®
Annual Report & Accounts
year ending 31 March 2019
Company Registration Number 01892751
Strategic report
Headlines
D4t4 Solutions plc Annual Report & Accounts 2019
Revenue
(£m)
2019
GP margin
(%)
25.24
2019
2018 restated*
18.43
2018 restated*
2017
2016
17.67
2017
18.61
2016
49.52
S
t
r
a
t
e
g
c
i
r
e
p
o
r
t
56.69
56.66
55.82
Up by £6.81m
Up by 0.03%
Adjusted profit before tax **
(£m)
Adjusted diluted EPS **
(pence)
2019
6.02
2019
13.89
2018 restated*
4.07
2018 restated*
8.82
2017
2016
4.22
3.50
2017
2016
9.97
8.24
Strategic Report
01 Headlines
Corporate governance
Financial statements
32 Board of Directors
59
Independent auditors report
02 Statement by the Chairman
34 Chairman’s introduction
62 Consolidated income statement
04 Statement by the CEO
to governance
63 Consolidated statement of changes
08 What we do
14 Vision & strategy
16 Our challenges
18 Business model
20 Our intellectual property
24 Growth plan
26 Key performance indicators
28 Principal risks and uncertainties
31 Corporate social responsibility
and sustainability
35 Statement of corporate governance
in equity
46 Audit Committee report
64 Consolidated statement of
Up by £1.95m
Up by 5.07p
47 Nomination Committee report
48 Remuneration Committee report
49 Directors’ remuneration report
54 Directors’ report
58 Statement of Directors’
responsibilities
financial position
65 Consolidated cash flow statement
66 Company statement of changes
in equity
67 Company statement of
financial position
68 Company cash flow statement
69 Notes to the financial statements
100 Corporate information
* Restated due to application of IFRS 15 as outlined in note 30.
** Before amortisation of intangibles, share based payments charges and foreign exchange
gains/(losses) as per note 13 on page 82.
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Strategic report
Statement by the Chairman
“Our focus on the financial services industry, higher levels of
brand awareness from industry analysts and demonstrable
return on investment by organisations with high levels of
data maturity have all contributed to a very successful year
with revenue growth of 37% compared to last year.”
Dear Shareholder
I am delighted to deliver this Annual Financial Report
Achievements and Strategic Outlook
We continue to hone our strategic direction and have
increased our focus on specific target accounts within
the top 500 global financial services organisations and
large consumer facing organisations with high levels
of data and a strong track record in using that data for
commercial advantage.
Work continues to broaden our network of strategic
partners and to deepen relationships globally with our
existing partners. We have also expanded our global
sales and support coverage. The results of this activity
are now being realised with increasing numbers of new
opportunities forming the new business pipeline.
A review of the segmental reporting used within the
business has improved visibility for both our management
for 2018/19.
It has been another excellent year for D4t4 with strong
growth in revenues and profitability, delivering overall
results slightly ahead of market expectations and with very
good progress achieved against the key areas of strategic
focus for the future.
It was pleasing to see the phasing of revenues return to
a more normal distribution between H1 and H2 and the
nature of the product and services revenue has given the
Board greater visibility of order pipeline throughout the year.
Our data collection product, Celebrus, continues to evolve
and now provides one of the best real time omnichannel
CDPs (customer data platforms). Our focus on the financial
services industry, higher levels of brand awareness from
industry analysts and demonstrable return on investment
by organisations with high levels of data maturity have all
contributed to a very successful year with revenue growth
of 37% compared to last year’s restated revenue.
Highly targeted business development focussed
around partners who work with global financial services
organisations has seen demand for our hybrid cloud
data platform services grow significantly during the
People
Current Trading & Outlook
At 31 March 2019 the Group employed a total of 125 staff
The new financial year is trading in line with the Board’s
in its operations located in India, EMEA and the USA. Our
expectations which together with a healthy level of new
people are vital to our success and we will continue to
business opportunities in our pipeline, leads us to be
build upon our Company culture with its high levels of staff
confident for the year ahead.
engagement with a focus on people development, retention
and recruitment of the highest calibre people.
