annual report 2008

SLR Management Limited Report and Financial Statements 2008

solutions for today’s environment

PAGE : 02

SLR is an international environmental consultancy with a network of offices in Canada, Ireland, UK and USA. It provides

advice and support on a wide range of strategic and site specific environmental issues to a diverse and growing base of

business, regulatory and governmental clients. SLR specialises in the energy, waste management, planning & development,

industrial, mining & minerals and financial & professional sectors.

The period covered by this report is from the date of incorporation of the company on 18 March 2008 to 31 October 2008.

The majority of the income and expenses for the period relate to the period from 27 May 2008 to 31 October 2008,

following the acquisition by the company of the group headed by SLR Holdings Limited on 27 May 2008. The report also

compares the management accounts of the Group from 27 October 2007 to 31 October 2008, with the audited figures for

SLR Holdings Limited for the year to 26 October 2007, to allow an assessment of the ongoing development of SLR.

SLR Management Limited

Annual Report for the period ended 31 October 2008

PAGE : 03 Highlights

PAGE : 04 Chairman’s Statement

PAGE : 06 Chief Executive’s Review

PAGE : 08 Acquisitions

PAGE : 10 Energy

PAGE : 12 Waste Management

PAGE : 14 Planning & Development

PAGE : 16 Industry

PAGE : 18 Mining & Minerals

PAGE : 20 Financial & Professional

PAGE : 22 Sustainability

PAGE : 24 Board of Directors

PAGE : 26 Report of the Directors

PAGE : 31 Report of the Independent Auditors

PAGE : 32 Financial Statements

PAGE : 36 Notes to the Financial Statements

More than 10 years

7 to 10 years

5 to 7 years

3 to 5 years

1 - 3 years

New for 2008

23%

7%

39%

15%

PAGE : 03

During the year, SLR has:

• achieved a 73% increase in revenue; the largest increase

in the Group’s history;

• delivered EBITA growth of 59% and maintained profit

margins amongst the best in the sector;

• sustained a high level of repeat revenue;

55% of 2008 revenues came from clients of more than

five years standing;

• achieved strong growth across all the sectors

in which it specialises;

• successfully completed the acquisition and integration

of CSA Group in Ireland, and FMH Consulting and

Architecture and Planning Solutions in the UK;

• maintained its substantial investment in people,

geographic expansion and service extensions; and

• consolidated its position as a leading consultant in the

energy, natural resource and waste management sectors

which continue to experience strong growth.

Revenue Growth 1999 - 2008

Revenue by Length of Client Relationship

7% 9%

60,000

50,000

40,000

30,000

20,000

10,000

0

£000s

£000s

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

EBITA Growth 1999 - 2008

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

01999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Highlights

SLR’s core markets are energy, natural resources, waste

management and sustainability, all of which show continued

resilience, notwithstanding the difficult global economic

conditions. As a result, I am pleased to report that the Group

delivered another strong performance in 2008.

The operations in Canada, UK and US all produced significant organic growth, which

was augmented by the acquisitions of CSA Group in Dublin, Architecture and Planning

Solutions (APS) in Bromley and FMH Consulting in Bath. A fourth acquisition, Bowman

Planton, was completed soon after the year end. CSA is our first European acquisition

outside the UK, and as well as providing a presence in Ireland, significantly strengthens

our capability in carbon management, renewable energy and mining. APS marks SLR’s

entry into architecture, with a particular specialisation in Energy-from-Waste (EfW)

facilities and other major structures for waste recycling, and is an excellent fit with

FMH’s high end structural engineering skills.

During the period, the acquisitions from 2007 were successfully integrated, and

it is particularly pleasing that SLR was voted Environmental Employer of the Year

in Canada in 2008.

As well as excellent financial performance, the Group continued to strengthen areas

such as corporate governance and corporate social responsibility, including existing

SLR operations becoming carbon neutral.

This report represents the first results since, on 27 May 2008, 3i Investments plc invested

£32.5 million as part of a transaction which, including senior debt facilities from Lloyds

TSB, provided the Group with up to £69.5 million in new funding. As part of the

transaction, SLR Management Limited acquired SLR Holdings Limited and its subsidiary

undertakings (the acquisition).

Chairman’s Statement

PAGE : 04


Group Results

The statutory results for the Group are reported from the date of the acquisition

on 27 May 2008 to the Group’s year end, 31 October 2008. To allow comparison

with previous years, we have used unaudited management information for the year

to 31 October 2008 compared with the audited accounts of SLR Holdings Limited

for the year to 26 October 2007.

On the basis of the management accounts, group turnover in 2008 increased by 73%

to £54.6 million from £31.6 million in 2007. Profit before interest, tax and goodwill

amortisation increased by 59% to £8.9 million in 2008 from £5.6 million in 2007,

representing a margin of 16%. This strong performance from the Group builds upon

its long term track record of consistent growth; average compound annual growth in

turnover over the last three years has been 44% and in profit before interest, tax and

goodwill amortisation has been 41%.

Dividends

SLR Management Limited has not paid any dividends during the period.

Balance Sheet and Cash Flow

Consolidated net assets at 31 October 2008 stood at £47.1 million.

With strong cash conversion from operating profit, the net cash inflow from

operating activities was £2.35 million for the 7 month period ended 31 October 2008.

The year end consolidated balance sheet includes, within intangible fixed assets,

“goodwill” with a carrying value of £67.7 million, which arose on the acquisition on

27 May 2008 and subsequent acquisitions during the period. The goodwill is being

amortised over the Directors’ estimate of its useful economic life, being between five

and twenty years dependent on the acquisition made.

Our People

SLR has a complete and well-balanced Board, representing a wealth of both

industry and corporate experience which will prove invaluable as we take the

business to its next stage of development.

Our staff will always be the Group’s most important asset and I would like to take

the opportunity to thank them for the tremendous efforts they have made during

the period to achieve such a strong performance and to afford us an industry

leading reputation.

Summary

2008 continued the excellent progress achieved by the Group, with a combination

of both organic growth and acquisitive growth. With the introduction of 3i as the new

equity investment partner, we are well positioned to capitalise on the international

growth opportunities notwithstanding the current economic climate.

John Crabtree

Chairman

Date : 18 March 2009

PAGE : 05

PAGE : 06

Chief Executive’s Review

SLR experienced another period of strong growth in 2008,

notwithstanding the worsening global economic conditions.

Energy, waste management and natural resources remain the

largest business areas and all of these sectors performed well

throughout the period.

As part of the Group’s continued evolution into a global provider of environmental

consultancy services, a new minority private equity investor was introduced during

the period. Having received unsolicited approaches from over 30 potential investors

from Europe and North America, 3i was selected as the preferred new partner. 3i’s

business model is to invest in well managed international businesses and support

their growth into leading players in the world market. This, combined with 3i’s

international network of contacts and the commitment to use them in supporting

SLR’s growth, made them the ideal choice for the next phase of SLR’s development.

Strategy

The Group has a clear strategy focused on providing high quality consultancy and

advisory services to clients with whom it develops and retains long term

relationships. The strategy is based on organic growth, augmented by the selective

acquisition of high calibre companies to strengthen and extend our technical and

geographic coverage.

Development is targeted towards sectors which have high growth potential and

which are also sufficiently specialised to allow SLR to establish leading market

positions either in terms of market share or technical expertise. These sectors

include energy, waste management, planning & development, industry, mining

& minerals, and financial & professional.

The success of the approach can be measured not only by the excellent growth

and profitability of SLR, but also by exceptionally high client satisfaction ratings

and client retention; more than 50% of the Group’s turnover in 2008 derived from

clients with whom we have worked for five years or more.

With the recent investment by 3i, the focus is on a 3 - 5 year growth cycle and

current economic conditions should assist in the acquisition of quality companies

at more realistic earnings multiples than in the recent past. As a result, the balance

of growth in 2009 and 2010 is likely to reflect a greater emphasis on acquisitive

growth than historically.


Operating Review

We have continued to make significant investments to develop the Group, with

staff numbers increasing from 577 on 26 October 2007 to 691 on 31 October 2008.

In 2008, we opened offices in Chelmsford, Exeter, Houston and Indianapolis as well

as acquiring additional offices in Dublin and Bath as part of transactions. During 2009,

we plan to open new offices in Belfast and Stafford.

As in previous years, the waste market continued to experience strong growth, with

both the Landfill Directive and the Landfill Tax escalator driving new developments

in both the public and private sectors. The high energy price, with oil peaking at over

$130/barrel, continued to drive investments in the energy sector and ongoing

demand for natural resources supported growth in the mining and minerals sector.

While the private equity firms were badly hit, particularly in the second half of the

year, the increasing focus on stable markets saw a pickup in infrastructure investments

which supported continued SLR growth in the financial and professional sector. The

two areas which were impacted by the downturn in the economy were planning and

development and industry, but fortunately we were able to redeploy staff across the

Group which largely mitigated the effect.

The acquisitions from 2007 were fully integrated and rebranded during 2008, and

three further acquisitions were made; CSA Group in Dublin, FMH Consulting in Bath

and Architecture and Planning Solutions in Bromley. A fourth acquisition, Bowman

Planton, was completed immediately after the year end.

The UK has continued to be our largest market, representing approximately 51%

of Group turnover for the 2008 financial period, whilst we have significantly grown

revenues from both in Canada, which now represents approximately 31% of Group

turnover, and in the US which now represents approximately 13% of Group turnover.

Europe represents the balance with 5% of turnover.

PAGE : 07

Market Overview

Current estimates suggest that the global environmental consultancy market is

valued at approximately £24 billion. The US is the biggest market, estimated at £9bn,

followed by the European market at £7.5bn. The UK market makes up about £2bn of

the European figure when planning consultancy is included. Historically, growth has

been about 10% per annum, with the UK experiencing closer to 20% growth in recent

years. Growth in 2009 and beyond is much more difficult to predict in the current

economic climate. ENDS, the leading professional publication in the environmental

sector the UK, has indicated that 5% growth is a reasonable assumption, which is

consistent with analyst’s forecasts for the consulting sector which tend to vary

between 0% and 10%.

What is clear is that growth will be much more sector dependent than in the past.

Energy, waste management and mining continue to be resilient, whilst the

development and financial services sectors are in significant decline. Nonetheless,

the key drivers in the environmental market remain:

• a high volume of new legislation and regulations;

• the high cost of natural resources by historic standards which continues to drive

development spending on new assets and environmental remediation of

existing assets;

• the Stern Review, Kyoto Protocol and security of energy supply issues stimulating

the move to local and sustainable energy sources;

• the introduction of financial penalties for non-compliance;

• an increased awareness of the reputational issues, responsibilities and liabilities

facing both private and public sector institutions; and

• lack of experienced staff resources within those public and private sector

institutions to address this complex and highly specialist area.

All of these factors are widely anticipated to be present for the foreseeable future,

providing a continued platform for the growth of both the overall environmental

market and SLR, even in the current economic conditions. In the medium and long

term, the issues will be exacerbated by delayed spending during the current economic

downturn, which should lead to even stronger growth as the global economy recovers.

Sector Sales Analysis 2008

waste management

energy

mining & minerals

planning & development - commercial

planning & development - public sector

industry

financial & professional

24%

27%

11%

9%

10% 9%

10%

Chief Executive’s Review Acquisitions

PAGE : 08


CSA was a Dublin-based environmental consultancy focussing on energy, waste, mining and infrastructure projects. SLR was already working with

CSA on a number of projects and the acquisition represents an ideal platform to develop a significant waste management and energy consultancy

in Ireland. The Irish waste market faces the same challenges as that of the UK and if anything is further from meeting key European targets.

