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Published by sebastian.ambaye, 2019-11-25 11:24:08

IMS Operating Model

IMS Operating Model

Investment Management Services
Operating Model

Contents

1 Introduction ................................................................................................... 1

1.a This Operating Model .................................................................................................. 1
1.b Amey Investments and Amey Investment Management Services................................... 3
1.c IMS Vision and Strategy .............................................................................................. 4

2 Structure ........................................................................................................ 6

2.a Organisational Structure .............................................................................................. 6
2.b Assets Under Management .......................................................................................... 7
2.c Governance ................................................................................................................ 8
2.d Boundaries and Locations ............................................................................................ 9

3 Process......................................................................................................... 10

3.a Our Service offering ...................................................................................................10
i. What we do .......................................................................................................10
ii. How we do it .....................................................................................................10
iii. Compliance Assurance: .......................................................................................11

3.b Process Design ..........................................................................................................15
i. Our Business Management Processes ..................................................................15
A. Our Management Processes.....................................................................................15
B. Project Dashboard ..................................................................................................16
C. SPC Manual............................................................................................................17
D. Management Services Agreement Administration Protocol ..........................................17
E. Finance Manual ......................................................................................................19
F. Finance Model ........................................................................................................19
G. Statutory Accounts Tracker .....................................................................................19
H. Distribution Tracker ................................................................................................21
I. Meeting Matrix ........................................................................................................21
J. Project Calendar......................................................................................................22
K. Correspondence Log ...............................................................................................22
L. Risk Management ...................................................................................................22
M. Event of Default .....................................................................................................23
N. Briefing Papers.......................................................................................................23
O. Compliance Assurance (Internal Project Audit) ..........................................................24
P. Shared Drive Management.......................................................................................24
Q. General Managers (GM) Report ...............................................................................25
R. Variation Management ............................................................................................25
S. Project Plan............................................................................................................26
T. Partnership Board ...................................................................................................26

3.c Financial Control ........................................................................................................27

Investment Management Service Operating Model | November 2019 1

4 People Management..................................................................................... 29

4.a Our People ................................................................................................................29

5 Appendices................................................................................................... 32

5.1 Team Biographies .................................................................................................32
5.2 General Authorities Schedule..................................................................................32
5.3 Health and Safety .................................................................................................32
5.4 Customer Satisfaction............................................................................................32
5.5 SDM.....................................................................................................................32
5.6 Project Dashboard.................................................................................................32
5.7 SPC Manual ..........................................................................................................32
5.8 MSA Protocol ........................................................................................................32
5.9 Finance Manual.....................................................................................................32
5.10 Financial Model ...................................................................................................32
5.11 Statutory Account Tracker....................................................................................32
5.12 Distribution Tracker .............................................................................................32
5.13 Matrix of Meetings...............................................................................................32
5.14 Project Calendar..................................................................................................32
5.15 Correspondence Log ............................................................................................32
5.16 Risk Management................................................................................................32
5.17 Event of Default ..................................................................................................32
5.18 Briefing Papers....................................................................................................32
5.19 Compliance Assurance .........................................................................................32
5.20 Shared Drive Management ...................................................................................32
5.21 General Management Report ................................................................................32
5.22 Variation Management .........................................................................................32
5.23 Project Plan ........................................................................................................32
5.24 Terms of Reference for Strategic Partnership Board................................................32
5.25 People Management ............................................................................................32

Investment Management Service Operating Model | November 2019 2

1 Introduction

1.a This Operating Model

The purpose of this Operating Model is as a repository of current leading MSA Practice for the Amey
Investment Management Services Team (IMS). It is designed as a “living document” which should be
subject to continual review and amendment by all in IMS to capture “what we do and how we do it”.

We are a leading provider of MSA sector to the UK PPP sector with an ambition to be service provider
of choice to our Customers. This ambition is simply not achievable without a fit for purpose
Operational Model.

In arriving at the IMS Operating Model we have identified recent research by McKinsey & Company on
appropriate Operating Models and adopt the following structure:

Figure 1: McKinsey Operating Model

Version Control

The Investment Management Services Operating Model (IMSOM), is a controlled document along with
the full suite of accompanying appendices. These documents are subject to a version control policy,
which limits hard copies to be made available at two locations only, please see below. Soft copies are
also available to be downloaded but users must note that soft copies or printed version are considered
uncontrolled versions.

Document Owners and Location
Hard Copies can be found at the following locations:

Location Name Title E-mail Phone
Asif Ghafoor [email protected]
Amey, 4th Floor, 10 Managing 02074
Furnival Street, Gerry Connelly Director of Amey [email protected] 926903
London, EC4A 1AB Investments.
02074
Precision House, Head of 926910
McNeil Drive, Investment
Eurocentral, Management
Motherwell, ML1 4UR Services

Investment Management Service Operating Model | November 2019 1

Shared Drive Location: \\FURRS001\avldata\#Investment Management Services\MSA
Business\Standard Operating Model

Document Owner Title E-mail Phone
Name [email protected] 07919 210308
Gerry Connelly Head of Investment
Management Services

Update Distribution List:

Name Title E-mail Phone

Version Table:

Version Date Originator(s) Checker Approver Sections
Updated

1 First Issue

1.2 Interim Updates
2 Annual Review + 12

months from first issue

2.2 Interim Updates
3 Annual Review + 12

months from first annual
review

As above pattern

Investment Management Service Operating Model | November 2019 2

1.b Amey Investments and Amey Investment
Management Services

Amey Investments Management Services is part of the Amey Investments, a Group function within
the infrastructure support services company, Amey Plc.

Amey Plc maintains and operates schools, roads, railways, waste plants and communications, water
and power infrastructure and delivers facilities management and prisoner services to Government. The
Amey Investments business unit sponsors, invests in and develops new opportunities in those existing
operational areas plus emerging new markets being driven by data, technology and Government
legislation. These areas greatly impact communities and people’s lives and Amey Investments
approaches all business activity with the aim of creating socially positive outcomes.

Amey Investments Management Services is one of three distinct parts to the Amey Investments, each
having a specific brief in respect of addressing Amey strategic opportunities and the protection and
enhancement of our existing investments base:

Figure 2: Amey Investments - Our Service Offering

Projects and Business Development
This team focuses on strategic development of existing and emerging markets. it incubates
partnerships with technology SME’s and handles M&A and divestment activity.

Business Winning (BW)
This Business Winning team provides a centralised service across three distinct specialisms for all
Amey Business Units: Commercial, Estimating and Quality. They support and advise business unit
bidding activity with new proposals in existing and new market sectors.

The Business Winning Commercial and Estimating team support pre-contract pricing and risk strategy,
as well as mobilisation and post-contract transition activities. Business Winning Quality support
business development activities and proposal planning and development of quality bid submissions.
The Business Winning team are experts in Amey governance, bid process, pricing and risk modelling,
proposal writing and design, with extensive experience and knowledge information management at
the heart of their service.

Investment Management Service Operating Model | November 2019 3

Investment Management Services (IMS)
This operating model is concerned with the IMS team which manages Amey investments in PFI/PPP
Special Purpose Companies (known as "SPC"s) across Highways, Schools and Waste treatment.
Individual PFI/PPP projects to create and maintain public infrastructure and assets are delivered
through separate SPCs and with principal subcontracts carried out by Amey operating Divisions. The
IMS team ensures that the Amey subcontracts are properly performed and compliant with contractual
obligations to the SPCs and also have an eye to increasing the equity value of the SPCs.

The PFI/PPP projects have complex contractual arrangements and multiple stakeholders. It is
important that IMS staff fully understand and execute their role in this complex environment. The IMS
team are in effect a professional asset management consultancy with a Service Level Agreement with
their customers who are the investors in the SPCs and whose duties lie to those investors and not to
their employer, Amey. The IMS team maintains an expert, independent outlook, to look after common
investor interests without partiality to Amey and its subcontracts with the SPCs delivered through
Amey operating Divisions.

As the custodians of a portfolio of multibillion investment assets, the IMS team must build and
maintain the trust of their customers to protect their assets, reputations and investments. The
purpose of the Operational Model is to provide IMS staff with the tools and procedures to undertake
their role by adopting best practice and importantly, IMS staff must continuously demonstrate their
professional independence in their behaviours and actions. By adopting best practice and confidently
presenting independent behaviour, any negative perception of possible conflict in our professional
lives is neutralised. The confidence of our Customers in the IMS independence is critical to our
ongoing success, any behaviours experience by any IMS team member that is contrary to this ethos
should be escalated immediately to the Director of Investment Management Services.