I am excited about the prospects we have to develop our
business further and, for the future, we have clear plans for
2018/19 has been another successful year and it is
further organic growth, and growth of our existing
testament to our team that we have once again delivered
customer relationships.
such a strong performance.
Looking forward there are many opportunities to continue
On behalf of the Board and all our stakeholders I would
our growth in our core markets where we expect to
like to thank all our people for being so passionate in their
develop our business with existing and new customers,
efforts and for their contribution to our Company and in
increase our share of current markets and continue to
helping turn D4t4’s vision into action.
expand internationally.
Board and Corporate Governance
We have also increased the level of focus and activity
On behalf of the Board I would like to express thanks to
to search out potential value enhancing acquisitions
Roger McDowell who retired from the Board on 31 March
with particular emphasis on opportunities to accelerate
2019 after eleven years as a Non-Executive Director.
international expansion and add adjacent or
Roger has been closely involved in the development of
complementary products.
the business over this period and his contribution greatly
benefitted the business.
We look forward to keeping you up to date on progress
during what looks to be a very interesting and
I am delighted that Peter Whiting joined the Board as
profitable year.
a Non-Executive Director in July 2018. Peter brings a
wealth of relevant experience including working in Equities
Research at UBS and more recently as a board member at
a number of quoted companies.
I would also like to express our gratitude to CFO Carmel
Warren who is leaving the Company this summer. Carmel
has made a significant contribution to the growth in value
Peter Simmonds
Non-Executive Chairman
24 June 2019
teams and our investors. This has given us the opportunity
of the Company and has been a key member of the Board
to show more accurately the level of our own IP (intellectual
bringing insight, clarity and direction. We hope to be in a
property) sales within the business and to better explain the
position to announce her successor in the near future.
nature of the larger contracts delivered to clients.
In the areas of security and compliance we passed our
ISO 27001 audit and finalised our compliance with the
new GDPR (General Data Protection Regulation) standards
introduced during 2018.
In September we carried out a Board effectiveness
exercise. This showed no major areas of weakness
although the process highlighted a number of areas
for continuous improvement including communication
between Board Committees and Executive Directors.
year and levels of client satisfaction from successful
We continue to invest in product innovation and customer
implementations remains reassuringly high, with a strong
satisfaction as well as extending our sales, marketing and
pipeline of future work and a growing level of recurring and
consulting capabilities.
repeat revenues from existing clients.
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report Strategic report
Statement by the Chief Executive Officer
“As a business, we have successfully grown both top line
revenue and profits over the comparable year and it is
pleasing to witness that the Group has achieved notable
sales success in North America following our recent sales
and marketing investment in the region”
Introduction
I am pleased to present to all stakeholders our Strategic
and Financial Report for the year ended 31 March 2019,
which records another strong year of profitable growth for
the Group and culminated in the signing of a number of
international contracts, some that benefited the 2018/19
year and some that will benefit 2019/20 and beyond (see
RNS release dated 26 March 2019) - more details below.
As a business we have successfully grown both top line
revenue and profits over the previous year and it is
pleasing to report that the Group has achieved notable
sales success for our Celebrus software product with
both Perpetual Licence and Annual Recurring Revenue
licence sales.
This pleasing performance stems from the effectiveness of
the Group’s investment programme into our core products
for both data capture (with the release of Celebrus v9 and
its successful implementation on behalf of our clients) and
in our hybrid cloud data platform service business, which
provides a scalable platform to allow our clients to focus on
understanding their customers’ behaviour better, calculate
risk and ensure regulatory compliance.
Overview
D4t4 has made great progress with the continuous
investment in our international regions both from adding
people in those regions to provide functions such as
project management, consultancy and support to
our clients, whilst at the same time investing in and
strengthening relationships with strategic partners.
We have continued to build on our previously stated
strategic objectives of empowering our clients to gain
significant value from their customer data and through this
to deliver major uplifts in terms of their revenues
and profitability.