This will inevitably mean significant investment in major schemes over the next 10 years.

The opening of the Belfast office in 2009 will allow an “all Ireland” approach to the market, assisted by the rebranding of CSA as SLR Consulting

Ireland. As with the earlier acquisitions, the integration has gone well with no staff or clients being lost in the process.

CSA Group Limited

FMH was a specialist structural engineering consultancy based in Bath, working on some of the most iconic developments currently being undertaken

in the UK and Ireland. The acquisition was primarily aimed at strengthening SLR’s structural engineering capability to support the design of major

waste infrastructure.

FMH was fully integrated at the end of the year, with staff working closely with SLR colleagues particularly in Bristol and Bradford on Avon.

FMH Consulting Limited

APS was an architectural practice specialising in the design of EfW plants. A typical plant, capable of handling 300,000T – 500,000T of waste per annum,

is as large as St Paul’s Cathedral, and therefore getting a design which is both operationally efficient and sympathetic to the local environment is critical.

APS had developed a strong reputation in the design and permitting of such plants and indeed was already working alongside SLR on a number of schemes.

The acquisition allows SLR to support its clients in all aspects of the development of major waste facilities from site finding to completion.

Architecture and Planning Solutions Limited

PAGE : 09

Chief Executive’s Review Energy

PAGE : 10


Alaska Energy

SLR’s energy sector work in Alaska is robust despite a

weakening of oil prices in the latter part of 2008.

Permitting and compliance support for Exxon, Shell,

ConocoPhillips and other operators seeking to explore and

further develop oil and gas fields on the North Slope of

Alaska and offshore in the Beaufort and Chukchi Seas is

complex. SLR has expanded its Alaskan operations to provide

greater capacity and increasingly diverse services to meet the

existing and expected workload.

In addition to providing permitting services for new

developments, SLR’s support for BP Exploration (Alaska) is

related to the identification of area-wide, risk-based clean-up

levels for the mitigation of impact at former exploration,

development and production facilities and is a multi-year

contract. Risk assessment and toxicology work is ongoing to

establish clean-up levels based on permissible and acceptable

levels of exposure to sensitive receptors.

Consistent with our business model, SLR’s focus is continuing

to leverage the consulting opportunities that will arise

associated with the Alaska energy sector. We will further

expand our operations in Alaska and seek to provide similar

services to clients with operations in the Middle East,

Australia and elsewhere.

Oil prices peaked at $130/barrel in 2008, before falling back to near

$50/barrel by the end of the year. Natural gas prices have been much more

stable and whilst prices peaked in the summer of 2008, they remained within

the range of that experienced over the last 2 years through to the year end.

In the upstream oil market this has led to continued investment in oil and gas exploration and development,

which has benefited the group in both the US and Canada. Projections for 2009 remain strong.

Some investments in the most expensive deposits, notably the Canadian tar sands have been delayed,

but SLR does not have exposure to that market.

The other key development in 2008 was the election of Barak Obama as the new US President. Obama

indicated during his election campaign that he embraces the need to address climate change and will

move rapidly to implement a series of policies on renewable energy and CO2 emissions. Notwithstanding

that, he is a strong supporter of the Alaska Gas Pipeline, and is actively encouraging oil companies to

explore existing offshore leases.

As a significant international energy consultancy, with experience in renewable energy, carbon sequestration

and upstream oil and gas, SLR is in a remarkably strong position to exploit this enormous market which has

very solid long term growth prospects.

PAGE : 11


PAGE : 12

Waste Management

All aspects of the waste management market grew strongly in 2008, with

further progress being made in penetrating the Canadian and US markets.

In Europe, the continued success in the EfW sector was particularly pleasing,

where we were involved in some capacity in over two thirds of the schemes

currently in the development process in the UK and Ireland. This was the

result of careful market development strategy over a number of years,

including the acquisition of Waste Management Engineering Limited in 2005.

SLR’s position in the EfW market was further consolidated in 2008 by the

acquisition Architecture and Planning Services Limited, a leading designer

of such facilities.


One surprising aspect of 2008, given

the turmoil in the financial markets,

was SLR’s increased involvement in

major investments in the sector. With

many waste disposal contracts both

government backed and long term,

typically 10 to 30 years, waste is

increasingly seen as an infrastructure

investment. As a result, major

infrastructure funds have entered the

market alongside the private equity

firms. SLR is firmly established as the

leading European consultant providing

advisory services to investors in the

waste sector.

Cardiff Bay EfW Facility

In late 2006, Viridor, one of the UK’s leading waste

management operators, retained SLR to assist them

in developing the largest EfW plant in Wales.

A site finding and appraisal study by SLR led directly

to Viridor purchasing a site at Trident Park, just 2km from

Cardiff’s city centre. SLR was then appointed to prepare

the planning application, with accompanying Environmental

Statement, and also submit an Environmental Permit for the

facility which will treat up to 350,000T of waste per year.

The Environmental Impact Assessment was one of the

most comprehensive ever undertaken by SLR, and featured

assessments on the key issues including landscape, highways,

noise, air quality, socio-economics and land quality.

In addition, the application was accompanied by an array

of supplementary reports that dealt with subjects including

carbon footprint, flood risk, sustainability, human health and

alternative sites. SLR has also prepared a comprehensive heat

plan to consider the potential of supplying renewable energy

to over 120 businesses and organisations in Cardiff. This work

is on-going, and could ultimately result in the supply of up to

70 MW of heat.

Given the location of the site, which is within a stone’s throw

of the Welsh Assembly Government’s debating chamber

(The Senedd), it was critical that the building was both

striking and sympathetic to the surrounding visual environment.

The design, produced by SLR’s architects, has been embraced

by the Design Commission for Wales, and was effectively

demonstrated by SLR’s bespoke Virtual Reality model of

Cardiff that was created specifically for this project.

The planning application and permit are currently under

consideration, and if all goes well, construction will start

in early 2010.

PAGE : 13

With the increasing variety of waste treatment technologies being sold aggressively in the market,

from composting, AD and MBT, to mass burn incineration, pyrolysis and plasma, it is increasingly

difficult for regulators, operators and investors to determine the most appropriate option. SLR

has unparalleled knowledge of all the technologies currently available and their viability across

a range of geographies, waste types and scales. Clients are increasingly realising that such in depth

knowledge is critical in choosing the correct technical solution, and that SLR can offer truly

independent advice which is not always available from the technology suppliers themselves.

Market research and discussions with clients both in the UAE and Australia has confirmed a

shortage of quality consultants with waste management experience in both those areas. This

represents a major business opportunity for SLR to use waste management projects as a platform

for developing operations in those areas and indeed in the broader international market.

Planning & Development

PAGE : 14



Brent Cross

Over the past two years SLR has been a key member of the team

planning the Brent Cross Cricklewood (BXC) urban regeneration

project in north London.

The BXC scheme is one of the largest redevelopment projects

in London and extends to over 150 hectares of mixed use

development. It will produce some 10,000 new residential units,

400,000m2 of commercial development and over 100,000m2 of

retail development. Sustainable design has been a critical element

of the scheme and, in part, will be achieved through an

imaginative and unique approach to the management of waste.

The BXC masterplan includes the relocation of an existing waste

transfer station, and provision of a new state-of-the-art waste

management facility which will produce a refuse derived fuel for

powering a combined heat and power (CHP) plant that in turn

will meet all of the energy requirements of the proposed

development scheme (including power, heating and cooling),

some 15MW, as well as exporting 25MW of electricity to the

national grid . Waste from the development itself will be

transferred to the waste facility through use of an innovative

underground vacuum waste collection system, thereby avoiding

conventional waste vehicles.

The combination of renewable energy production and innovative

waste handling systems will serve to significantly reduce the

carbon footprint of the development. The overall performance of

the waste management scheme will also be impressive, achieving

recycling rates well in excess of 55%, with over 85% diversion of

waste from landfill.

Overall, the BXC scheme provides a unique opportunity to

facilitate very efficient use of renewable energy within a major

regeneration scheme in terms of heat, power, and cooling, thereby

making a significant contribution to the aim of increasing

renewable energy generation and use within London.

The sustainable energy generation and waste management

aspects of the scheme have been brought together using SLR’s in

depth knowledge of the issues and its experience in the delivery

of sustainable and realistic solutions to the requirements for low

carbon developments.

PAGE : 15

The majority of SLR’s development work is for the public sector,

including education, health, transport and energy. Indeed, in the industry

survey published by Planning magazine, the leading industry publication

in the UK, SLR was ranked first in education, in the top five in energy and

in the top ten in transport.

In contrast to the private sector, the public sector was not affected significantly by the credit crisis in

2008, and all indications from central government are that they will continue to fund key areas such as

education and health to preserve and create employment. This supports a relatively optimistic outlook

for public sector development in 2009.

In residential and commercial development, 2008 started reasonably well but the problems in the

housing markets in the middle of the year hit residential developers hard, with the commercial market

softening more slowly. Fortunately, SLR had relatively little exposure to these markets and in the main

we were able to transfer staff to other business areas such as energy and waste. There is no doubt that

2009 will be a very tough year in the UK development sector, with little prospect of recovery in the

residential and commercial development market, and with the public sector becoming more

competitive as consultancies move into the space from residential and commercial clients.

One region where the development market is holding its own is the UAE, and in particular Abu Dhabi,

where there is a major focus on sustainable development. SLR has a full time presence in Abu Dhabi

and there is significant interest in the services we offer in sustainable energy, waste strategy and

management, waste and water recycling, sustainable buildings and carbon footprinting, for

developments associated with the 2030 Master Plan.

PAGE : 16

Industry

2008 was another difficult year for industry, with the

businesses associated with the construction sector and the

car industry particularly badly hit. Notwithstanding that,

the combined drivers of regulatory compliance and the

increasingly “green” agenda of our clients and their investors,

continued to generate consultancy work.



PAGE : 17

SLR has provided consultancy services to the US airline industry for a number of years, assisting with

the assessment and remediation of historic contamination, which is mainly associated with the storage

and transport of jet fuel. In 2008, drawing in part on sustainability experience gained in Europe, we

were able to extend our support to assist our clients in assessing their broader environmental impact

as part of CSR reporting, and as a basis for continued environmental improvement.

Another example of our underlying strategy to extend our service offerings geographically,

was the first major contract for the pulp and paper industry in the UK.

On behalf of SAICA, we managed the planning application, including undertaking a full environmental

assessment, for their proposed paper mill in Partington, near Manchester. The application was

approved in October 2008, and when commissioned the £250m plant will provide 200 jobs recycling

up to 450,000T of paper a year. It was very pleasing that the planning committee made specific

reference to the quality of the application during their deliberations.

With our existing strong track record in North America, the success of the SAICA application

demonstrated our ability to deliver projects to the wood products and paper industries under the

European permitting regime.

Alaska Airlines

SLR has provided environmental consulting services to Alaska

Airlines since 2003 in support of their operations throughout

the United States. Permitting, compliance and site restoration

services have been provided at airport locations in many

western states.

In 2008, Alaska Airlines selected SLR to assist them in broader

environmental programmes including carbon management and

the preparation of materials to be used for environmental

reporting. Since beginning the carbon management work, SLR

has been asked to provide similar services to Horizon Airlines

which operates a fleet of aircraft throughout the western U.S.

and Canada.

SLR’s broadening capabilities in environmental management

and reporting are becoming increasingly in demand as our North

America clients address new and developing regulations,

particularly at the state and local levels.