1.c IMS Vision and Strategy

IMS aims to be recognised as a best in class, customer focussed, value adding Service Provider; who
protects, enhances and optimises the investments we look after. We independently and actively
manage, we do not simply report, nor do we ever, in any circumstance, act as a contractual "post-
box". We have the strength in depth to execute our routine duties well but also the capability to excel
when exceptional circumstances demand and extraordinary solutions are sought from our top-tier
professional customers.

Our Customers are highly regarded institutional investors and include:

• Dutch Infrastructure Fund (DIF)

• Equitix Investment Management

• Pension Infrastructure Platform (PiP)

• Dalmore Capital

• InfraRed

• Amber

• Aberdeen Standard Life and many more.

Relationships are key to our service delivery philosophy and we have researched organisational theory
and have adopted a Customer Intimacy Model as the most appropriate services-based model. This
focuses us on delivering our transactional services to a competent high standard, whilst also providing
individuals and teams with rich and diverse skills and experience to enable us to offer added value
additional services to our customers and other stakeholders, where appropriate.

Investment Management Service Operating Model | November 2019 4

Our core commitment to our Customers and stakeholders is to:

• Deliver excellent quality of service, underpinned by a culture of evidential compliance
assurance

• Ensure the needs and requirements of our Customers and stakeholders are clearly defined,
understood and achieved

• Provide committed hands-on management for all projects, with a dedicated point of contact

• Own and nurture, as the primary point of contact, all of the key relationships that form part
of the complex PPP/PFI contractual environment

• Promote continuous business process improvement that will benefit our Customers, and

• Champion professional development through our bespoke in-house training programme
(Investments Continual Professional Development programme) to provide a highly skilled
and motivated team and support SPC Board members training needs.

Whilst our Customers are the PFI/PPP investors, the importance of the end customer for whom the
PFI/PPP project is delivered by the SPCs is clearly paramount. We promote the set-up of Strategic
Partnership Boards with the Local Authority/ Central Government end customers to meet at least on
an annual basis or more regularly as required. These meetings are beneficial as they allow for the
following:

• Mutually respectful and strong relationships to be built focussed on project success

• Identification of any additional opportunities for the stakeholders over the life of the project

• An escalation route for any issues arising from the project.

Investment Management Service Operating Model | November 2019 5

2 Structure

2.a Organisational Structure

The Investment Management Services team is made up of individuals who know how to innovate,
structure and support our investment portfolio to help protect value and grow services. To ensure the
required depth of knowledge and expertise is fostered that will deliver to customer expectations but
with opportunities for cross rotation for staff development, IMS is divided in to three portfolios:

1. Accommodation

2. Waste and Energy

3. Highways and Street lighting.

Within these sectors our team manages the Special Purpose Companies of over 10 PFI projects. Our
portfolio management approach is to ensure that our individual’s strengths and unique experiences,
are focussed in the right sector, while also being able to draw upon other members of team with their
complimentary skills.

Director of Investment Management Services
The Director of Investment Management Services has overall responsibility for building and sustaining
the Managed Services portfolio, its management capability and reputation, and to grow the current
assets portfolio such that we maintain our position as a top tier practitioner. The Director holds Non-
Executive Director Board appointments across various investment SPCs as nominated by Amey and
regularly chairs SPC Boards.

Investment Director
Reporting in to the Director of Investment Management Services, each Investment Director is
responsible for the management and development of a sector portfolio in accordance with the IMS's
annual strategic business plan and priorities. Acting as the sector expert and lead they are responsible
for general management reporting to SPC Boards and to present information and respond to Board
enquiries. They allocate PPP/PFI asset responsibilities within their team and provide day to day
direction and governance reporting checks to ensure that approved activity is properly undertaken and
relevant controls are exercised so that all KPIs are met.

Investment Manager
The Investment Manager role maintains the day to day critical relationships with SPC suppliers. They
monitor service delivery and review the monthly valuations and reports produced by supply chain
partners and advisors and they also control project financials with support from the finance team. In
addition, they are the primary point of contact for the Change Control process within the projects and
are responsible for management of any contractual issues such as defects, variations and resolution of
disputes between contract parties. The Investment Manager deputises for the Investment Director,
relevant to the portfolio.

Head of Finance
The Head of Finance is responsible for financial governance and reporting, ensuring that the PFI
project transactions and financial activities are executed in accordance with the framework of controls
designed to recognise and protect the interests of all equity partners and stakeholders and that
financial statements are complete, accurate and prepared in accordance with generally accepted
accounting principles. Heading up a team of qualified and trainee accountants in Finance Manager and
Management Accounting roles and supported by a Financial Controller, the Head of Finance has
regard to planning for emerging accounting requirements and the continuous enhancement of
processes and solutions to simplify interactions and to inform and protect the PFI Boards in the
execution of their fiduciary duties. The Head of Finance also holds Non-Executive Director Board
appointments across various investment SPCs as nominated by Amey.

Investment Management Service Operating Model | November 2019 6

Finance Manager

The Finance Managers undertake financial accounting and reporting responsibilities for specific SPCs.
They are the first point of contact for any Lender Agent or Board enquiries in respect of finance
matters pertaining to individual PPP/PFIs and they monitor and maintain efficient and effective
measures to deliver quality financial analysis and reporting. They have the analytical, commercial and
communication skills to act as trusted Business Partners to the Investment Managers and to add value
in decision making so as to maintain and enhance the value within the PFI contracts.

Management Accountant

The Management Accountants process approved transactions in respect of purchases and remittances
and produce accounts, cash forecasts and budgets for the SPCs. Working closely with the Finance
Managers and with confidence and professionalism in dealing with all internal and external
stakeholder queries, they deliver timely and accurate accounting information which can be relied upon
to evidence existing financial positions and inform financial projections for planning purposes.

Corporate Company Secretary

IMS via Sherard Secretariat Services Limited (“SSSL”) provides a high-quality Company Secretariat
service to the SPC's. The team comprises four members, led by a director of SSSL, each have multiple
years’ experience in the field and all with wide ranging knowledge of Company Law and Governance.
Full company secretarial services and statutory filings activity is supplemented by Board and
committee meeting support.

Link to 5. Appendices\5.1 Team Biographies

2.b Assets Under Management

PPP Assets and capability
IMS is a specialist investment manager business that has been devoted to the PPP/PFI infrastructure
sector since 2000. This depth of experience enables us to deliver a bespoke service, via investment
management services across a variety of sectors.

We are fortunate to work with some of the most recognised institutional investors in Europe. Our
approach to Customer relationships is bespoke and personal. We develop individual management
service strategies for Customers according to their specific needs.

The table below details the extent of the current projects we deliver service to:

Project Sector Status Project Debt Investments Share % MSA Board
Summary Value AIM1 AVIL2 AMEY Provider Director
Sheffield Highways Operational 16%
Highways Highways Operational Highway Asset £260.1m Yes Yes
Management £279.8m 5% No Yes
N.I Roads In
Construction Strategic £350.2m No Yes
Scottish Roads Highways Network £129.2m 20% Yes Yes
Partnership In Upgrade £235.6m Yes Yes
Construction
Milton Keynes Waste Operational Strategic 50%
Waste Waste Network
Upgrade 16%
North Waste
Yorkshire Recycling and
Waste Collection

Isle of Wight Treatment and
Waste Recycling

Dual Recycling and NA 100% Yes Yes
Cons/Ops Collection

Investment Management Service Operating Model | November 2019 7

Project Sector Status Project Debt Investments Share % MSA Board
Summary Value AIM1 AVIL2 AMEY Provider Director

Cambridge Waste In Recycling and £68.2m 100% Yes Yes
Waste Construction Collection Yes
Yes
Bradford Accommodation Operational Secondary £93.8m 3% 2.5% Yes - Yes
Schools P1 Accommodation Operational Education £169.4m 3% Finance Yes
Accommodation Operational Yes
Bradford Secondary £127.3m 8.5% Yes - Yes
Schools P2 Accommodation Operational Education Finance
Accommodation Operational £112.8m 10% Yes
Dumfries and Secondary £115.4m 3.5% Yes
Galloway Education Yes
Schools Yes Yes
Secondary Yes
Belfast Education Yes
Schools
Secondary
Renfrewshire Education
Schools

Norfolk Street Street Lighting Upgrade and £35.1m 10% Yes
Lighting Asset £38.2m 5% No
Management £24.4m 5% No
Manchester Street Lighting
Upgrade and
Street Lighting Asset
Management
Wakefield Street Lighting
Upgrade and
Street Lighting Asset
Management

MOD Logistics MOD MOD Logistics NA 5% No
Vehicles MOJ Support NA 2% No

Avon and Prisoner Escort
Somerset and Premises
Courts Management

Table 1: Amey Infrastructure Management 1,2 & 3 - investments with Dalmore Capital & Equitix

2.c Governance

The Operating Model (OM) defines the standard operating procedures and various policies created to
clarify, support, and/or implement the principles of our asset management strategy. The Investment
Management business has established the Operating Model as an assurance to deliver uniformity,
equity, quality, efficiency, and compliance of administrative and organisational activities through
standard methods and guidelines to all the projects under our responsibility.