As a result, I am delighted to report a 37% increase in
top-line growth with total revenues for the Group rising to
£25.24m (2018 restated: £18.43m).
Importantly, we have been able to maintain gross profit
margin levels through a combination of our own intellectual
property sales, our hybrid cloud data platform, our
delivery services business and our recurring revenue
business, which has resulted in a 48% growth in underlying
profitability yielding an adjusted pre-tax profit for the Group
of £6.02m (2018 restated: £4.07m).
During the year in review we implemented IFRS15 which
had a one-time effect on our 2017/18 and 2018/19 results.
We have included a chart below to show that one-time
effect on the Group’s results.
As previously
reported
IFRS15 Restated
31.3.2018 Adjustment 31.3.2018
£m
£m
£m
Revenue
Cost of Sales
Gross Profit
Adjusted Profit
before tax
20.09
(8.57)
11.52
(1.66)
0.58
(1.08)
18.43
(7.99)
10.44
5.15
(1.08)
4.07
Basic EPS
9.90p
Adjusted basic EPS
11.49p
Diluted EPS
9.49p
Adjusted diluted EPS
11.01p
7.62p
9.21p
7.30p
8.82p
During the year we also changed our business reporting
This, in addition to forming further strategic alliances and
categories to more clearly explain the makeup of our
partnerships, will enable us to continue to expand our client
business. This has been well received by investors and
base within this region.
analysts at the half year results and shows the value of our
intellectual property to the business (see note 4, page 75).
Our strategic partnerships remain a major focus for our
business and we recognise that the geographical reach
Our clients continue to operate in markets where, in many
and business diversity that our partners bring to us is key
cases, the only differentiation that they have from their
to our own future growth. During the year under review we
competitors is how well they understand and interact
have successfully continued to promote and enhance our
with their customers and how quickly they can capitalise
relationships with Teradata, SAS, Microsoft, Pegasystems
on that customer interaction. This, coupled with a
and Adobe both directly and via their partners.
challenging market environment characterised by legislative
uncertainties, and increased (and ever increasing) regulatory
demands, for example GDPR, and in the financial markets –
CCAR, CECL and IFRS 17 (Insurance Contracts) - is driving
increasing demand for more scalable and cost-effective,
compliant data collection and analytical platforms.
New customer wins in the UK, mainland Europe, the Pacific
Rim and North America were represented across our
targeted industry segments including banking, insurance,
and consumer facing organisations, and our “land and
expand” methodology for sales continues to enjoy a high
level of success with an increasing proportion of our client
base now using our Celebrus product set.
The North American market contributed greatly to new
sales in 2018/19 following last year’s further investment
in the North American team. This important market
continues to provide a large opportunity for the complete
D4t4 product offering and we will continue to invest in the
relevant expertise in line with and, in some cases, ahead
of sales growth. Europe also featured strongly in our mix of
sales with new sales in both banking and insurance.
Summary review of the year ended 31 March 2019
D4t4 has had another highly successful financial year.
Our business delivered revenues of £25.24m (2018
restated: £18.43m) producing an adjusted profit before
tax of £6.02m (2018 restated: £4.07m) see page 6, with
a statutory profit before tax of £6.34m (2018 restated:
£3.33m). The Group remains strongly cash generative and
net cash reserves were at £11.00m compared to £3.85m
the previous year (net cash is gross cash less any loans).
The more even phasing of H1/H2 revenues resulted in trade
debtors at the year-end returning to more normal levels
than the previous at £4.06m (2018 restated: £19.53m).
The last twelve months have seen an acceleration of the
evolution of our business into the data platform software
and services market space with continued focus on
growing both our Celebrus software Customer Data
Platform base and our hybrid cloud data platform services
sales, which in turn contribute to our Own IP, recurring and
delivery services revenues.