PAGE : 18

Chief Executive’s Review Mining & Minerals


Pebble Deposit, Southwest Alaska

The Pebble Deposit in Alaska is a mineral discovery of significant international

importance, with current data suggesting that it is probably the largest copper-gold

porphyry deposit in the world.

The Pebble Limited Partnership, which brings together Northern Dynasty Partnership

and Anglo American, is currently managing one of the most extensive data-gathering

exercises ever undertaken in the history of resource development. This is part of the

Partnership’s commitment to responsible development, and to the protection of all

Alaska’s natural resources and in particular its fish and wildlife.

SLR has been involved with the Pebble development since 2005, providing a range

of environmental consultancy services including undertaking hydrogeological

investigations and trace element studies to provide background environmental data

for use in the preparation of an environmental impact assessment (EIS) and a state

permit application. Fieldwork has included the installation of over 150 groundwater

monitoring wells over the 260km2 site area which is so remote it is only accessible

by helicopter.

2009 will see an expansion of SLR’s role, with the assessment of surface water being

included along with collection of background data on groundwater, soil and flora.

As with the previous field season, staff from Canada and the UK will be supporting

their US colleagues.

PAGE : 19

During the course of 2008, SLR continued to consolidate

its position as a significant consultant to the international

mining and minerals market. The acquisition of CSA Group

in Ireland, and Bowman Planton in the UK, both

internationally recognised experts in the field, further

strengthened SLR’s team and added socio-economic

assessment capability to the existing service offerings.

Given the international nature of the market, it was pleasing to see the level

of co-operation between SLR’s operating companies. On a number of projects,

staff drawn from Canada, the UK/Ireland and the US were involved in executing

the work. What was striking, in contrast to the culture of many of SLR’s

competitors, was the willingness of project managers to pull together the best

and most appropriate team for their client, regardless where those staff were

located in the organisation.

While commodity prices had a rollercoaster ride in 2008, falling in the latter

part of the year, demand for our services has held up strongly and all indications

are that SLR’s market will grow in the sector in 2009.

With our strengthened team and growing international reputation, we are

positive about increasing market share by winning new projects and displacing

competitors on existing projects.

Financial & ProfessionalChief Executive’s Review

PAGE : 20

The financial and professional sector remained robust during 2008, driven by the

increasing interest in the waste management sector on the part of both private equity

and infrastructure funds.


As well as advising Montagu Private Equity and Global Infrastructure Partners

on their £1.7bn investment in Biffa, by far the largest deal in the sector in

2008, SLR also advised a range of investors on acquisitions in Europe and

beyond. This included companies with significant assets in Germany, Austria,

the Czech Republic, the Netherlands and Australia.

It was also noticeable that investors recognised that improved environmental

performance post acquisition would be important and SLR was increasingly

retained to advise the new board after deals were completed.

Insight Equity

With the tightening of the credit markets, private equity firms

are placing greater emphasis than ever on adding value to

existing investments. Working with a select group of private

equity clients in North America, SLR has an established track

record of helping them to achieve that goal.

For example, Insight Equity (based in Dallas, Texas) is a firm that

SLR provided due diligence support upon entering many of their

investments and is now involved in post completion work to

drive value by making environmental improvements and

mitigating risks before exit.

Insight Equity is proactively implementing environmental

compliance programs and adopting best practices to enhance

value at exit. Such programs include the replacement of

infrastructure, more stringent environmental monitoring and

the voluntary clean-up and restoration of land.

Insight Equity and SLR staff routinely work together to identify

and adopt forward-looking measures that can create added value

at exit.

PAGE : 21

PAGE : 22


In previous annual reports, it was felt there was a need to quote the learned studies which demonstrated that climate change

was a real issue with severe global consequences. By early 2008 it was clear that most Europeans had accepted the need for

change and were actively pressing government and the private sector to adopt a more sustainable approach in all aspects

of public life.

The same could not be said of the US, where both views and actions remained mixed, with many in government and the business community of the view that the man

in the street would never accept the constraints of sustainability principles. Another year on, a new President, and the position has changed almost beyond recognition.

New policies are rapidly being put in place to encourage energy efficiency and increase the use of renewable energy on the basis of cost, sustainability and self sufficiency.

As a result it was notable that several major renewable companies, including BP, announced that they were changing their investment focus from Europe to North America

towards the end of 2008.

Leading international corporations based in the US have been unilaterally adopting a sustainable business approach, consistent with their peers elsewhere in the world,

for some time. Increasingly, major investment funds, both in the US and elsewhere, are also asking national US firms to adopt a similar approach and similar environmental

reporting standards.

With an established track record in sustainability assessment and sustainable development, SLR is well placed to take advantage of the burgeoning US market.

This extends not only to individual developments but to strategic studies with respect to carbon capture and sequestration.

Sustainability


PAGE : 23

Summary

The results from 2008 demonstrate that, on an annualised basis,

SLR increased revenues and EBITA by over 50% from the

previous financial year. Given the macroeconomic events during

the year this is considered to be very strong performance.

There is no doubt, however, that 2009 will be an even

tougher year. Notwithstanding that, because of the continued

strength of our core markets of waste management, energy,

natural resources and sustainability, we expect to see

continued organic growth. We are also actively working with

our investors to accelerate our acquisitive growth to take

advantage of the more realistic pricing in the M&A market.

David Richards

Chief Executive


Carbon Capture and Storage

Carbon Capture and Storage (CCS) is seen by many (including the International Panel

on Climate Change, the EU and the UK Government) as an absolute necessity if there

is to be any hope of achieving international goals to stabilise greenhouse gas emissions

and hence prevent global warming rising to unsustainable levels. The CCS process

involves separating the CO2 at its combustion source, such as a power station,

transporting it and injecting it into geological structures found in depleted oil or gas

fields or saline aquifers for permanent storage. SLR consultants have been involved

in this fast growing area of consultancy for a number of years.

In 2007, we were commissioned by the governments of Ireland and Northern Ireland

to undertake an “Assessment of the Potential for Geological Storage of CO2 for the

island of Ireland”. This involved identifying all the current major point sources of CO2

(and projecting them forward to 2020 and beyond) and the geological structures on

and around the island where captured CO2 might be sequestered on a permanent basis.

The SLR led consortium acquired all the available geological data and compiled it into

a geographical information system (GIS) in order to provide a preliminary assessment

of potential storage both onshore and offshore the island of Ireland. This was followed

by an in-depth geological assessment of each identified structure/basin to quantify

its potential for the storage of CO2.

The identification of point source emissions and potential storage locations permitted

nine detailed scenarios to be developed between the major point sources and the most

promising geological storage sites. These scenarios were modelled and subjected

to rigorous economic assessment. This included consideration of different capture

technologies, the transport, engineering, safety and environmental issues, the all-island

energy policy environment, energy security of supply, including the power generation

mix and the possible price of CO2 in 2020.

The report was received positively by the governments, with the Director General

of the EPA referring to it as ‘an important part of the EPA’s programme of climate

change research’ and the Minister stating that ‘it is an important development in

informing future decisions regarding energy technologies’. SLR consultants have been

invited subsequently to brief government officials and address international

conferences on the subject.


Board of Directors

John Crabtree OBE (59) – Non Executive Chairman

John joined SLR in 2004, and is Non Executive Chairman of SLR Management Limited. He was formerly the senior partner atBirmingham-based corporate law firm Wragge & Co, where he led the growth of the practice from a turnover of £15.7 million to a £77.8 million turnover, international business with 110 partners. John retired as senior partner in 2003 but retains a non-executive role.

John is also non-executive Chairman of Metalrax Group plc, Claimar Care Group plc and Birmingham Hippodrome TheatreTrust. He is also a Director of Advantage West Midlands and a non-executive Director of Staffline Recruitment Group plc.

David Richards (50) - Chief Executive

David is the Chief Executive of SLR Management Limited and a director of a number of its subsidiaries with overall responsibilityfor the management of the group. Having established SLR in 1994, he has led the management team responsible for developingSLR into one of the fastest growing and most profitable environmental consultancies in the UK.

Prior to joining SLR, David was a Senior Manager with Golder Associates, a major international environmental consultant, wherehe was responsible for the management of the environmental group in the UK and played a key role in its European operations.David is a Chartered Engineer by profession.

Neil Penhall (44) - Executive Director

Neil has been Managing Director of SLR Consulting Limited since 2001 and is also an Executive Director of SLR Management Limited.Neil has direct responsibility for the day to day operations and management of the UK consulting business and the strategicdevelopment and growth of the company.

Prior to joining SLR in 1995, Neil was a Principal Consultant responsible for the waste management group of US owned RustEnvironmental. He previously worked for Dames and Moore International (which has now become URS, the largest globalengineering design firm). During his 20 years in the environmental consulting sector, Neil has experience of both UK andinternational projects and business development.

Kevin Rattue (49) - Executive Director

Kevin is the President of SLR International Corp, responsible for the U.S. operations, as well as an Executive Director of SLRManagement Limited. Prior to joining SLR in 2000, Kevin was the Chief Operating Officer of SECOR International, a $100m turnoverinternational environmental consultancy with its head office in Seattle.

Kevin has 25 years of experience with environmental consultancies and oil companies and holds an MBA (InternationalBusiness) from the University of Birmingham. He is a Registered Hydrogeologist and also serves as a Director of the British-American Business Council (Pacific Northwest).

PAGE : 24

The SLR Management Limited Board is made up of eight directors, comprising five executive directors and three non-executive

directors. Two of the non-executive directors are independent, with the third nominated by 3i Investments plc.

Alan Sheppard (45) - Executive Director

Alan is an Executive Director of SLR Management Limited. Having joined in 1994, he has overall responsibility for the Energy and the Financial & Professional business areas.

He has over 20 years of consulting experience, primarily in contaminated land and geotechnical engineering, in the UK andCanada having previously founded and managed SEACOR in Vancouver. Alan has extensive experience, including managing theassessment and remediation of over 1500 petroleum facilities; supporting property transactions, planning applications andregulator liaison throughout the UK and Canada; and acting as an expert witness on such matters.

Faramarz Bogzaran (57) - Executive Director

Faramarz is President of SLR Consulting (Canada) Limited where he manages the SLR Group's Canadian operations and is an ExecutiveDirector of SLR Management Limited, having joined the Group following the acquisition of SEACOR Environmental in 2007.

Faramarz has 28 years of technical experience, having joined SEACOR in 1998 as its President and CEO. Over a 10 year period, Faramarzgrew SEACOR's annual revenue from C$6 million to C$32 million, and expanded the company so that it now has over 200 employeesacross 18 offices.

Prior to joining SEACOR, Faramarz held a variety of executive management positions with environmental consultancy companies,waste management operators and remedial contracting organisations.

Faramarz serves the National Steering Committee on Contaminated Sites and the Canadian Centre for Environmental EducationNational Advisory Committee. He also serves the Board of ECO Canada, a federal government sector council board for environmentalemployment in Canada as well as serving ARCAS Group Board, a marketing, research and an advertising company.

Richard Bishop (40) - Non Executive Director

Richard joined the Board of SLR Management Limited in May 2008 at the time of the investment by 3i. He is a partner in 3i’s Growth Capital business which is a leading investor into high growth business in Europe, USA and Asia. He is responsible for the Global Growth Capital portfolio and is also a Director of MKM Building Supplies, AES Seals and LABCO in France.

Richard joined 3i in 1989, after graduating from Birmingham University and previously ran 3i’s business in Birmingham beforemoving to London.