It is intended that the Operating Model will be a live working framework within which the MSA team can
deliver services. It is expected to change to reflect best practice, innovation and lessons learned and will
the basis upon which a project can be mobilised and maintained during steady state operations.

The ongoing maintenance of the Operating Model shall be proactive, iterative, and be functionally
delivered by our internal compliance team, with a review process that is sponsored by the Head of
Investment Management. All documentation forming part of the Operating Model will be reviewed at
least twice a year, any additions or revisions will be added to the manual with annotation in the
revision table reflecting the date adopted or revised. Where additions and revisions have been
requested or proposed they shall be distributed to the General Management team, requesting
comments, subject to this commentary process any changes to the standard documentation will be
implemented within ten working days of the date of which changes were adopted or revised.

The Operating Model will be maintained and distributed electronically via our own internal shared
drive. A hard copy of the manual will be available to the General Management team, but it is

Investment Management Service Operating Model | November 2019 8

important to note any printed copies cannot be guaranteed to be the most recent version, this should
be done via reference to the shared drive for electronic copies.
In addition, to the overall governance structure that underpins the Amey Investments operational
model approach, the IMS team work within a set of formal limits of authority, please see example
cover page below. This approach ensures the following benefits;
• simplifies decision making
• eliminates guesswork and confusion
• a right first-time approach and
• encourages delegation whilst maintaining control.
Formal limits of authority make it easier to be an enabled and agile organisation but also provide the
Amey team, parameters with which to work.

Link to 5. Appendices\5.2 General Authorities Schedule

2.d Boundaries and Locations

Amey Investments boundaries are currently limited to UK, we have no presence, investments or
operations in other countries.

Amey Investments Head Offices is Furnival Street, London with Regional Offices in EuroCentral
Scotland and Rushmore House Belfast. We also have a series of project offices in Allerton Waste
Recovery Park, Olive Grove Sheffield.

Investment Management Service Operating Model | November 2019 9

3 Process

3.a Our Service offering

i. What we do
Through our services to the various PPP/PFI SPCs we have been managing vital public infrastructure
and services projects for nearly twenty years and it’s something we are really proud of. We have
service level agreements with 11 SPCs and for 3 investment holding companies required by our
customers and we appoint Directors to the various project and holding company Boards to ensure
there is sufficient necessary expertise at Executive level.

Although we are part of Amey we are not insulated from the competition and must design our service
offering to meet market developments. To that end we have undertaken customer engagement and
competitor analysis to arrive at our unique service offering which focuses on the delivery of “Value
Added” services.

We do not compete as a low-cost provider for a basic level service offering. Our preferred offering is
to deliver a high-quality base service that meets and exceeds Customers' needs and expectations in
respect of supply chain oversight and management and financial reporting for the SPCs but which is
supplemented from a menu of in-house delivered higher value Additional Services options such as:

• Market leading Compliance Assurance

• Raising finance

• Refinancing advice and services

• Lifecycle release

• Strategic Dispute Management

We aspire to be recognised as a “best in class” customer focussed and value adding service provider
who protects, enhances and optimises the investments we are trusted to look after. To do this we
must deliver excellent service quality to our customers which starts with engagement commitment to
ensure that their needs and requirements are clearly defined, understood and achievable and by
providing committed hands-on proactive management for all projects, with a dedicated point of
contact and a culture of compliance and continual improvement in the business processes and staff
development (through our bespoke training programme, Investments Continual Development
Programme ) to the mutual benefit our customers.

This service offering provides our differentiation in the MSA Service provider market place but we
continually strive to exceed our customers’ expectations – two examples of this are the key strategic
relationships that we own on behalf of our customers at central government and local authority level
and the application of technology to achieve a quantum leap in our ability to audit operational
compliance.

We have outstanding capabilities in managing investments at different periods of their project
lifecycle. We look to manage the changing environment of all projects and the impact on the
associated investments. We’re always working hard to increase the value of our Customers’ and our
own portfolio - which is currently valued at more than £160m - in-line with secondary market trends.

ii. How we do it
As an experienced Investment Management Service provider, we have established a set of robust
processes, procedures and documentation to manage all our projects. These standard documents are
then tailored to each individual project to ensure Customers receive the service they require.

Our approach takes all the benefits of a standardised model including, quality, efficiency, clarity,
transparency and repeatability but then we undertake a systemic review to customise our solutions for
each project and ultimately achieve the benefits of both approaches.

Investment Management Service Operating Model | November 2019 10

The library we have created covers policy documentation, operational manuals, reference guides,
briefing packs, commercial review tools, project plans, risk management, audit plans, as well as day to
day governance documentation such as meeting agenda templates.

An overview of each of the key sections within the standard suite of documentation has been provided
and a set of templates can be found in Section 5 Appendices.

In addition to standard documentation, we maintain a Standardised Filing structure within a Shared
Drive for the PFI/PPP assets. Where a folder is not required for a specific SPC (ie if there are no
external Lenders for a specific project such that no folder for Lenders is required) then the folder will
simply have “– NOT USED” after its name to avoid confusion. The standardised directory allows all of
our staff to easily pick up tasks if required on a variety of projects which adds an additional layer of
resilience into the team. To drive process compliance, each project folder structure will be audited on
a monthly basis as per the guidance note in Appendix 5.20.

We invest considerable attention to Health and Safety as our projects are delivered in extremely
complex environments such as waste treatment and highways management, so we are particularly
aware of the need to design, construct, operate and maintain the infrastructure we manage in a
manner that provides a safe and healthy working environment.

Overall responsibility for Health and Safety rests with each project board and we make certain that we
provide adequate resources, on a day to day basis, to ensure that the boards policy can be
implemented effectively. The IMS team is supported by external expert advisors in undertaking all
necessary monitoring arrangements to ensure that all organisations contracted to deliver activities on
behalf of the project are fully committed to Health and Safety and to discharging their duties under
Health and Safety legislation with an adequate system of health and safety management, meeting the
required standard of our policy.

Director of SPCs have personal liability in relation to Health and Safety. The General Manager has the
responsibility to report to the Board on health and safety matters, including health and safety
performance, major incident reviews; cause analysis and measures being taken to prevent their
recurrence.

Our H&S management framework includes:

• Day to day monitoring, performed by the General Manager and wider IMS team

• Independent, annual, or more frequent, audit of H&S and CDM compliance

• Dashboard reporting on H&S into relevant board meetings

• Training regime, for General Managers to IOSH standard as a minimum

• Ability for the board directors and IMS team to call off independent expert advice
as required.

We also support each of the directors involved in the projects for which we are responsible to arrange
appropriate health and safety training to discharge their responsibilities as directors and the statutory
duties of the Company.

Link to 5. Appendices\5.3 Health & Safety

iii. Compliance Assurance:
One of the main elements of a PPP contract is the fact that the service provision is undertaken on a
self-reporting and monitoring basis with a range of increasing financial penalties for non-delivery of
services which if not remedied can result in the termination of the SPC's subcontractor or in extreme
circumstances the SPC itself.

Systemically the MSA market place has relied on self-reporting and monitoring by the principal
subcontractors to the SPCs, but “contractual chaos” can arise when management systems and
processes used by the subcontractors are not fully fit for purpose or open to retrospective audit
interrogation.

Investment Management Service Operating Model | November 2019 11

As part of our added value service offering, we undertake a series of high-level audits by instigating
an annual audit plan and rigorously checking the self-reporting of our supply chain partners.
This in itself is regarded as good practice in the SPC management sector however as we strive to lead
best practice, we have also partnered with Affinitext to introduce AI technology into the area of
operational compliance assurance.