As we have indicated earlier, we have invested in our
partner, sales and pre-sales teams, particularly in North
America, the outcome of which we are pleased to report is
the winning of several significant contracts with both new
“Our strategy continues to deliver and is reflected in our strong overall growth. At the
same time, we continue to innovate our product, grow geographically and deepen
our relationships with our strategic partners. The business enters the new financial
year in robust shape after closing a number of significant contracts in the second half
year. These contracts will have an impact on 2018/19 and on subsequent years, and
we are encouraged by the opportunities and outlook for the business in the coming
year. Consequently, as a Board we are confident of delivering results in line with
expectations for the financial year ending March 2020.”
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Strategic report
Statement by the Chief Executive Officer (continued)
and existing clients. We have also invested in our partner-based sales strategy and in 2019/20 we will continue to scale up
these relationships which will reap rewards in both this coming year and in the future.
During the last 12 months we have seen a shift in the mix of sales within the Group.
Firstly, through the growth in the demand for term or recurring licence sales of our Celebrus product set which had an
impact on the perpetual licence sales that we have enjoyed in the past. This has had the beneficial effect of increasing our
visibility of future revenues.
Secondly, we have seen an increase in demand for our hybrid cloud data platform services which have developed well in the
year, particularly in the North American market. As with our Celebrus sales we are beginning to see customer demand for
the provision of our cloud data platform to be delivered as a “Platform as a Service” (PaaS), recurring revenue styled service.
Our own intellectual property product revenues have increased in the year under review to £9.20m (2018 restated: £6.81m)
driven by the increase in sales of both our Celebrus customer data platform and our hybrid cloud data platform.
Our 3rd party product revenues also increased as a result of the increase in sales from our hybrid cloud data platform
business and finished the year at £7.35m (2018 restated: £3.92m).
Delivery services revenues enjoyed good growth and are underpinned by the increase in sales of our own intellectual
property products which resulted in revenues of £3.13m (2018 restated: £2.93m).
Recurring revenues from our managed service and software licence support and maintenance service enjoyed strong
growth and delivered income of £5.56m (2018 restated: £4.78m). This marks a return to double digit growth as a result of
completing the transition from our old Systems Integration business model to our newer data and analytics business model.
As mentioned above, this steady growth in performance was due in part to the increase in our Celebrus software revenues
and hybrid cloud data platform sales during the year.
Revenue (new split)
Products - Own IP
Products - 3rd Party
Delivery Services
Support & Maintenance
Revenue (old split)
Licence sales
Projects
Recurring income
Gross profit
GP margin
Profit before tax
Adjusted profit before tax *
Basic EPS
Adjusted basic EPS
Diluted EPS
Adjusted diluted EPS
Dividend for the year
Net cash position **
2019
£9.20m
£7.35m
£3.13m
£5.56m
£25.24m
£4.13m
£15.55m
£5.56m
£25.24m
£14.31m
56.69%
£6.34m
£6.02m
14.78p
14.12p
14.53p
13.89p
3.00p
£11.00m
Restated
2018
£6.81m
£3.92m
£2.93m
£4.78m
£18.43m
£2.91m
£10.74m
£4.78m
£18.43m
£10.44m
56.66%
£3.33m
£4.07m
7.62p
9.21p
7.30p
8.82p
2.50p
Year on year
growth
35.16%
87.68%
7.02%
16.35%
36.97%
42.18%
44.74%
16.32%
36.97%
37.04%
0.05%
90.70%
47.84%
93.96%
53.31%
99.04%
57.48%
20.00%
£3.85m
185.27%
* Before amortisation of intangibles, share based payments charges and foreign exchange gains as per note 6 on page 79.
** Net cash is gross cash less outstanding borrowings.
Gross profit in the year was £14.31m (2018 restated:
I personally would like to welcome all new joiners to the
£10.44m) whilst statutory profit before tax for the period
business and to thank everyone for their contribution to
was £6.34m (2018 restated: £3.33m). Administration costs
another successful year, during which our people have
were £8.02m (2018 restated: £7.15m) due in part to staff
demonstrated outstanding efforts and commitment to ensure
cost increases (see page 80). Adjusted profit for the year
that our clients and their customers receive the maximum
before tax is £6.02m (2018 restated: £4.07m). This includes
benefit from the products and services that we supply.
a foreign exchange gain for the year of £0.73m (2018:
£0.40m loss), the gain being due primarily to the significant
shift in the US Dollar exchange rate early in the year.