Nish Malde (50) - Non Executive Director

Nish joined SLR in December 2002 to assist the Board with strategy and corporate governance, and is a Non-Executive Directorof SLR Management Limited

He was formerly Group Financial Director and Company Secretary of Country & Metropolitan plc (“C&M”), between 1998 and2005, where he was instrumental in the Group’s flotation on the main market of the London Stock Exchange in December 1999.During his time at C&M he was responsible for the Group’s finances, investor relations and provided close management supportto the CEO. The Group grew from a market capitalisation of £7m to £75m upon its disposal in April 2005. He is also on theboard of AIM listed companies Billam plc and Inland plc.

Prior to C&M, Nish qualified in 1985 as a chartered accountant with KPMG, specialising in advising owner managed businesses,before setting up a consultancy firm advising an extensive range of corporates.

PAGE : 25

Report of the directors for the period ended 31 October 2008


PAGE : 26

Results and dividends

The profit and loss account is set out on page 32 and shows the profit for the period.

No dividends were paid in the period on the company’s A or B ordinary shares.

Principal activities

The principal activity of the company is that of a holding company for the SLR

group of companies, which provide environmental consultancy and related services

from offices in Canada, Ireland, the UK and US.

Trading review

The period covered by the consolidated financial statements is from the date of

incorporation of the company on 18 March 2008 to 31 October 2008. The majority

of the income and expenses for the period relate to the period from 27 May 2008

to 31 October 2008, following the acquisition by the company of the group headed

by SLR Holdings Limited on 27 May 2008.

The results of the group for the period are set out on page 32 and the financial

position of the group is set out on page 33. Further information on the review of the

business and the directors’ expectation of the development of the Group’s activities

for the coming year are given in the Chairman’s statement and Chief Executive’s review

on pages 4 to 23.

Analysis of key performance indicators (KPIs) confirms the strong performance of the

business. On an annualised basis Group revenue increased by 73%, with EBITA increasing

by 59%. Revenue per employee was £81,622 compared with the industry average of

£72,000. Client retention remained excellent with 55% of the revenue derived from

clients with whom SLR has worked for 5 years or more.

During the period the SLR Holdings Employee Benefit Trust (“EBT”) acquired 157,190

shares in the capital of the company as part of the acquisition by the company of the

SLR Holdings Limited group and a further 15,000 shares, (for a consideration of £6,000),

by virtue of purchases from employees leaving the group. The shares held by the EBT

at 31 October 2008 represent 0.3% of the issued share capital at that date.

The directors present their report together with the

financial statements for the period ended 31 October 2008.

The company was incorporated on 18 March 2008 as

De Facto 1619 Limited and changed its name to Green

Acquisitions Limited on 21 April 2008 and to SLR

Management Limited on 25 April 2008.

Shareholder Structure

The shareholder structure at 31 October 2008 was as follows:

3i 33.76%

Directors and senior management 53.64%

Other employees 12.60%

Directors

The directors of the company during the period, were as follows:

D G Richards (appointed 21 April 2008)

A J Sheppard (appointed 28 May 2008)

K G Rattue (appointed 28 May 2008)

N C Penhall (appointed 28 May 2008)

N Malde (appointed 28 May 2008)

J Crabtree (appointed 28 May 2008)

F Bogzaran (appointed 28 May 2008)

R M Bishop (appointed 28 May 2008)

Travers Smith Secretaries Limited (appointed 18 March 2008, resigned 21 April 2008)

Travers Smith Limited (appointed 18 March 2008, resigned 21 April 2008)

At 31 October 2008, third party indemnity insurance for the benefit of the company’s

directors was in force.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial

statements in accordance with applicable law and United Kingdom Generally Accepted

Accounting Practice.

Company law requires the directors to prepare financial statements for each financial

period which give a true and fair view of the state of affairs of the group and company

and of the profit or loss of the Group for that period. In preparing those 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 group will continue in business.

The directors are responsible for keeping proper accounting records which disclose with

reasonable accuracy at any time the financial position of the company and to enable

them to ensure that the financial statements comply with the Companies Act 1985.

They are also responsible for safeguarding the assets of the group and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

PAGE : 27

Charitable donations

During the period the group made charitable donations of £6,653.

Financial Instruments

The Group's operations expose it to a variety of financial risks including the effects of

changes in interest rates on debt, foreign currency exchange rates, credit risk and liquidity

risk. These are monitored by the board of directors and were not considered to be

significant at the balance sheet date.

Credit risk

The Group's policy in respect of credit risk, is to require appropriate credit checks

on potential customers before sales are made.

Cash flow and interest rate risk

Interest bearing assets comprise cash and bank deposits, all of which earn interest at a

market rate. The interest rate on bank borrowings is at market rate and the Group's policy

is to keep the bank borrowings within defined limits such that the risk that could arise

from a significant change in interest rates would not have a material impact on cash flows.

Where appropriate, the Group will enter into appropriate interest rate hedging agreements

to further mitigate the effects of interest rate fluctuations. The directors monitor the

overall level of borrowings and interest costs to limit any adverse effects on the

performance of the Group.

Liquidity risk

The Group's policy has been to ensure continuity of funding through acquiring an element

of the Group's fixed assets under hire purchase contracts and finance leases and arranging

funding for operations via medium and long term loans.

Foreign currency risk

The group is exposed in its trading operations to the risk of changes in foreign currency

exchange rates. The main foreign currencies in which the group operates are the US and

Canadian Dollar and the Euro. The group has trading entities within the USA, Canada and

Ireland to mitigate the exposure to foreign currency risk in these markets. The group does

not use derivative financial instruments to mitigate foreign currency risk.

Corporate Governance

SLR has had a strong system of governance in place throughout its existence.

The Board believes that current standards are commensurate with the nature and size

of the company, and consistent with listed companies of a similar size. The Board

continues to review corporate governance issues in the light of current best practice

and seeks continual improvement.


PAGE : 28


Board Composition and Operation

The board is made up of five executive directors and three non-executive directors.

The executive directors are:

David Richards (Chief Executive)

Neil Penhall (Managing Director of SLR Consulting Limited)

Kevin Rattue (President of SLR International Corp.)

Faramarz Bogzaran (President of SLR Consulting (Canada) Limited)

Alan Sheppard (Director)

The non-executive directors are:

John Crabtree (Independent Chairman)

Nish Malde (Independent Director)

Richard Bishop (3i Investments plc nominated Director)

The board meets regularly and where appropriate operates in a manner consistent

with the recommendations of the Combined Code on Corporate Governance.

The Audit, Remuneration and Nomination committees are formed, in each case,

of two non-executive directors and meet regularly to undertake their responsibilities

in a manner consistent with the recommendations of the Combined Code.

Operating Structure

A key element of the group’s success is the clarity and efficiency of its management

structure and the quality of its management and accounting systems. The group has

four operating companies; SLR Consulting Limited, SLR Consulting (Canada) Limited,

SLR International Corp., and SLR Environmental Consulting (Ireland) Limited which

operate from a network of offices in the UK, Canada, the US and Ireland respectively.

The group operates central accounting and HR functions in each country, all of which

report to the group board.

Employment Policies

The Group’s business is based on attracting, retaining and motivating staff of the

highest technical quality, who are also commercial in their approach and committed

to the strategy and growth of the Group. The Board recognises that the retention and

motivation of existing employees and the attraction of new high calibre employees is

critical in a professional services company. As such, the Group uses a range of dedicated

and sophisticated methods to achieve this, including professional training and

development, a flexible approach to working hours and practices, and a wide range

of staff incentives incorporating government approved ownership schemes.

PAGE : 29

Employment of disabled persons

On the basis of information provided by applicants, and interviews conducted,

SLR did not receive any applications for employment by disabled persons during the

period. Had it done so they would have been assessed in accordance with our equal

opportunities policy, which confirms the Group’s commitment to apply employment

criteria which are fair, equitable and consistent regardless of an applicant’s race, creed,

colour, nationality, sex or disability.

With respect to existing disabled staff, they are treated in accordance with our equal

opportunities policy and are actively encouraged to partake in the career development

and training programmes which are available to all staff.

Employee involvement

As a professional services firm with wide employee ownership, SLR is committed to

providing all its employees with regular briefings on the development of the company

and key issues affecting its staff. This is achieved in a number of ways, using both the

IT systems and direct meetings and discussions.

SLR has an intranet site, SLR Net which provides a wide range of information to all

staff including all employment policies, detailed financial information, news on fellow

employees, company development etc. In addition, the management and senior

technical staff convene regular staff meetings to update staff on the strategic and local

development of the Group, including the potential acquisitions of other companies.

An essential part of these meetings is an open question and answer session where

all employees are encouraged to raise any issues they may have for discussion.

Career development and professional training

The Group is committed to strong organic growth which provides clear opportunities

for staff to develop their careers within the Group. The Group also supports

professional development and has programmes in place to help employees achieve

Chartered status (or equivalent) in their chosen profession.

Employee incentivisation

As well as providing staff with industry standard employment packages in terms of

salary and other benefits, the Group runs a discretionary bonus scheme to which all

staff are eligible. The Group also has a share option scheme and Employee Benefit Trust

to provide ownership to key employees. The employee ownership scheme is considered

by the Board to have been very successful in retaining key employees who are delivering

significant shareholder value.

Internal Control and Risk Management

The Group has always sought to minimise risk in all aspects of its operation. Primary

risks and risk mitigation measures are briefly considered below.

Strategic risks are limited in the Group’s business. It has a focussed strategy, closely

aligned with its capabilities and is operating in a rapidly growing market sector.

The Board is mindful of the risk of a failed or aborted acquisition and is not

contemplating any major changes which could damage the business. The environmental

sector is largely regulatory driven, so the business has a low exposure to political or

general economic risk. The most significant risk is one of reputation and the Group

works hard to mitigate this risk by hiring high quality staff, and applying appropriate

quality management procedures. The nature of the environmental sector tends to

attract staff with high ethical standards. This is reinforced by the Group ethos and

procedures. The overall strategic risk and associated ethical risk are considered low.

The management has a track record of successful leadership and has considerable

strength and depth. The Group has a fast growing and highly motivated professional

staff, many of whom have significant shareholdings in the Group. Risks associated with

both management and key staff are considered low.

The Group has a broadly spread business in terms of sector, geography and client base.

The rapidly growing marketplace provides good opportunities to expand brand

recognition. In terms of suppliers, the Group makes limited use of subcontractors, all

of whom are subject to a strict approval process. Overall market risk, from either clients

or suppliers, is considered low.

The Group normally undertakes work under its Standard Conditions of Engagement

which have recently been reviewed by its legal advisers. Where this is not the case, all

non-standard contracts are reviewed by a Director and referred to the Group’s legal

advisors where appropriate.

The Group has a professional HR team who work with the Group’s legal advisors to

minimise risks associated with employment law. Notwithstanding the above, certain

sectors of the Group’s business, such as development clients, can be litigious, and there

is always some risk with employees. The overall legal and compliance risk is considered

low to moderate.

Financial risks mainly centre around the leveraged nature of the business, although the

level of profitability and the strong cash flow are considered to make this a moderate

to low risk. The Group has a robust accounting function which minimises systemic risk.

The US, Canadian and Irish accounting groups are small and, therefore, there is some risk

as it is difficult to fully separate functions and avoid self checking. The Board is aware

of this and appropriate steps will be taken as the company grows. Overall the financial

risks are considered low to moderate.

Overall the Board considers that risk management within the business is well managed,

although the Board continues to monitor the risk profile as the Group develops.