Affinitext is technology-based compliance tracking and document management software that provides
the foundation for top level Compliance Assurance achievement across our SPCs through transparent
referencing of contract and lender obligations to create task instructions and drive actions to
completion thereby providing resilience in knowledge and obligation management. IMS have also
worked with Affinitext to develop and implement a wider compliance obligation management and
audit capability which requires the operational teams to confirm that the scheduled compliance works
have been undertaken with provision of evidence that the work has been completed before a task or
an obligation can be closed as completed. Task verification is also included to provide an additional
level of management assurance and an audit regime can work from the task scheduling to enable the
investment team to review and audit the wider compliance.

For example, on the Allerton Waste Recovery Park contract there are three waste treatment
processing plants which have over 12,000 items of equipment which are required to be inspected and
maintained as part of the planned and statutory maintenance regime for the facilities. In order to
monitor and audit compliance at an investment level each of the 12,000 items have been designated
to a work stream. A total of c100 workstreams have been identified with a compliance audit task set.
At pre-set frequencies tasks are allocated through the Affinitext system against each work steam.
When the work stream task is completed it is verified as complete by the operational team, along with
the location of the evidence of the work being undertaken. This allows the work completion to be
audited at the works stream level as part of the IMS compliance process.

Figure 3 below provides an overview of the software’s advantages, whilst Figure 4 below provides
detail of its key functions.

Affinitext Overview

• Affintext converts the required documents into its proprietary Intelligent Document Format
(IDF) using specialist staff and algorithms

• Conformed, up-to-date versions of contracts incorporating all amendments in Intelligent
Document Format (IDF) sit within the Affinitext cloud – available as a single-version-of-the-
truth to all contract stakeholders

• Trackable history of each clause at the click of a button. Ideal for PPP/PFI type contracts with
employee churn over 25 years

• Effective compliance monitoring (Statutory & PP Maintenance and Contractual Obligations) –
obligation reminders issued in advance without the need to refer to other documents

• Efficient use of resources managing Contract obligations and referencing documents

• Audit capacity increased significantly on a continual audit planning cycle per project

• All documents are highly secure (ISO 27001, UK Ministry of Defence, Cyber Essentials and
Cyber Essentials Plus accredited).

Figure 3: Affinitext Overview

Investment Management Service Operating Model | November 2019 12

Figure 4: Affinitext Key Functions
Current contracts using Affinitext are:

• Waste: AWRP, Cambridge, Milton Keynes & Isle of Wight
• Accommodation: Belfast, Renfrewshire and Dumfries & Galloway
• Highways: Sheffield.
Our internal audit process provides a further backstop control to supplement the Affinitext framework
and which is designed to
• Protect and enhance returns on investment (ROI)
• Mitigate and manage risks within the projects
• Identify more effective operational, commercial and financial reporting controls
• Improve relationships with key business partners
• Increase confidence in operational contract compliance process
• Identify opportunities for service improvements.
The Internal audit team provide insight and recommendations based on analysis and assessment of
data and business processes with
• A dedicated internal audit team overseeing individual audit activities
• Senior management oversight to ensure independency
• A team supported with tools and technology for efficient and systematic working
• An established methodology and approach with a commitment to integrity and

accountability, our internal audit strategy provides intrinsic value to the board senior
management and acts as an objective source of independent advice. Audits are carried out
by the those who know and understand the projects intimately, but with an added oversight
by our central management team.

Investment Management Service Operating Model | November 2019 13

There are 4 key principles that inform the internal audit approach:

• Simplicity and transparency

• Transferrable and repeatability to roll out effectively to other projects

• Percentage sample quality testing, with more detailed analysis to follow depending
on results

• Adoption of non-adversarial deep dive approach

We ensure that communication with stakeholders and staff development supports our mission to
advance and integrate risk awareness, internal controls, and compliance requirements, as well as to
collaborate on proactive and innovative improvements to business processes through high-quality
assurance and advisory services.

The compliance auditing process is championed by the Investments Director as its senior sponsor.
It provides a structured approach that periodically assesses strategic, operational, financial, and
compliance risk profiles. Reports ultimately link heat map risk statements, and the related acceptance
or mitigation strategies, focusing on the auditable aspects of governance, policies, processes,
and performance.

Customer Relationship Management
We aspire to be the MSA Service Provider of choice to our Customers, so we need excellent
interaction at all levels, and we aim to achieve this through the following:

• Knowing our Customer – building strong, reliable communication channels with our
Customers helps us to get an insight into their expectations, whilst allowing us to anticipate
their future needs, which can be delivered through innovative and bespoke services

• Enhancing Customer Loyalty – fulfilling commitments made and with consistent delivery
of trustworthy and high-quality services creates Customer loyalty and allows for an honest
feedback loop to drive a cycle of continuous improvement for the benefit of our customers

• Offering Value Added Services – our in-house expertise for development of innovative
and creative commercial tools alongside our financial modelling expertise goes beyond the
capabilities of our competitors and peers in the market

• Investing in Continuous Professional Development – we ensure that we have people
with the right skill set and qualifications to deliver high levels of Customer satisfaction.

The organisation, content for and conduct of the Board Meetings provide the set piece periodic
customer interactions which will materially impact customer perception of our service delivery - board
meetings are in effect IMS "shop widow". The Investment Management, CoSec and Finance leads
must liaise ahead of the Board Meetings to share insights and to ensure that they are fully prepared
and that complete and high standard Board Pack and required associated information is efficiently
circulated on time. CoSec is required to monitor and report by exception on any KPI failures that may
arise in respect of Board Meetings and the combined IMS team should re-group after every Board
Meeting to drive actions arising and reflect and assess any improvement activity needed.

The IMS senior management team comprising the Director of IMS, the Investment Directors and the
Head of Finance cultivate personal professional relationships with all the customers. Outside of the
timetabled Board Meetings interaction, the IMS senior team will maintain contact on an informal or as
needs basis that is tailored and responsive to the individual customer and their preferred
communication and engagement modes. Engagement opportunities also include internal and external
networking events for professional updates and emerging industry issues plus the annual Lender visits
we organise for projects.

Whilst the portfolio size and restricted number of customer contacts permits a relatively light touch
approach to customer relationship management and planning, there are nevertheless periodic
Customer Satisfaction reviews undertaken to objectively assess customer satisfaction and help ensure
successful ongoing relationships are maintained. The specific approach is refreshed at each new cycle

Investment Management Service Operating Model | November 2019 14

but typically consists of structured recorded conversations undertaken by the Director of IMS and
Head of Finance across the key customer contacts base. The conversations are guided by a bank of
questions created internally to draw out narrative observations and feedback from the customers on
our service level performance. The specific questions are developed for each new cycle but informed
by re-evaluation of past review questions and observation and feedback on competitor MSA providers
and an internal assessment of relative strengths and weaknesses. The feedback collected from our
customers is pooled and shared with the wider IMS team to identify common themes and determine
any improvement priorities.

Link to 5. Appendices\5.4 Customer Satisfaction Survey

3.b Process Design

i. Our Business Management Processes

A. Our Management Processes
Our IM team covers a wide geographic area, because we need to ensure we are close to the end
users and can also allocate resourcing to the distributed PPP/PFI projects operational bases. This
presents a number of challenges which we have overcome through better, stronger and more agile
methods of working. However, our starting point each year is to ensure that the team is fully engaged
with the wider Amey Investment aims and that we have the right foundation for a collaborative
approach across all parts of the business unit to provide a common sense of purpose and the staff
development opportunities which help to create our high performing teams. We do this through
creation and sharing of an annual Amey Investments Strategic Deployment Matrix ("SDM") which sets
out our Aims and ambition which inform the activities that are needed and the results we want to see.
The SDM ensures that priorities and responsibilities are paired in a cascading way ie secondary
objectives are tied to the primary objective and that it is all flowed down to team members to take
collegiate or individual ownership as the detailed tasks demand.

Figure 5 – IMS High Level SDM

Our teams do operate with a great degree of autonomy but not all our work can be done in a vacuum.
Working autonomously keeps our teams agile and able to respond quickly to complex issues as they
arise, but as required they must also work together to solve problems. We use communication tools to
keep staff connected wherever they are and the IMS management team actively promotes a
collaborative approach using the most up to date software tools.

Investment Management Service Operating Model | November 2019 15

Our collaborative team environment space includes the following tools:

• Teams Management Including Planning

• SharePoint Which Underpins the Teams Environment

• Regular Virtual Meetings, through Skype and the Teams collaboration tool.

Team collaboration is improved by collaborative chat, by setting up regular groups or person-to-
person meetings. This enables not only immediate answers to complex questions, but also gives easy
access to conversations, ideas and outcomes for reference. We still make time for regular traditional
face to face meetings and team building events to make sure that information is widely shared and to
maintain high morale and staff engagement.

