware, there is no relevant audit information of which the Group’s auditors have not been made aware; and that they have taken all the steps that they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
By order of the Board
Philip Roper
Company Secretary
12 June 2008
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