PAGE : 30

Corporate Social Responsibility

The Board is committed to operating the Group in a socially and environmentally

responsible manner and ensures that appropriate policies are in place to achieve that.

The responsibility for ensuring compliance is delegated to the Board’s Executive

Directors, and by their nature to every employee in their dealings with their colleagues,

clients and the public at large.

The Group has existing policies covering Business Ethics, Environmental Standards,

Equal Opportunities, Family Support, Charitable Contributions, and Health and Safety.

These are subject to regular review, are amended and updated as appropriate and are

as follows:

Business ethics

SLR expects all staff to behave in a professional manner at all times, maintaining the

highest standards of integrity, honesty and conduct, as well as obeying all applicable

laws. The Group works for many clients in the same business areas and encourages

employees to assess and report conflicts of interest, either personal or corporate,

so these can be avoided or resolved to the satisfaction of all parties.

Environmental standards

As a leading international environmental consultancy, SLR is committed to improving its

environmental performance. Although, by its nature, it is not a business with substantial

direct environmental impact, the Group and its employees continually seek to minimise

that environmental impact in a manner consistent with a growing Group with its main

activities focussed on reducing the environmental impact of its clients. Examples of the

practical aspects of the environmental policy are the consistent review of the Group’s

vehicles to drive a sustained reduction in CO2 emissions (whilst also encouraging the use

of public transport where possible), re-use and recycling of the waste stream where

possible, and minimising heat and power usage in offices. The existing operations in

Canada, the UK and the US have been accredited as Carbon Neutral in 2008 and the

recent acquisitions will be included in that programme in 2009.

Equal opportunities

SLR is a people business and is committed to supporting all of its employees. We afford

equal opportunities to all employees and potential employees regardless of race, creed,

colour, nationality, sex or disability. We apply employment policies which are fair,

equitable and consistent with the skills and abilities of our employees and the needs

of the business. SLR will not perpetuate or condone any discriminatory act or attitude

in the conduct of our business with the public or our employees and any acts of racial

or sexual discrimination are regarded as disciplinary offences.

Family support

The Group also recognises the importance of work/life balance in the wellbeing of its

employees. It has developed a series of “family friendly” policies, and has encouraged

part time working and job share, where these are consistent with the needs of the

individual and the Group.

Charitable policy

The Group and its employees support charities at local and national level, and

employees are encouraged to support local communities.

Health and safety

The Group is committed to achieving and maintaining high standards of health and

safety within the organisation. The Group board is responsible for health and safety

within the Group and for ensuring that safety remains a priority and an integral part

of its activities. The companies within the Group have appropriate general Health and

Safety policies, with specific Health and Safety plans and risk assessments being

developed for particular activities or sites. In certain instances, particularly in the oil

industry, the Group’s employees are inducted into our clients’ policies and procedures.

Where this is the case, and the policies are deemed reasonable and appropriate,

the Group requires its employees to conform to those procedures.

Post balance sheet events

On 3 November 2008, the company acquired the entire share capital of Bowman

Planton Limited for a total consideration of approximately £245,000 in cash plus

30,000 B ordinary shares in the share capital of SLR Management Limited.

Auditors

All of the current directors have taken all the steps that they ought to have taken

to make themselves aware of any information needed by the company's auditors for

the purposes of their audit and to establish that the auditors are aware of that

information. The directors are not aware of any relevant audit information of which

the auditors are unaware.

BDO Stoy Hayward LLP were appointed as auditors to the company during the

period and have expressed their willingness to continue in office. A resolution

to re-appoint them will be proposed at the annual general meeting.

By order of the Board

J M Green

Secretary



PAGE : 31

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing

(UK and Ireland) issued by the Auditing Practices Board. An audit includes examination,

on a test basis, of evidence relevant to the amounts and disclosures in the financial

statements. It also includes an assessment of the significant estimates and judgements

made by the directors in the preparation of the financial statements, and of whether

the accounting policies are appropriate to the group's and company's circumstances,

consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and

explanations which we considered necessary in order to provide us with sufficient

evidence to give reasonable assurance that the financial statements are free from

material misstatement, whether caused by fraud or other irregularity or error.

In forming our opinion we also evaluated the overall adequacy of the presentation

of information in the financial statements.

Opinion

In our opinion:

• the group financial statements give a true and fair view, in accordance with United

Kingdom Generally Accepted Accounting Practice, of the state of the group's affairs

as at 31 October 2008 and of its profit for the period then ended;

• the parent company financial statements give a true and fair view, in accordance

with United Kingdom Generally Accepted Accounting Practice, of the state of the

parent company's affairs as at 31 October 2008;

• the financial statements have been properly prepared in accordance with the

Companies Act 1985; and

• the information given in the directors' report is consistent with the financial

statements.

BDO STOY HAYWARD LLPChartered Accountants and Registered Auditors

London


To the shareholders of SLR Management Limited

We have audited the group and parent company financial

statements (the ''financial statements'') of SLR Management

Limited for the period ended 31 October 2008 which

comprise the consolidated profit and loss account, the

consolidated statement of total recognised gains and losses,

the consolidated and company balance sheets, the

consolidated cash flow statement and the related notes.

These financial statements have been prepared under the

accounting policies set out therein.

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the financial statements in accordance with

applicable law and United Kingdom Accounting Standards (United Kingdom Generally

Accepted Accounting Practice) are set out in the statement of directors' responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal

and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair

view and have been properly prepared in accordance with the Companies Act 1985 and

whether the information given in the directors' report is consistent with those financial

statements. We also report to you if, in our opinion, the company has not kept proper

accounting records, if we have not received all the information and explanations we

require for our audit, or if information specified by law regarding directors' remuneration

and other transactions is not disclosed.

We read other information contained in the annual report and consider whether it is

consistent with the audited financial statements. The other information comprises only

the directors’ report, the highlights statement, the chairman’s statement and the chief

executive’s review. We consider the implications for our report if we become aware of

any apparent misstatements or material inconsistencies with the financial statements.

Our responsibilities do not extend to any other information.

Our report has been prepared pursuant to the requirements of the Companies Act 1985

and for no other purpose. No person is entitled to rely on this report unless such

a person is a person entitled to rely upon this report by virtue of and for the purpose

of the Companies Act 1985 or has been expressly authorised to do so by our prior

written consent. Save as above, we do not accept responsibility for this report to any

other person or for any other purpose and we hereby expressly disclaim any and

all such liability.

Report of the independent auditors

640, 3 2 1

247, 1 9 4

887,5 1 5

PAGE : 32


Consolidated profit and loss account for the period ended 31 October 2008

Turnover

Cost of sales

Gross profit

Administrative expenses

Operating profit before goodwill amortisation

Goodwill amortisation

Operating profit

Interest receivable

Amounts written off investments

Interest payable and similar charges

Profit on ordinary activities before taxation

Taxation on profit from ordinary activities

Profit on ordinary activities after taxation

2

Note

5

6

7

17

25,5 24, 307

( 1 1 ,83 3 , 1 20)

1 3,69 1 , 1 87

( 10,945,584)

4,225,520

( 1,479,9 1 7)

2,7 45,603

50,425

(40,65 4)

(1 , 1 46,2 7 3)

1 ,609, 1 0 1

(968,780)

640, 3 2 1

2008£

Consolidated statement of total recognised gains and losses for the for the period ended 31 October 2008

The notes on pages 36 to 50 form part of these financial statements

All amounts shown relate to continuing activities, commenced or acquired in the period.

17

17

Note 2008£

Profit for the financial period

Currency translation differences on net investments

PAGE : 33

Consolidated balance sheet at 31 October 2008

Fixed assets

Intangible assets 9 67,7 44, 3 7 3

Investments

Current assets

Debtors

Cash at bank and in hand

Creditors: amounts falling duewithin one year

1 1 35,6 3 2

69, 1 89, 3 35

1 8,478,605

2,5 56,589

2 1 ,035 , 1 94

1 2

1 4 (1 3,3 29,0 1 9)

Net current assets 7,706, 1 75

Creditors: amounts falling dueafter more than one year 1 5 (29,7 32,580)

47, 1 62,930

Capital and reserves

Called up share capital 54,907

Share premium account 3 1 ,5 1 6,60 1

Merger reserve 1 4,507,049

1 6

1 7

1 7

1 7

1 8

Profit and loss account 1 ,084, 3 7 3

Shareholders’ funds 47, 1 62,930

Total assets less current liabilities 76,895,5 1 0

Tangible assets 10 1 ,409,3 30

The financial statements were approved by the Board of Directors and authorised for issue on 18 March 2009


D G Richards

Director

Note 2008£

2008£

Fixed assets

Note 2008£

2008£

PAGE : 34


Company balance sheet at 31 October 2008

Investments 1 1 5 1 , 3 79,5 35

Debtors


Creditors: amounts falling duewithin one year

1 2,786,75 7

444,789

1 3,2 3 1 ,5 46

1 2

1 4 (4,7 36,640)

Net current assets 8,494,906

Creditors: amounts falling dueafter more than one year 1 5 (29,056,404)

30,8 1 8,037

Capital and reserves

Called up share capital 54,907

Share premium account 3 1 ,5 1 6,60 1

1 6

1 7

1 7

1 8

Profit and loss account (7 5 3 ,47 1 )

Shareholders’ funds 30,8 1 8,037

Total assets less current liabilities 59,874,44 1

The financial statements were approved by the Board of Directors and authorised for issue on 18 March 2009


D G Richards

Director

Current assets

21

Note 2008£

2008£

PAGE : 35

Consolidated cash flow statement for the period ended 31 October 2008


Net cash inflow from operating activities 2,35 5,2 75

Returns on investments and servicing of finance

Interest received 50,425

Interest paid (7 24,3 1 1 )

Interest element of finance lease rental payments (3,694)

(69 1 ,508)

(459,8 1 6)

Capital expenditure and financial investment

Purchase of tangible fixed assets

Sale of tangible fixed assets

(290,7 79)

1 88

(290,59 1 )

Acquisitions and disposals

Purchase of subsidiary undertakings

Bank balances acquired with subsidiary undertakings

(50,90 1 ,077)

3,07 7,645

(47,82 3,43 2)

Cash outflow before use of liquid resources and financing (47,587,652)

Financing

Share capital issued 3 2,500,000

Share issue costs (97 5,000)

Loans advanced in the period 1 8,45 3,900

Capital element of finance lease rental payments (84,6 1 1 )

Employee benefit trust transactions 8 3,568

49,5 3 3,85 7

22, 23Increase in cash 1 ,946,205

(1 ,3 69,088)Net cash outflow from returns oninvestments and servicing of finance

Taxation

Loan stock repayments in the period (444,000)

Loan arrangement fees

PAGE : 36

1 Accounting policies

The financial statements have been prepared under the historical cost convention and

are in accordance with applicable accounting standards. The following principal

accounting policies have been applied:

Basis of consolidation

The consolidated financial statements incorporate the results of SLR Management

Limited and all of its subsidiary undertakings as at 31 October 2008 using the

acquisition method of accounting. The results of subsidiary undertakings are

included from the date of acquisition.

Goodwill

Goodwill arising on an acquisition of a subsidiary undertaking is the difference

between the fair value of the consideration paid and the fair value of the assets and

liabilities acquired. It is capitalised and amortised through the profit and loss account

over the directors' estimate of its useful economic life. Impairment tests on the

carrying value of goodwill are undertaken:

• at the end of the first full year following acquisition;

• in other periods if events or changes in circumstances indicate

that the carrying value may not be recoverable.