Link to 5. Appendices\5.5 SDM

B. Project Dashboard
The Monthly Dashboard exists to provide a snapshot of the Investment Directors management activity
over the previous two weeks and is delivered on the 2nd and 4th Mondays of each month, as set out
in Appendix 5.6. The Monthly Dashboard provides a ready health check of each PPP/PFI project's
status and highlights issues or concerns which may need senior management support or intervention.
It is an important tool for business resilience purposes as it ensures that critical information is shared
and does not become localised or known only to certain individuals which can present problems in the
case of unplanned staff absences but which also ensures that wider customer and stakeholder
relationship management is not compromised through lack of visibility and knowledge of issues to the
senior Investments management. The dashboard highlights key areas of note to Board members and
the IMS Leadership Team and is broken down into the following sections:

• Live Issues Updates

• Monitoring

• Supply Chain Performance

• Financial Matters

• Engagement Notes

• Other/Risk Register Items

• Future Opportunities

• People.

Investment Management Service Operating Model | November 2019 16

The Dashboard reports using a Red, Amber, Green (RAG) icon if the risk is increasing, unchanged
or decreasing.

Figure 6: Example of the Isle of Wight Waste Project Dashboard
Link to 5. Appendices\5.6 Project Dashboard

C. SPC Manual
Each project has a bespoke SPC Manual which has the following purpose:

1. Sets out the key elements of the project
2. Identifies how the Investment Directors (General Manager) manages the particular contract

to meet the requirements of our Customers, with his respective teams.
3. It provides the structure and Governance required to provide assurance to our Customers

that the service being provided is of a standard to be expected
The SPC Manual is reviewed, audited and updated on a 6 monthly basis or sooner if there is a
material change in the project’s status (ie move from construction to operations).
Link to 5. Appendices\5.7 SPC Manual

D. Management Services Agreement Administration Protocol
The Management Services Agreement (MSA) protocol has been drafted to set out the authority of those
that operate within the SPC MSA team. The protocol forms part of the Management Systems and the
Business Plan for each contract. The purpose of the MSA Protocol is to serve as a management tool for
the smooth administration of the Management Services Agreement, which sets out:

• The MSA contractual provisions and obligations
• Deliverables and timelines
• Processes
• Functional responsibilities allocation
• Governance and approval regime.

Investment Management Service Operating Model | November 2019 17

The MSA Protocol is designed to deliver the MSA obligations in a practical way, effectively and
efficiently. The MSA Protocol scope covers the MSA and its related obligations under all contract
documents. The MSA Protocol should be reviewed on an annual basis.

Link to 5. Appendices\5.8 MSA Protocol 18

Investment Management Service Operating Model | November 2019

E. Finance Manual
Each project has a bespoke SPC Finance Manual produced and maintained by the finance function
(see 5.3) which has the following purpose:

1. Sets out the key financial elements of the project

2. Identifies how the Finance Manager delivers the financial responsibilities for each contract to
meet the requirements of our Customers.

The SPC Finance Manual is generally updated on a 6 monthly basis or when there is a material change
in the project’s status (ie move from construction to operations).

Link to 5. Appendices\5.9 Finance Manual

F. Finance Model
Each of the PFI projects has a full life contract financial model that is created and maintained to fulfil
projects’ Senior Lender requirements to deliver financial projections and identify actual financial ratios
achieved in terms of Debt Service and Loan Life Cover for the long term and high value loans
extended to the PFI projects by banks and financial institutions. Following the completion of the PFI
construction phase, the financial models are updated on a six-monthly basis as required by the
financial reporting covenants indicated in the individual PFI Facility or Credit Agreements. The financial
model update process is indicated in the SPC Financial Manual and in accordance with the Credit
Facility protection given to the external lenders, the updates must be approved by Senior Lenders as a
pre-requisite step before any payments can be made to shareholders in respect of distributions
pertaining to interest on shareholder loans or dividends. The SPC Financial Model are confidential to
the SPC and must not be shared out with the SPC or their Lenders.

Link to 5. Appendices\5.10 Finance Model

G. Statutory Accounts Tracker

The production and external audit of annual financial statements is both an obligation for the PFI
projects in relation to their PFI Facility or Credit Agreements and a Companies Law statutory
requirement for limited companies. The statutory deadline for the filing of financial statements at
Companies House is 9 months after accounting period end (6 months for plc entities) but the PFI
Facility or Credit Agreement may stipulate a shorter timeframe to be adhered to and which will be
identified in the Finance Manual. Failure to adhere to the PFI Facility or Credit Agreement deadline will

Investment Management Service Operating Model | November 2019 19

create a reporting information default which may impact the shareholder distributions approval by
Lenders whilst failure to meet the statutory filing deadline results in escalating fines depending upon
the length of delay and can also result in action taken to strike off the company and/or prosecute the
company Directors. Given the adverse consequences noted for delayed financial statements, it is
imperative that the process is controlled and that financial statements are available to the required
timescales. Accordingly, in the month leading up to the final deadline(s) a Statutory Accounts tracker
is created and circulated weekly to the Amey Executive Directors so as to keep them informed on
progress towards completion and filing of any outstanding PFI financial accounts and which provides a
narrative update on any delay circumstances which may be needed for Board discussions.

Amey Investments FINAL SIGN-OFF
List of SPV and Holding Company Accounts - y/e 31 Dec 2018 TARGET DATES
2018 timeline/ownership
Deadline driven by… Status? Comments
PRE-TAX Draft Accounts AUDIT FIELDWORK

Period Ending CoCd Accounting Owner Target Date Complete Sent to Comments Auditor Starts Duration Finance Finance Deadline
Standard (Y/N) Tax/Magma contact Contact
Backup
(Y/N)

ACCOMMODATION 30-Dec-18 1994 FRS 102 LRA/SB Y Y Audit Clearance Confiirmed BDO Apr-19 Fri 28-Jun-19 Deadline for lenders
Project 1
BDO Apr-19
Y
BDO Jan-19
Project 2 30-Dec-18 2110 FRS 102 LRA/SB Y Y Audit Clearance Confiirmed BDO TBC Fri 28-Jun-19 Deadline for lenders
KPMG w/c 25 March
Project 3 LP Y KPMG w/c 25 March Fri 29-Mar-19 Y
LP In Progress BDO Apr-19 Sun 29-Mar-20
Project 4 30-Jun-18 2130 FRS 102 JH/GA Y Fri 28-Jun-19 C.House deadline Y
Project 5 30-Jun-19 2130 FRS 102 JH/GA Y In Progress Fri 28-Jun-19
Project 6 30-Dec-18 1972 FRS 102 LRA/GA Y Audit planned October Fri 28-Jun-19 C.House deadline In Progress
30-Dec-18 1973 FRS 102 Y Y Approved
30-Dec-18 2150 Y Approved Deadline for lenders Y
IFRS Y Audit Clearance Confiirmed
Deadline for lenders Y

Deadline for lenders Y

Project 7 30-Dec-18 IFRS Managed by Group Finance (need to send note to DJ to advise of timescales) BDO TBC Mon 30-Sep-19 Companies House Y
Project 8 30-Dec-18 1974 FRS 102 KPMG TBC Y
LRA/JH Y Y Confimation requested from KPMG Mon 30-Sep-19 C.House deadline
that no audit points oustdanding

H'WAYS/STR.LIGHTING

Project 9 30-Jun-18 2180 IFRS MJ/LP YY BDO TBC Fri 29-Mar-19 Deadline for lenders Y
Project 10 IFRS MJ/LP Audit Clearance Confiirmed BDO Apr-19
5444 FRS 102 BDO Apr-19 Fri 28-Jun-19 Deadline for lenders Y
Project 11 30-Dec-18 CL YY Y
30-Dec-18 1990 Y Y Audit Clearance Confiirmed Fri 28-Jun-19 Deadline for lenders

WASTE 30-Dec-18 5470 IFRS CL/MJ Y Y Audit queries outstanding Deloitte Jan-18 Mon 30-Sep-19 Companies House Y
30-Dec-18 5497 IFRS JH/GA Y Y Audit queries outstanding Deloitte Jan-18 Fri 28-Jun-19 Deadline for lenders Y
Project 12 30-Dec-18 5450 FRS 101 MJ/LP Y Y Audit queries outstanding Deloitte Jan-18 Fri 28-Jun-19 Deadline for lenders Y
Project 13 30-Dec-18 5200 IFRS Managed by Group Finance Audit queries outstanding Deloitte Mon 30-Sep-19 Companies House Y
Project 14 n/a
Project 15

Link to 5. Appendices\5.10 Statutory Accounts Tracke

Investment Management Service Operating Model | November 2019 20

H. Distribution Tracker
The importance of the Financial Model update process for shareholders cashflows requires the process
to be carefully managed and controlled so as to drive timely distributions payments. Accordingly, a
Distributions Tracker is created for the semesterly updates to indicate:

• Date by which updated economic assumptions will be confirmed with Lenders to use in the
model update process

• Date by which each project model will be updated with amended economic and technical
assumptions along with actual financial results recorded for the last six months

• Date by which Board review and approval should be completed to allow for release of the
updated model to the Lenders Agent

• Date by which Lenders approval is targeted to enable payment of shareholders distributions

• Monitoring and reporting by the Finance team of actual progress against the Distributions
tracker helps ensures that the process is kept on track, that shareholders are kept properly
informed on progress and ultimately that distributions are delivered to shareholders at the
earliest possible opportunity.