Goodwill arising on the acquisition of a company's trade and assets is the difference

between the fair value of the consideration paid and the fair value of the assets and

liabilities acquired. It is capitalised and amortised through the profit and loss account

over the directors' estimate of its useful economic life.

Intangible assets

Intangible assets, other than goodwill, are stated at cost and are amortised through

the profit and loss account over the directors estimate of their useful economic life.

Impairment of fixed assets and goodwill

The need for any fixed asset impairment write down is assessed by comparison of the

carrying value of the asset against the higher of realisable value and value in use.

Turnover

Turnover represents the amounts (excluding VAT or local taxes) derived from the

provision of work for clients during the period.

Services provided to clients during the period which at the balance sheet date have

not been billed, have been recognised as turnover in accordance with Financial

Reporting Standard 5 'Reporting the substance of transactions': Application Note G

'Revenue Recognition'. Turnover recognised in this manner is based on an assessment

of the fair value of the services provided at the balance sheet date as a proportion

of the total value of the engagement. Provision is made against unbilled amounts on

those engagements where the right to receive payment is contingent on factors

outside the control of the company. Unbilled revenue is included in accrued income.

Notes forming part of the financial statements for the period ended 31 October 2008

Stocks

Long term contracts are assessed on a contract by contract basis and are reflected in

the profit and loss account by recording turnover and related costs as contract activity

progresses. Where the outcome of each long term contract can be assessed with

reasonable certainty before its conclusion, the attributable profit is recognised in the

profit and loss account as the difference between the reported turnover and related

costs for that contract.

Depreciation

Depreciation is provided to write off the cost less estimated residual values, of all fixed

assets, evenly over their expected useful lives. It is calculated at the following rates:

Plant and machinery - 20% - 33% per annum

Fixtures and fittings - 15% - 33% per annum

Motor vehicles - 33% per annum

Computer equipment - 33% per annum

Investments

Investments held as fixed assets are stated at cost less any provision for impairment

in value.

Deferred taxation

Deferred tax balances are recognised in respect of all timing differences that have

originated but not reversed by the balance sheet date except that the recognition

of deferred tax assets is limited to the extent that the company anticipates making

sufficient taxable profits in the future to absorb the reversal of the underlying timing

differences. Deferred tax balances are not discounted.

Leased assets

Where assets are financed by leasing agreements that give rights approximating to

ownership ('finance leases'), the assets are treated as if they had been purchased

outright. The amount capitalised is the present value of the minimum lease payments

payable during the lease term. The corresponding leasing commitments are shown as

amounts payable to the lessor. Depreciation on the relevant assets is charged to the

profit and loss account.

Lease payments are analysed between capital and interest components so that the

interest element of the payment is charged to the profit and loss account over the

period of the lease and represents a constant proportion of the balance of capital

repayments outstanding. The capital part reduces the amounts payable to the lessor.

All other leases are treated as operating leases. Their annual rentals are charged to the

profit and loss account on a straight-line basis over the term of the lease.


PAGE : 37

Foreign currency

Foreign currency transactions of individual companies are translated at the rates ruling

when they occurred. Foreign currency monetary assets and liabilities are translated at

the rates ruling at the balance sheet dates. Any differences are taken to the profit and

loss account.

The results of overseas operations are translated at the average rates of exchange during

the period and their balance sheets translated into sterling at the rates of exchange

ruling on the balance sheet date. Exchange differences which arise from translation of

the opening net assets and results of foreign subsidiary undertakings and from

translating the profit and loss account at average rate are taken to reserves.

Pension costs

Contributions to the Group's defined contribution pension schemes are charged to the

profit and loss account in the period in which they become payable.

Government grants and assistance

Grants (and similar assistance) of a revenue nature are credited to the profit and loss

account in the period to which they relate.

Financial liabilities and equity

Financial liabilities and equity are classified according to the substance of the

financial instrument's contractual obligations, rather than the financial instrument's

legal form.

Finance costs

Finance costs are charged to the profit and loss account over the term of the debt

so that the amount charged is at a constant rate on the carrying amount. Finance

costs include issue costs, which are initially recognised as a reduction in the

proceeds of the associated capital instrument.

Research and development

Expenditure on research and development is charged to the profit and loss account

in the period in which it is incurred.

FRS 20 'Share based payment'

The fair value of employee share option plans is measured at the date of grant

of the option using an appropriate valuation model. The resulting cost, as adjusted

for the expected and actual level of vesting of the options, is charged to income

over the period in which the options vest. At each balance sheet date before

vesting, the cumulative expense is calculated; representing the extent to which

the vesting period has expired and management’s best estimate of the achievement

or otherwise of non-market conditions, of the number of equity instruments that

will ultimately vest. The movement in cumulative expense since the previous

balance sheet date is recognised in the income statement with a corresponding

entry in equity.

Employee benefit trust

The cost of the company’s shares held by an employee benefit trust (“EBT”) is deducted

from shareholders’ funds in the group balance sheet. Any cash received by the EBT on

disposal of the shares it holds is also recognised directly in shareholders’ funds. Other

assets and liabilities of the EBT (including borrowings) are recognised as assets and

liabilities of the group.

2 Turnover

Turnover is wholly attributable to the principal activity of the group and arises in the

following geographic markets:

1 2,969,476

3, 1 96,7 38

39,948

25,5 24, 307

United Kingdom

United States

Rest of the World

7,929, 1 1 7Canada

1 ,389,028Europe

Group2008

£

9,5 25,8 35

884,645

1 0,928, 1 5 4

Wages and salaries

Social security costs

404, 384Other pension costs

1 1 3,290Shared based payments

Group2008

£

3 Employees

Staff costs consist of:

The average number of employees, including directors, during the period analysed

by category was as follows:

The company has no employees.

566

1 03

669

Technical

Management and administration

Group2008

No.

PAGE : 38



There were 4 directors in the Group's defined contribution pension schemes

during the period.

The tax assessed for the period is different to the standard rate of corporation tax in

the UK. The differences are explained below:

2 44,99 4

22,094

5 3,590

Fees and remuneration for management services

Payments to defined contribution pension schemes

267,088

Emoluments of the highest paid director:

Emoluments

Group2008

£

4 Directors

Directors' emoluments consist of:

304,05 2

1 ,479,9 1 7

3 5,978

904, 1 7 3

1 6,3 75

1 2 1 ,500

42,900

20,700

69,300

Depreciation - owned assets

Depreciation - leased assets 3 1 ,865

Amortisation

Hire of plant and machinery - operating leases

Hire of other assets - operating leases

Group2008

£

5 Operating profit

This has been arrived at after charging:

Fees payable to the company’s auditor for theaudit of the company’s annual accounts

Fees payable to the company’s auditor andits associates for other services:

- the audit of the company’s subsidiaries pursuant to legislation

- tax services

- IT services

- all other services

1 29,277

426,956

1 2,6 1 4

Profit on ordinary activities before tax

464,226

Effects of:

Expenses not deductible for tax purposes

Goodwill on consolidation

Depreciation for the period in excess of capital allowances

1 2,839Movement in short term timing differences

(2, 1 1 0)Non-taxable income

1 2,027Tax rate differences

(3 1 ,82 3)Other items

1 ,024,006Current tax charge for period

Group2008

£

1 ,06 1 ,935

3,694

1 , 1 46,2 7 3

Bank loans and overdrafts

Hire purchase and finance leases

80,644Unwinding of discount on deferred consideration

Group2008

£

6 Interest payable and similar charges

649,7 76

1 ,024,006

(55 ,226)

968, 780

Current tax

UK corporation tax on profits of the year

Overseas tax 3 74,2 30

Deferred tax

Origination and reversal of timing differences

Group2008

£

7 Taxation on profit from ordinary activities

1 ,609, 1 0 1

Profit on ordinary activities at the standard rateof corporation tax in the UK of 28.85%

8 Profit for the financial period

The company has taken advantage of the exemption allowed under section 230 of

the Companies Act 1985 and has not presented its own profit and loss account in

these financial statements. The Group profit for the period includes a loss after tax

of £866,761 dealt with in the financial statements of the parent company.

PAGE : 39

The goodwill arising on consolidation is being amortised over the directors’ best estimate of its useful economic life, being between 5 and 20 years dependent upon the acquisition made.

9 Intangible assets

Cost

Additions

At 31 October 2008

Amortisation

Provided for the period

At 31 October 2008

Net book value

At 31 October 2008

Group

Goodwill onconsolidation

£

Group Total

£

Computerequipment

£

Motorvehicles

£

Fixtures& fittings

£

Plant &machinery

£

69,2 24,290

69,2 24,290

1 ,479,9 1 7

1 ,479,9 1 7

67,7 44,3 7 3

Cost

4,07 3,03 1Acquired with subsidiaries

(6,825)Disposals

74, 1 69Exchange differences

4,488,694At 31 October 2008

Depreciation

3 35,9 1 7Provided for the period

(5, 390)Disposals

43, 1 38Exchange differences

3,079,36 4At 31 October 2008

Net book value

1 ,409,3 30At 31 October 2008

Assets held under finance leases and hire purchase contracts:

Net book value

72,3 36At 31 October 2008

3 48, 3 1 9Additions

2,705 ,699

2,62 1 ,7 50

(4,987)

4 1 , 1 3 7

2,887,78 1

2 22,862

(3 ,650)

24,2 35

2,0 1 1 , 1 46

876,635

3 7,240

229,88 1

1 ,767,699

6 3,664

-

1 ,640

87, 1 94

5,942

-

7 70

48,892

38, 302

5,702

2 1 ,890

42, 1 80

904,7 59

(1 ,8 38)

24,997

1 ,0 1 1 ,745

69,242

(1 ,7 40)

1 4,24 1

666,384

3 45,36 1

22, 35 2

8 3,827

584,64 1

482,858

-

6, 395

50 1 ,97 4

3 7,87 1

-

3,892

3 52,942

1 49,03 2

7,042

1 2,7 2 1

3 1 1 , 1 79Acquired with subsidiaries

10 Tangible assets

PAGE : 40



Subsidiary undertakings

The subsidiary undertakings in which the company's interest at the year end was 20% or more are as follows:

Country ofincorporationor registration

Class ofshare capital

held

Proportionof share

capital held

Natureof business

SLR Consulting Limited*

SLR Group Limited*

SLR International Corporation*

England

England

USA

Ordinary

Ordinary

Ordinary

100%

100%

100%

Environmentalconsultants



Holding company

SLR Holdings Limited England Ordinary 100% Holding company

Name

SLR Consulting (Canada) Limited* Canada

John Barnett Associates Limited† Ireland Ordinary 100% Environmentalconsultants

CSA Oil & Gas Services Limited† Ireland Ordinary 100% Environmentalconsultants

CSA Group (NI) Limited† N. Ireland Ordinary 100% Environmentalconsultants


CSA Computing Services Limited† Ireland Ordinary 100% Software development

Crowe Schaffalitzky & AssociatesLimited†

Ireland Ordinary 100% Environmentalconsultants

Architecture and Planning Solutions Limited

England Ordinary 100% Architects

SLR Environmental HoldingsLimited

Ireland Ordinary 100% Holding company

SLR Intermediate Holding Company Limited***

England Ordinary 100% Holding company

SLR Environmental Consulting(Ireland) Limited**

Ireland

Insite Environments Limited* England Ordinary 100%

SLR Contracting Limited†† England Ordinary 100% Dormant

SLR Trustee Limited†† England Ordinary 100% Dormant

SLR (Isle of Man) Limited†† Isle of Man Ordinary 100% Dormant

Recycled Land Limited†† England Ordinary 100% Dormant

Easywaste Limited†† England Ordinary 100% Dormant

Enviro Research Limited††

* investment held by SLR Holdings Limited

** investment held by SLR Environmental Holdings Limited

*** investment held by SLR Group Limited† investment held by SLR Environmental Consulting (Ireland) Limited†† investment held by SLR Intermediate Holding Company Limited

England Ordinary 100% Dormant

The additions to fixed asset investments represent the

purchase of 100% of the share capital of the SLR Holdings

Limited Group, the CSA Group Holdings Limited Group, FMH

Consulting Limited and Architecture and Planning Solutions

Limited together with the fair value of share based payment

awards made to employees of subsidiary undertakings.