Distribution Tracker Summary September 2019 Model issued to Shareholders Model issued to Lenders Distribution Date Comments

Target Actual Target Actual Target Actual

Project A 08/10/2019 08/10/2019 14/10/2019 14/10/2019 04/11/2019 07/11/2019

Project B 18/10/2019 18/10/2019 28/10/2019 29/10/2019 18/11/2019 12/11/2019

Project C 16/10/2019 16/10/2019 24/10/2019 24/10/2019 18/11/2019

Project D 15/10/2019 15/10/2019 16/10/2019 16/10/2019 01/11/2019 05/11/2019

Project E 18/10/2019 18/10/2019 25/10/2019 24/10/2019 18/11/2019 12/11/2019

Project F 17/10/2019 11/11/2019 06/11/2019
Project G 30/10/2019
17/10/2019 18/10/2019 18/10/2019 N/A N/A
23/10/2019 30/10/2019 05/11/2019

Project H 18/10/2019 18/10/2019 21/10/2019 21/10/2019 11/11/2019

Project I 09/10/2019 09/10/2019 18/10/2019 18/10/2019 08/11/2019

Link to 5. Appendices\5.12 Distribution Tracker

I. Meeting Matrix
The Meeting Matrix highlights all the key contractual meetings that take place on a weekly/monthly
quarterly/annual basis. It is imperative that this is maintained to ensure compliance to service
provision.
Typical meetings would be as follows:

• Project Company Board Meetings (Full Board and Interim Board)
• Board Updates
• Network Board Meeting
• Monthly Project Meeting
• Performance Review
• Co-comm

Investment Management Service Operating Model | November 2019 21

• Joint Monitoring Group (JMG).

All supporting information prepared for above meetings will be prepared and issued ten days in
advance, allowing attendees time to prepare appropriately for their respective meetings. In addition,
all meeting minutes and actions will be documented and issued in the agreed contractual timescales.

Link to 5. Appendices\5.13 Matrix of meetings

J. Project Calendar
Due to the complexity and scale of the projects that we support we organise all the key project
deliverables into one place so as to ensure complete oversight of what needs to happen and when.
We use a Project Calendar to highlight all the contractual obligations required to ensure the SPC
meets its obligations under the contract.

This is managed via our web based, cloud supported, Affinitext system which raises tasks prior to the
due date and alerts the General Manager (or appropriate person) that a task needs completing. The
timescales for notification and the person assigned the task are all configurable and Affinitext allows
for reporting of the Project Calendar at any point in time. This system ensures that every step of the
task planning process is controlled and visible, from payments being made, sending out reports, and
setting meetings. Affinitext gives the IMS team a clear view of when every task is due and where
necessary allows us to easily shift our resources to achieve deadlines as priorities change, such as
supporting during annual leave.

Link to 5. Appendices\5.14 Project Calendar

K. Correspondence Log
The IMS team have developed a correspondence Log that not only details all formal correspondence
received or issued by the SPC, but which also acts as a management tool. Through automation we
have added a number of additional benefits to the log turning it from a passive database of
correspondence to a proactive tracker, alerting the user to actions before they are left with little
remaining time.

This central repository allows the General Manager to ensure responses are issued when required and
provides shareholders with a holistic view of project correspondence. Alongside the Correspondence
Log there is a naming convention for all correspondence being saved electronically and a detailed
process for getting correspondence signed by the appropriate representative and ensuing
correspondence is issued in the correct format. A summary of this log will be presented at the regular
board meetings to maintain transparency and visibility of all contractual correspondence.

Link to 5. Appendices\5.15 Correspondence Log

L. Risk Management
The IMS team operate an effective risk-management system, which helps identify and manage
potential problems, on behalf of Board Directors before they materialise through a risk identification
elimination and/or avoidance strategy.

All risks require extensive mitigation planning, review and plan implementation. Examples of these
risks include reputation, political, changing environment or people, subcontract commercial issues,
health & safety and environmental risks all of which are relevant to the projects we support.

Using our standard risk register, which is provided for each project, we score each risk based on its
likelihood and impact (1-5, 5 being highest impact or likelihood). In terms of day to day management
the risk register is reviewed by the General Manager at a frequency that is appropriate for the
individual project and the current phase of the project. For instance, it may be that a project changing
from its construction phase to its operational phase requires more frequent review to ensure the
interface risks that this period of change creates are being appropriately managed. The SPC manual
specifies the frequency by which the risk register for that project must be reviewed along with the
appropriate resources to undertake the reviews.

Investment Management Service Operating Model | November 2019 22

In terms of governance and approval, the risk register is reported to the SPC Board at all meetings
(the Board of Directors are the ultimate owners of the SPC risks) and the high risks are detailed in the
Executive Summary for examination and discussion by the Board. In many cases the risk register sets
the agenda for many of the Board meetings, as it is a real time summary of current issues that the
Board should be actively live to and involved in the consideration of necessary risk mitigation
planning.

The General Manager has a responsibility to update Board members where a risk or issue has
materially changed, and it needs to be communicated prior to any formal Board meeting or via
briefing paper should board meetings be arranged far into the future. The method for presenting
material changes to risk will be via the project specific dashboard.

Link to 5. Appendices\5.16 Risk Management

M. Event of Default
On contract commencement the Event of Default checklist will be produced, which will then be
monitored by the General Manager on an ongoing basis to ensure that contractual obligations are
met, and the project doesn’t trigger any Events of Default. We adopt a look forward monitoring
approach so as to identify any key qualitative and quantitative characteristics that are likely to result
in deteriorating positions, before they have passed beyond the point where they can be positively
influenced, for example; tracking and trend analysing operational performance points, payment
performance, occurrence of a Service Provider or Services Sub-Contractor default and timely
submission of all required documentation. The live or pertinent events of default such as these are
monitored on an ongoing basis and reported on during board meetings.

As a minimum the General Manager will undertake an annual review of the monitoring methodologies
of the events of default.

Link to 5. Appendices\5.17 Event of default

N. Briefing Papers
A standard template has been developed for General Managers to issue briefing notes to SPC board
members or relevant personnel across the project. All briefing papers that have been issued are
logged in a briefing paper log stating the date issued, to whom the paper was issued and the subject
matter and the details documented in the briefing are treated under the following headings

• Subject

• Purpose

• Summary

• Corporate Objectives

• Financial Implications

• Recommendation(s)

• Status

• Author

• Date.

The briefing note should include specific details of the matter being reported and any financial
implications to the project budget. If the briefing paper is distributing a report or a third-party
document the note should highlight any specific parts of that report that will be of particular interest
to the SPC Board members.

The briefing note should not detail opinions or recommendations other than those that have been
sought by professional third-party advisers to the project.

Investment Management Service Operating Model | November 2019 23

Link to 5. Appendices\5.18 Briefing papers

O. Compliance Assurance (Internal Project Audit)
As we wait for Affinitix to be rolled out across our portfolios it is important that Compliance Assurance
of the self-reporting contracts not only continue but increase in frequency and depth of audit
capability. This process sets out how the General Manager undertakes regular audits of the operating
sub-contractors service delivery compliance. Each project will have its own specific set of service
specifications and it is against these specifications that the services sub-contractor needs to be
audited and the measurement of compliance must be determined, recorded and summarized.

The Contract Compliance audit plan, includes:

• The approach – The “why” and “how”

• Methodology

• The sample testing strategy, health check/dip testing.

The IMS approach to auditing is an objective assurance and consulting activity engineered to improve
each of our SPCs resilience in operations and to provide peace of mind to our customers that effective
monitoring is undertaken. Our auditing strategy helps each of our Customers accomplish their
objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of
risk management, control and governance processes.

The Internal Audit Plan is created annually with monthly reviews that are topic based and are
undertaken by the Assistant Investment Manager with technical support available within the team as
and when required.

A generic programme of compliance audits has been included below. Compliance Assurance Generic
calendar is as follows:

Nr Date/Month Service Type
February 2019 Building Services
March 2019 Electrical Management
April 2019 - General Site Observations
May 2019 – Building Management
June 2019 – Contract H&S Management
July 2019 – Contract Compliance
August 2019 – Duty Holders’ Roles & Responsibilities
September 2019 – Water Management
October 2019 – Fire Management
November 2019 – Incident and Emergency Preparedness
December 2019 – General Site Observations

Table 2 Compliance Assurance Generic Calendar
Link to 5. Appendices\5.19 Compliance Assurance

P. Shared Drive Management
IMS has an Operating Manual and associated suite of documents to provide a standard approach to
the management and operation all projects. These are documented and referred to throughout the
Operating Manual, and accessible in Appendices folders containing the templates.

Investment Management Service Operating Model | November 2019 24

All documents templates will be held on the Shared Drive and accessible for use by all members of the
IMS.

Each document has an owner, who is responsible for ensuring their document(s) remain up to date,
appropriate and relevant to the business.

These are reviewed monthly, quarterly or annually as appropriate, and if required will be either
confirmed as still current, updated, or removed from the procedures.

The IMS Shared drive has a filing structure in place for all its projects. The use of the file structure is
to ensure consistency in the management of each project. It will ensure that all project
documentation is filed in a standard way, to provide easy searchability for all team members,
resilience in the absence of project leads and evidence that all processes and procedures are being
followed correctly.

Once a month all folders and files are audited and checked to see if they are compliant with the
agreed folder structure. Any non-compliance will be managed in a proactive way, initially with the
project lead, but after 14 days escalated to Head of IMS(?) *Gerry* to achieve compliance

Standard Documents and Templates

In addition, there is a review process in place (6 month or annually) for our Standard Operating Model
(SOM) and associated templates manuals etc. to ensure they are all up to date.

Link to 5. Appendices\5.20 Shared Drive Management

Q. General Managers (GM) Report
We utilise standardise templates for board reporting, as many of our Customers sit on more than one
SPC board, and this facilitates recognisable and easy to digest documentation.

The General Managers Report comprises of an operational performance summary of the project, a
financial summary and any ancillary information as appropriate. This forms the main substance of the
Board Pack. All documents required for the board meetings will be despatched a minimum of 7
working days before the Board Meeting in order to allow sufficient time for Board members to read
and consider the information. Distribution of the GM report is coordinated by Amey Company
Secretary.

Link to 5. Appendices\5.21 GM Report

R. Variation Management
Whenever a contract is being varied i.e. an Authority Notice of Change (ANoC) being administered,
the SPC Manager will ensure that they use as the following as a checklist that all information has been
reviewed and agreed prior to the ANoC being signed by all parties.

It is vital that, at every stage, the parties to a contract know exactly what the terms of that contract
are. Equally, when considering, discussing or finalising a proposed ANoC, it is vital that the parties
know exactly the terms of the contract they are looking to vary:

• Background to Variation

• Project parties

• Capital Costs

• Operational and Revenue Costs

• Model updates

• Contract Documents and Relationships

• Design

• Construction – Building contract

Investment Management Service Operating Model | November 2019 25

• Construction - Insurance

• Construction – Deductions

• Construction – Payments

• Construction – Programme

• Construction - Quality Assurance, Snagging

• Operations – FM

• Operations - defects

• Operations - deductions

• Operations – insurance

• Operations – lifecycle

• Operations – lifecycle

• Other- Consents

• Approvals sought

Link to 5. Appendices\5.22 Variation Management

S. Project Plan
All our General Managers use a standard Project Plan for tasks that require it. This has been
developed over time and well received by Customers and staff alike. Since many of our Customers
cover multiple project this standard approach is preferable.

This document sets out the framework that a General Manager can use to manage individual projects,
that are not business as usual and require a greater degree of control that the general management
tasks that are required by a PPP project.

The project management tool has been developed in a live environment and based upon lessons
learned feedback. It includes a number of useful performance visualization tools for reporting
purposes. All of which can be customised to suit the need. Terms of Reference for Strategic
Partnership Boards

Link to 5. Appendices\5.23 Project Plan

T. Partnership Board
Generally, each SPC holds a Strategic Partnership Board with the PPP/PFI project Local Authority or
Central Government end customer at least on an annual basis or more regularly as required. The
Terms of Reference sets expectations for all parties and provides a framework for collaboration and
engagement to manage key issues to conclusion. A draft Terms of Reference for these meeting has
been established and is tailored by the General Manager when required to meet the objectives of the
particular project. Financial Control

Link to 5. Appendices\5.24 Terms of Reference for Strategic Partnership Boards

Investment Management Service Operating Model | November 2019 26

3.c Financial Control

Background Information
The Finance function comprises a dedicated team of qualified and trainee accountants to deliver the
management accounting and financial reporting needs of the special purpose companies (“SPC”s) set
up for the PFI/PPP contracts. The finance requirements are set out in each SPC specific MSA
arrangement with which each Finance Manager and Management Accountant is required to be familiar
and reference as necessary.

The finance function uses the Amey SAP accounting platform and adheres to Amey processes and
controls and it also meets Amey internal financial reporting requirements (which include additional
forecast, budget and cash management requirements).

Organisational Arrangements
The Head of Finance oversees the finance team supported by a senior Financial Controller. Each SPC
is assigned to the responsibility of a Finance Manager/Management Accountant but standardised
processes and cover within the team ensure that there is business resilience as well as a “personal
ownership” culture. Trainee accountants receive company sponsorship for their external professional
qualification progression and internal mentoring, supervision and peer review arrangements provide
the framework for a high performing team environment.

Business Partnering
The finance function aims to provide effective partnering to IMS operational and management
resources as well as SPC Board members, with support and analysis on demand and adding value to
assist in decision making. Finance team members are developed to:

1. Be commercially aware: able to understand and anticipate the needs of operations and
management

2. Showcase core business skills: including influencing, stakeholder management and
presentation skills

3. Provide accessible expertise: with ability to order, assess and interpret data and present
findings in a clear and concise way.

Business Partnering
The team provides an “end to end” financial service for the SPCs that covers transactions (including
invoicing and processing, payments and collections), management accounting (with actual results
monitored against appropriate agreed forecast and budget benchmarks) plus statutory financial
reporting and tax compliance duties.

The services are delivered within a framework of controls that are designed to safeguard assets,
observe required authorisations and meet prescribed timeline reporting deadlines. The Financial
framework considers the following:

• Planning: It is a key requisite to determine timetables that will meet expectations and
control processes. These include payments processing with necessary approvals,
management accounts production for Board presentation and timelines for interaction with
external advisers in relation to statutory financial reporting, tax and Lenders covenants ratio
reporting

• Controlling: Control processes are indicated in the be-spoke Financial Procedures Manual
maintained for each SPC and separately within Amey Finance procedures disseminated by
Amey Group Finance. It is a pre-requisite of key fiduciary controls that there is adequate
segregation of duties and the application of appropriate review and check procedures that
will help prevent errors arising. The Finance function maintains the “four eyes” principle so
that information presented to stakeholders is subject to independent in-team review before
dissemination in order to maintain highest quality

Investment Management Service Operating Model | November 2019 27

• Reporting: Financial Information is presented in standard format Finance Packs to facilitate
management comparison and understanding across multiple PFI/PPPs. There is periodic and
systematic in-house review and refresh to update formats and content to efficiently deliver
best practice developments and meet shareholders’ needs. Shareholder specific and
separate reporting requirements are also accommodated by agreement, subject to financial
allowance sufficiency and capacity planning. Amey reporting templates are completed plus
SAP BPC consolidation input files for Amey internal reporting purposes only.

Performance Optimisation

IMS aims both to secure and enhance asset performance. Performance optimisation is delivered through
internal processes designed to effectively identify, explore and control business opportunities and risks.

• Business Planning: The Investments Exec agrees an SDM (Strategic Deployment Matrix)
at the commencement of each year which identifies the common aims and objectives for the
business including growth and protection of the underlying PFI/PPP assets. The SDM
incorporates specific delivery plans and agreed ownership and is implemented by functional
sponsors to ensure that there are properly costed plans with controlled activity and
appropriate monitoring to ensure aspirations are met.