Further details of the acquisitions during the period are

contained in note 25.

Group

Listedinvestments

£

Cost

Acquired with subsidiaries

At 31 October 2008

Exchange differences

76, 38 3

76, 355

(28)

Impairment

Charged in the period

At 31 October 2008


40,65 4

40,72 3

69

Net book value

At 31 October 2008 3 5,6 3 2

At 31 October 2008 5 1 , 3 79,5 35

Company

Groupundertakings

£

Cost and net book value

Additions 5 1 , 3 79,5 35

OrdinaryPreferred

100%100%


A OrdinaryB Ordinary

100%100%

FMH Consulting Limited England Consulting engineers

OrdinaryA Ordinary

100%100%

11 Fixed asset investments

PAGE : 41

-

1 2,476,52 1

1 2,786,75 7

Trade debtors

Amounts owed by group undertakings

298,056Other debtors

-Deferred tax

1 2, 1 80Prepayments and accrued income

Company2008

£

1 4,7 7 1 ,703

-

1 8,478,605

1 9 1 , 1 65

1 87,44 1

3, 3 28,296

Group2008

£

12 Debtors

-

-Corporation tax

Obligations under finance leases and

hire purchase contracts

1 ,202,7 1 4Other creditors

-Accruals and deferred income

-Payments on account

Company2008

£

78,9 1 0

922,5 9 3

1 ,936,64 1

2,787,22 1

4,7 36,6401 3,3 29,0 1 9

28,5 1 5

-

1 ,7 34,749

Bank overdraft (secured)

Bank loans (secured)

1 28,6 1 0Trade creditors

-Taxation and social security

1 ,670,567Amounts owed to group undertakings

6 1 0, 38 4

1 ,7 34,749

3,94 1 ,95 1

1 ,288,055

-

Group2008

£

14 Creditors: amounts falling due within one year

-

Obligations under finance leases and

hire purchase contracts

769,035Other creditors

Company2008

£

43,3 3 2

1 ,40 1 ,879

29,056,40429,7 3 2,580

28,287,369Bank loans (secured) 28,287,369

Group2008

£

15 Creditors: amounts falling due after more than one year

13 Deferred taxation

The movement in the deferred tax asset is as follows:

The deferred tax asset at the balance sheet date is analysed as follows:

Group £

Acquired with subsidiary


At 31 October 2008

Credited to profit and loss account

1 3 3, 1 67

(952)

1 87,44 1

5 5,226

2008

£

80,30 3Accelerated capital allowances

96,3 1 8Short term timing differences

1 0,820

1 87,44 1

Unrelieved tax losses

The bank loans are secured by a fixed and floating charge over the assets of the

company and certain subsidiaries, the company’s shares in SLR Consulting (Canada)

Limited and an assignment of certain Keyman policies.

The loans repayable after five years bear interest at rates of LIBOR plus 2.50% and

LIBOR plus 3.00%. One of these loans is repayable in quarterly instalments with the

remaining loan repayable in two annual instalments.

Included with short and long term other creditors are amounts totalling £2,944,199

for the group and £1,595,642 for the company, which represent the directors best

estimate of deferred consideration payable in connection with the acquisition of

subsidiary undertakings.


PAGE : 42


2008Finance leases

£

78,9 1 0Within one year 1 ,5 42,320

2008Deferred

consideration

£

1 ,7 34,749

2008Bank Loans

£

15 Creditors: amounts falling due after more than one year (continued)

16 Share capital

27,356In more than one year but not more than two years 1 ,066,6 1 82,030,749

1 5 ,976In more than two years but not more than five years 3 3 5,26 19,044,246

-After five years -1 7 ,2 1 2, 3 7 4

1 22,2 422,944, 1 9930,02 2, 1 1 8

Group

Maturity of debt:

2008Deferred

consideration

£

826,607Within one year 1 ,7 34,749

2008Bank Loans

£

43 3 ,7 7 4In more than one year but not more than two years 2,030,749

3 3 5,26 1In more than two years but not more than five years 9,044,246

-After five years 1 7 ,2 1 2, 3 7 4

1 ,5 95,64230,02 2, 1 1 8

Company

2008£

1 8,5 39A ordinary shares of £0.001 each

46,000B ordinary shares of £0.001 each

64,5 39

2008Number

1 8,5 38,7 1 0

46,000,000

64,5 38,7 1 0

Authorised

2008£

2008Number

Allotted, called up and fully paid

1 8,5 39A ordinary shares of £0.001 each 1 8,5 38,7 1 0

36,3 68B ordinary shares of £0.001 each 3 6, 368,5 20

5 4,9075 4,907,2 30

PAGE : 43

The following events took place during the period in respect of the company’s share capital:

- the company was incorporated with an authorised share capital of 1,000 ordinary shares of £1 each, of which two shares were issued and fully paid up;

- on 30 April 2008, a special resolution was passed converting each of the existing ordinary shares of £1 each into 100 B ordinary shares of £0.01 each. On the same date

the authorised share capital was increased to £64,539 through the creation of 1,835,871 new A ordinary shares of £0.01 each and 4,500,000 B ordinary shares of £0.01 each;

- on 27 May 2008 the company issued 3,595,852 B ordinary shares of £0.01 each as part of the consideration for the purchase of the entire share capital of SLR Holdings Limited

and its subsidiary undertakings. On the same date, the company issued 1,853,871 A ordinary shares of £0.01 for which a total consideration of £32,500,000 was received;

- on 5 June 2008, the company issued 1,000 B ordinary shares of £0.01 each as part of the consideration for the acquisition of the entire share capital of FMH Consulting Limited

at a premium of £10,140;

- on 13 June 2008, the company issued 30,000 B ordinary shares of £0.01 each as part of the consideration for the acquisition of the entire share capital of CSA Group

Holdings Limited;

- on 11 July 2008, a special resolution was passed to subdivide the company’s share capital of A ordinary shares of £0.01 each and B ordinary shares of £0.01 each into A ordinary

shares of £0.001 each and B ordinary shares of £0.001 each; and

- on 31 October 2008, the company issued 100,000 B ordinary shares of £0.001 each as part of the consideration for the acquisition of the entire share capital of Architecture

and Planning Solutions Limited.

The A Ordinary and B Ordinary shares rank pari-pasu, except that the company’s Articles of Association provide for a specific formula to be applied in the apportionment of the

remaining assets of the company after payment of its liabilities in the event of a return of assets on liquidation. No options were exercised or lapsed during the period.

18 July 2008

Date of grant

EMI share option scheme

Grantedduring the

periodNo.

489, 398

Optionscarried

forwardNo.

489, 398

305,067 305,067

2 45,388 2 45,388

2 58, 1 00 2 58, 1 00

7 92, 329 7 92, 329

1 62,500 1 62,500

1 20,000 1 20,000

400,000 400,000

2,28 3, 38 4 2,28 3, 38 4

Exerciseprice

(pence)

2 .68

ExercisePeriod

Nov 2008 - Nov 2009

18 July 2008 1 , 368,7 79 1 , 368,7 79 3 . 1 3 Nov 2008 - Nov 2010

18 July 2008 7 7 5,67 3 7 7 5,67 3 6 .60

2 .68

3 . 1 3

6 .60

6 .60

Nov 2008 - Nov 201 1

18 July 2008 280,000 280,000 40.00 Jul 2008 - Nov 201 1

18 July 2008 967,500 967,500 40.00 Nov 2008 - Nov 2012

18 July 2008 1 ,000,000 1 ,000,000 40.00 Nov 2009 - Nov 2013

18 July 2008 Nov 2008 - Nov 2009

18 July 2008 Nov 2008 - Nov 2010

18 July 2008 Nov 2008 - Nov 201 1

18 July 2008 Sept 2008 - Sept 2010

18 July 2008 Nov 2008 - Nov 2012

18 July 2008 Nov 2009 - Nov 2013

4,88 1 , 350 4,88 1 , 350

18 July 2008 40.00

40.00

40.00

Nov 2008 - Nov 2010

Share options

Unapproved share option scheme



PAGE : 44

Sharepremium account

£

Mergerreserve

£

Profit and lossaccount

£

3 1 ,5 1 6,60 1 1 4,507,049 -Share capital issued in the period

- - 640, 32 1Profit for the period

Group

Company

- - 247, 1 94Exchange differences

- - (6,030)Shares acquired by employee benefit trust

- - 89,598Sale of shares by employee benefit trust

- - 1 1 3 ,290Share based payment

3 1 ,5 1 6,60 1 1 4,507,049 1 ,084, 3 7 3At 31 October 2008

3 1 ,5 1 6,60 1 -Share capital issued in the period

- (866,76 1 )Loss for the period

- 1 1 3 ,290Share based payment

3 1 ,5 1 6,60 1 (7 5 3,47 1 )At 31 October 2008

Sharepremium account

£

Profit and lossaccount

£

17 Reserves

18 Reconciliation of movements in shareholders’ funds 19 Commitments under operating leases

-

Shares acquired by employee

benefit trust

-

Sale of shares by employee

benefit trust

1 1 3 ,290Share based payments

Company2008

£

(6,030)

89,598

--

30,8 1 8,03747, 1 62,930

1 1 3 ,290

(866,76 1 )

3 1 ,5 7 1 ,508

Profit/(loss) for the period

Share capital issued in the period

640, 32 1

46,078,5 57

-Exchange differences

Net movement in shareholders’ funds

Opening shareholders’ funds

30,8 1 8,03747, 1 62,930Closing shareholders' funds

247, 1 94

Group2008

£

As at 31 October 2008, the group had annual commitments under non-cancellable

operating leases as set out below:

20 Pensions

The group operates defined contribution pension schemes. The assets of the Schemes

are held in independently administered funds. The pension cost charge represents

contributions payable by the group to the funds.

Operating leases which expire:

Within one year 7 1 ,290302,586

In two to five years 320,3 1 7798,4 1 6

Over five years -59 1 ,082

39 1 ,6071 ,692,08 4

2008Land andBuildings

£

2008

Other

£Group

PAGE : 45

21 Reconciliation of operating profit to net cash inflowfrom operating activities

23 Analysis of net debt

Non-cash changes of £1,192,479 include deferred consideration arising on acquisitions in the year, exchange differences, loan arrangement fees and the unwinding of the discount

on deferred consideration.