• Opportunities Dialogues: The Monthly Dashboard produced by GMs for each PFI/PPP
highlights business development opportunities within the GM’s sphere of influence. The IMS
Director reviews and discusses the content of the Dashboards and makes internal and
external connections to drive forward business activity to crystallise opportunities.

• Modelling Reviews: The semesterly Financial Model updates for Lenders covenants
reporting dictates an engagement timeline for the IMS team to examine financial forecasts
for the PFI/PPP assets alongside in-house specialist financial modelling resources with the
experience and expertise in identifying opportunities that have shareholder return
optimisation potential such as re-fi, accelerated sub debt repayment and Lifecycle release.

KPIs measurement and monitoring

The key KPIs for the IMS business relate to service performance timeliness, specifically:

• Board Reporting: Board packs comprising the General Management, Finance Pack and
ancillary information are required to be despatched a minimum of 7 working days before the
Board Meeting in order to allow sufficient time for Board members to read and digest the
information. Board Pack despatch is coordinated by Amey Company Secretary and by
exception, any service standard performance failures in respect of the timing of despatch
along with mitigating circumstances, if any are notified to the Head of Finance and IMS
Director. A log of any performance failures is maintained in order to generate statistical
compliance information for quarterly management review and action as necessary

• Distributions: The shareholders rely on predictable and timely distributions of interest on
shareholder loans and any dividends. IMS aims both to maximise and speed the turnaround
of Lenders consent for distributions. To facilitate the process a Distributions Tracker is
created in each of March and September to determine the planned timelines for each Model
update and approval to cover each stage of internal and external review and approval
required. The Finance team monitors achievement of activity timelines and provides a
weekly status report to the Exec in April and October to provide the impetus for successful
and timely distributions conclusion and an escalation route if necessary

• Statutory Reporting: Late filing of financial accounts and corporation tax returns results in
financial SPC financial penalties. The Finance team plans and organises its required liaison
with external advisers to deliver approved signed accounts and completed tax returns that
meet deadlines. To facilitate the process and ensure all parties are kept appropriately
engaged and informed, the Finance Team maintains and monitors progress against an Audit
tracker to drive delivery. A log of any financial penalties incurred, and any contributory
factors is maintained for consideration by the Exec and in order to identify continuous
improvement initiatives.

Investment Management Service Operating Model | November 2019 28

4 People Management

4.a Our People

We work within a strong Amey compliance framework with a mind-set of continuous improvement and
we always have asset and project optimisation in mind. Our values – being driven, collaborative and
having a win-win mentality – guide our approach.

We’re flexible and we often bring sector experts and interim managers into the team for different
periods of time and in some cases to become long-term employees. It is important for the core team
members to be flexible, enabling them to move from being a lead to a supporter of any new specialist
manager.

Our team has a strong social conscience. We know that our work directly impacts people’s lives so we
ask what social value is created in communities where we manage and maintain infrastructure. We’re
driven to do good.

People Development
Investments Continuous Development Programme - Our structured people development
programme is bespoke to our team and is an in-house development initiative built around the core
skills needed by Amey Investments to achieve our business ambitions. We call the programme the
Investments Continuous Development Programme (ICDP). Everyone who goes through the ICPD
receives upskilling and training on customer relationships & business growth, financial acumen,
leadership and goal-setting, commercial acumen, health and safety and reporting & communications,
amongst other things. We are proud that our ICDP has been recognised outside of the business and
was nominated and shortlisted as a finalist in the recent Training Excellence Awards with Construction
News Awards. An example of our Investment Continuous Development Programme is contained in
Appendix 5.25.

Link to 5. Appendices\5.25 People Management

Strategic People Board
Twice a year our Senior Team meet to undertake a “Strategic People Board”. During this meeting
each individual within the team is reviewed by re-looking at their “Talent Dashboard which includes
things like, Performance Development Review called an appraisal, their Talent Management Review (9
Box Grid Rating), their ICDP attendance record along with their Development Plan and future ICDP
nominations as well as their Competency Skills Assessment Matrix. This enables the Senior team to
consider how best to support individuals and adjust their Organisational Design to be fit for future, as
well as calibrating across the entire team for fairness.

This also provides the senior managers with the opportunity to consider secondment opportunities
and to reflect on pay and re-numeration of individuals.as well as promotional opportunities that may
arise. You can see a copy of the Talent Dashboard in Appendix 5.25.

Link to:5. Appendices\5.25 People Management

Performance Development Reviews
We support everyone in our team to achieve their full potential, to deliver exemplary service to our
Customers and to bring their whole selves to work. We’re achieving this through a culture,
underpinned by our values – caring, collaborative, creative, driven, brave, win win-minded and radical.

We conduct annual appraisals which provide each individual with key performance indicators and
individual & Business objectives to achieve each year. These are directly aligned to our Strategic
Development Matrix (see section 3biA) and to our Amey Investments Business Objectives to ensure
business performance remains high. You can see a copy of our current SDM in Appendix 5.25.

Link to 5. Appendices\5.25 People Management

Investment Management Service Operating Model | November 2019 29

Resource Management & Organisational Structure/Design

Each person’s job role has its own job description and falls within a Career Path Framework which
shows potential progression through the hierarchy of their careers. This also directly links to their pay
and benefits. We have a competitive package including base salary, attending the ICDP, a non-
contractual bonus scheme, car allowance, private health care, holiday entitlement, pension scheme,
Amey employee rewards scheme, and professional membership allowance.

We are also able to draw from an extended network of freelance professionals that we can use for ad
hoc projects and via our regular meetings we review workload and priorities monthly and assess any
resourcing constraints. However, our overall objective is to seek to stretch and upskill our existing
team to deliver additional requirements as this complement’s professional development, improves in
house skills, supports our retention strategy and keeps cost control focus.

Competency Skills Assessment

An additional tool we use are the Competencies Skills Assessments. This is discussed on an individual
basis with all staff. The Competency Matrix consists of a set of eight competencies, including:
Relationships, Problem Solving, Reporting & Communication, Leadership & Goal Setting, Health &
Safety, Business Growth, Commercial Acumen and Financial Acumen. These competencies are
determined to be essential to business success and are personalised for each IMS role. Each individual
is assessed for development with a RAG (Red, Amber, Green) status. Exceptional staff also complete a
Career Development Plan. All of these tools are used to inform the 9 Box Grid. See Appendix 5.25 for
a copy of IMS Competency Framework.

Link to 5. Appendices\5.25 People Management

Employee Survey
On a yearly basis we undertake an employee survey which gathers individual employee’s views on a
number of questions relating to their views on the business, their managers, their colleagues, their
opportunities, their training and pay and conditions amongst other things. Those views are then used to
improve employee satisfaction and share best practice amongst teams who are excelling in certain areas.

For example, the results from the most recent survey scored higher than the Amey average in nearly
all categories. Including: 82% of employee survey respondents stating that they receive enough
training to do their job well. And 84% of people stating they are aware of training capabilities
available to them. 100% of respondents stated that they take responsibility for following health &
safety rules. 94% stated that their team never compromises health and safety to get the job done.
And 98% stated that Amey takes health & safety in the workplace seriously. See Appendix 5.25 for
the ICDP Presentation with extracts from the employee survey results.

Link to 5. Appendices\5.25 People Management

Figure 7 Strategic Partnerships

We have a deep understanding of the operational delivery of services such as waste or highways
management, and we can make sure that financing arrangements we help put in place are right.

Investment Management Service Operating Model | November 2019 30

We stand out from the competition by providing efficient funding, business development and strategic
solutions that save our Customers’ and Clients' money and increase the value of our services.

Investment Management Service Operating Model | November 2019 31

5 Appendices 32

5.1 Team Biographies
5.2 General Authorities Schedule
5.3 Health and Safety
5.4 Customer Satisfaction
5.5 SDM
5.6 Project Dashboard
5.7 SPC Manual
5.8 MSA Protocol
5.9 Finance Manual
5.10 Financial Model
5.11 Statutory Account Tracker
5.12 Distribution Tracker
5.13 Matrix of Meetings
5.14 Project Calendar
5.15 Correspondence Log
5.16 Risk Management
5.17 Event of Default
5.18 Briefing Papers
5.19 Compliance Assurance
5.20 Shared Drive Management
5.21 General Management Report
5.22 Variation Management
5.23 Project Plan
5.24 Terms of Reference for Strategic Partnership Board
5.25 People Management

Investment Management Service Operating Model | November 2019


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