2008

£

2,7 45,603Operating profit

1 ,479,9 1 7Amortisation

3 35 ,9 1 7

2,3 5 5,275

Depreciation

1 1 3,290Share based payments

5 7,626Loan arrangement fees

1 ,244Loss on the sale of fixed assets

308,09 1Exchange differences

(1 ,689, 1 77)Increase in debtors

(997,2 36)Decrease in creditors

Net cash inflow from operating activities

22 Reconciliation of net cash inflow to movementin net debt

2008

£

Increase in cash in the period

(3 1 , 1 42,3 5 4)

(1 , 1 34,940)Other non cash movements

Movement in net debt in the period

-Opening net debt

(3 1 , 1 42,3 5 4)Closing net debt

2008

£

1 ,946,205

(1 6,6 42,5 3 1 )

(1 4,696, 326)

(5 7,5 39)

(1 5,25 3,5 49)

Cash inflow from change in debt and lease financing

Change in net debt resultingfrom cash flows

New finance leases and hirepurchase agreements

Debt acquired with subsidiary undertakings

- 2,556,589Cash in hand and at bank

- (6 1 0, 384)Bank overdraft

2,556,589

(6 1 0, 384)

-

-

- 1 ,946,2051 ,946,205-

(5,003,82 7) (3,2 7 7,069)Debt due within one year 1 ,7 26,75 8-

3,868,887 (29,689, 248)Debt due after one year (1 8,45 3,900)(1 5 , 104,2 3 5)

(5 7,5 39) (1 22,2 42)Obligations under finance leases and hire purchase contracts 84,6 1 1(1 49,3 1 4)

(1 , 1 92,479) (3 3,088,5 59)(1 6,6 42,5 3 1 )(1 5,25 3,5 49)

(1 , 1 92,479) (3 1 , 1 42,3 5 4)Total (1 4,696, 3 26)(1 5,25 3,5 49)

Acquiredwith

subsidiaries

£

Cash flows

£

Non-cashchanges

£

At31 October

2008

£

24 Contingent liabilities and guarantees

The company has guaranteed certain bank borrowings of its subsidiary undertakings, SLR Holdings Limited, SLR Group Limited, SLR International Corporation, SLR Consulting Limited

and SLR Consulting (Canada) Limited. At 31 October 2008, total bank borrowings subject to the guarantee amounted to £46,918.



PAGE : 46

25 Acquisitions

On 27 May 2008, the group acquired the entire share capital of SLR Holdings Limited

and its subsidiary undertakings. The book value of the assets and liabilities acquired

(which was equivalent to their fair value), together with details of the purchase

consideration and goodwill arising on acquisition is shown below:

The results of the SLR Holdings Limited Group prior to its acquisition were as follows:

The net cash outflow arising from the acquisition of the SLR Holdings Limited Group

was as follows:

Book andfair value

£

Fixed assets

Tangible fixed assets

Investments

1 , 3 1 2,625

76,38 3

Current assets

Debtors

Total assets


1 5,204, 3 1 5

1 8,922,508

2,3 29, 1 85

Creditors

Net liabilities (4,904,624)

(2 3,82 7 , 1 32)

Consideration:

Settled by shares at fair value 1 4,383,408

Settled by cash (including expenses of £2,046,445) 47,042,80 1

Net liabilities acquired 4,904,62 4

Goodwill arising on consolidation 66,3 30,83 3

6 1 ,426,209

Year ended26 October 2007

£

3 1 ,646,22 2Turnover

4,7 75,5 1 9Operating profit

(7 48,963)Net interest

(1 ,486,679)Taxation on profitfrom ordinary activities

2,5 39,87 7

7 months ended27 May 2008

£

2 7,882, 1 4 4

3,28 1 , 1 6 1

(806, 3 5 7)

(860,66 1)

4,026,5 56Profit on ordinary activitiesbefore taxation 2,399,5 79

1 ,5 38,9 1 8Profit for the period

£

47,042,80 1Cash consideration (as above)

(2,3 29, 1 85)Bank balances acquired

44,7 1 3,6 1 6Net outflow of cash

PAGE : 47

On 5 June 2008 the group acquired the entire share capital of FMH Consulting Limited.

The book value of the assets and liabilities acquired (which was equivalent to their fair

value), together with details of the purchase consideration and goodwill arising on

acquisition is shown below:

Book andfair value

£

Fixed assets

Tangible fixed assets 1 1 , 1 3 4

Current assets

Debtors

Total assets


2 1 8,879

408, 1 99

1 78, 1 86

Creditors

Net assets 287,706

(1 20,49 3)

Consideration:

Settled by shares at fair value 1 0, 1 50

Settled by cash (including expenses of £23,670) 3 3 1 ,86 3

Deferred consideration 1 0 1 ,5 25

Net assets acquired (287,706)

Goodwill arising on consolidation 1 5 5,8 3 2

443,5 3 8

The results of FMH Consulting Limited prior to its acquisition were as follows:

The net cash outflow arising from the acquisition of the FMH Consulting Limited

was as follows:

Year ended29 February 2008

£

603,229Turnover

1 68,804Operating profit

5,086Net interest

(3 5, 1 67)Taxation on profitfrom ordinary activities

1 38,72 3


£

207,7 5 2

85,704

1 ,200

(1 9,460)

1 7 3,890Profit on ordinary activitiesbefore taxation

67,44 4Profit for the period

£

3 3 1 ,86 3Cash consideration (as above)

(1 78, 1 86)Bank balances acquired

1 5 3,677Net outflow of cash

86,904



PAGE : 48

On 13 June 2008 the company acquired the entire share capital of CSA Group Holdings

Limited and its subsidiary undertakings. The book value of the assets and liabilities

acquired (which was equivalent to their fair value), together with details of the purchase

consideration and goodwill arising on acquisition is shown below:

Book andfair value

£

Fixed assets

Tangible fixed assets 43,5 7 3

Current assets

Debtors

Total assets


1 ,2 1 7,698

1 ,7 27,8 1 3

466,542

Creditors

Net assets 1 ,05 4,8 1 7

(67 2,996)

Consideration:

Settled by shares at fair value 1 20,000

Settled by cash (including expenses of £150,390) 1 ,893,655

Deferred consideration 1 ,082,077

Net assets acquired (1 ,05 4,8 1 7)

Goodwill arising on consolidation 2,040,9 1 5

3,095,7 3 2

25 Acquisitions (continued)

The results the CSA Group Holdings Limited group prior to its acquisition were

as follows:

The net cash outflow arising from the acquisition of the CSA Group Holdings Limited

Group was as follows:

Year ended31 December 2007

€

4,07 7,242Turnover

3 8 1 ,669Operating profit

(10,697)Net interest

(70, 1 26)Taxation on profitfrom ordinary activities

300,846


€

1 ,765,47 2

3 5 1 ,997

6,47 1

(47,279)

3 70,97 2Profit on ordinary activitiesbefore taxation 3 58,468

3 1 1 , 1 89Profit for the period

£

1 ,893,655Cash consideration (as above)

(466,5 42)Bank balances acquired

1 ,427, 1 1 3Net outflow of cash

PAGE : 49

On 31 October 2008 the group acquired the entire share capital of Architecture and

Planning Solutions Limited. The book value of the assets and liabilities acquired (which

was equivalent to their fair value), together with details of the purchase consideration

and goodwill arising on acquisition is shown below:

Book andfair value

£

Current assets

Debtors

Total assets


99,83 1

203 ,56 3

1 03,7 3 2

Creditors

Net assets 1 1 1 , 1 04

(92,459)

Consideration:

Settled by shares at fair value 40,000

Settled by cash 3 50,000

Deferred consideration 4 1 7,8 1 4

Net assets acquired (1 1 1 , 1 04)

Goodwill arising on consolidation 696,7 1 0

807,8 1 4

The results of the Architecture and Planning Solutions Limited prior to its acquisition

were as follows:

The net cash outflow arising from the acquisition of the Architectural and Planning

Solutions Limited was as follows:

Year ended30 April 2008

£

208,9 1 8Turnover

1 66, 1 64Operating profit

9, 3 37Net interest

(3 5,2 1 7)Taxation on profitfrom ordinary activities

1 40,28 4

6 months ended31 October 2008

£

20 1 ,992

1 72,284

6,42 2

(3 7,900)

1 75,50 1Profit on ordinary activitiesbefore taxation 1 78,706

1 40,806Profit for the period

£

3 50,000Cash consideration (as above)

(103,7 3 2)Bank balances acquired

2 46,268Net outflow of cash

The deferred consideration for the acquisitions above includes amounts that are

dependent on the performance of the acquired entities subsequent to acquisition.

The acquisitions above contributed the following amounts to group cash flows in the

period from their acquisition to 31 October 2008.

£

2,325,489Net cash inflow from operating activities

459,8 1 6Net cash outflow from taxation

84,6 1 1Net cash outflow from financing

6,862Net cash inflow from returns on investments andservicing of finance

290,59 1Net cash outflow from capital expenditure andfinancial investment



PAGE : 50

26 Share based payments

SLR Management Limited operates equity-settled share based remuneration schemes

for employees: an EMI share scheme for UK employees and unapproved schemes for

overseas employees. Options vest over a period of years and there are no performance

criteria that must be satisfied. Options will lapse if the employee leaves.

Details of movements in options, (by grant date), during the period, together with

information on the exercise price and period of the options is contained in note 16

to the financial statements.

2008Weighted

averageexercise

price(pence)

2008

Number

The exercise price of options outstanding at the end of the period ranged between

2.68p and 40p and their weighted average contractual life was 3.74 years.

Of the total number of options outstanding at the end of the period, 124,402

had vested but had not been exercised.

The weighted average fair value of each option granted during the period

was 5.03p.

The following information is relevant in the determination of the fair value of

options granted during the period under the equity share based remuneration

schemes operated by SLR Management Limited:

1 9 .04 7, 1 64,7 3 4Granted during the period

- -Exercised during the period

- -Outstanding at the beginning of the period

- -Lapsed during the period

1 9 .04 7, 1 64,7 3 4Outstanding at the end of the period

2008

BinomialOption pricing model used

Equity-settled

1 9 .04Weighted average share price at grant date (pence)

2 .68 - 40.00Exercise price (pence)

3 .7 4Weighted average contractual life (years)

1 4.02%Expected volatility

NilExpected dividend

5.07%Risk-free interest rate

The volatility assumption, is based on an analysis of share price volatility for

quoted companies operating in the same sector as the Group.

27 Employee Benefit Trust

The SLR Holdings Employee Benefit Trust (“EBT”) was established on 6 March 2006

to provide benefits to employees, former employees and their dependants (“the

Beneficiaries”). Under the scheme, the trustee, SLR Trustee Limited, purchases the

company’s shares from time to time. These shares are held until the vesting day for

the benefit of the Beneficiaries, in such numbers or proportions that the Trustees

deem reasonable. Shares held by the EBT which had not vested unconditionally in

the Beneficiaries at the year end were as follows:

28 Related party transactions

During the period, the group provided consultancy services to 3i Deutschland,

which is a related party by view of its relationship with 3i Investments plc, a

significant investor in the company. Sales in the period totalled £101,047 and at

31 October 2008 the outstanding balance due from 3i Deutschland was £101,047.

29 Post balance sheet events

On 3 November 2008, the company acquired the entire share capital of Bowman

Planton Limited for a total consideration of approximately £245,000 in cash plus

30,000 B ordinary shares in the share capital of SLR Management Limited.

Group2008

1 72, 1 90Number of shares held

Equity-settled schemes 1 1 3,290

2008

£

The share-based remuneration expense for the Group comprises:

The Group did not enter into any share-based payment transactions with parties

other than employees during the current period.

C Printed on Recycled Silk: 50% recycled British waste. Using 100% genuine printed waste in the recycling process, means that we are helping reduce the pressure on UK landfill sites. The wood from non-recycled pulps used, comes from PEFC and FSC certified forests.

PAGE : 51

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