Outlook
As documented in our trading update released in April,
during the last quarter of the year under review we signed
Trade and other receivables at the year-end were £6.28m
a number of significant contracts, some of which were
(2018: £20.54m), due to the more normal timing of
recognised during the year in review and others that will be
contracts.
recognised during 2019/20 and beyond.
Cash and cash equivalents at 31 March 2019 stood at
This gives us an excellent start to the current year and
£11.00m (2018: £4.63m). Total net assets at the end of the
when combined with a growing opportunity pipeline the
year were £24.84m (2018 restated: £20.11m).
Board remains confident in the future of the business and
Adjusted fully diluted earnings per share grew 57.48%
to 13.89 pence (2018: 8.82 pence), diluted earnings per
share were 14.53 pence (2018: 7.30 pence) which was up
believes that it has a clear strategy in place to develop
the opportunities that will deliver sustainable growth and
enable us to achieve our plans for the year ahead.
99.04%. This was attributable not only to the underlying
I really hope that you enjoy reading about D4t4 in this
growth in the business but also the IFRS 15 adjustment
Annual Report and I look forward to keeping you updated
and the low effective tax rate for this year (see note 10).
on our business and contract wins throughout the
Dividend
forthcoming year.
Peter Kear
Chief Executive Officer
24 June 2019
As stakeholders are aware, the Company remains
committed to a progressive dividend policy whilst
balancing its investments for future growth. It is the Board’s
intention to declare future dividends based on the overall
Company performance.
The Board is recommending a final dividend of 2.3p (2018
restated: 1.875p) which, if approved by shareholders at
the Annual General Meeting, which is to be held on the
22 August 2019, will be paid on 13 September 2019 to
Members on the Register at the close of business on 9
August 2019. The Ordinary shares become ex-dividend on
8 August 2019.
People
2018-19 has been a very successful year for the Group,
which of course is made up of a great many team and
individual successes. This is a testament to the hard work,
expertise and professionalism of the D4t4 team.
At the end of March 2019, the Group employed 125 staff
in its operations located in India, EMEA and North America
(March 2018: 128 staff).
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Strategic report
What we do: A client example
Supporting DNB become a data driven bank
DNB is Norway’s leading financial services provider – not just in regard to size, but also with its progressive digital
transformation program; with over 2.1m retail customers and 221,000 corporate customers.
Digitalisation has brought explosive growth in data, bringing
that as a principle, he asks. “The ethical use of data will be
new challenges and opportunities to the business. For
a strategic differentiator for banks of the future”.
DNB the imperative is, and will always be, to stay relevant
to customers in their daily digital lives. “Our customers are
talking to us every second of the day on digital channels,
and we have to have the ability to listen and respond
effectively to their needs,” says Aidan Millar, Chief Data
Officer at DNB. This is the challenge of digitalisation that
he believes is too often overlooked. “Everyone talks about
going digital, but if you’re not capitalising on data streams
that are generated through your digital channels, then
you’re going digital without listening. My role is to leverage
digital interaction data to reconnect and stay relevant to our
customers on digital channels.”
“We’re looking at digital channel
interaction data to assess customer
journeys on our digital channels
using a leading-edge digital capture
solution, provided by D4t4 Solutions”
The data itself is managed within DNB’s multi cloud
solution, whereby both Amazon Web Services (AWS)
and Microsoft Azure have been leveraged as the bank
migrates onto scalable and adaptable cloud platforms. The
Millar is deeply passionate about handling data in a legally
cornerstone of DNB enterprise data and analytics platform,
compliant and ethical way. “We’ve got to be seen as the
Millar says, has been the establishment of DNB’s advanced
trusted data custodian that capitalises on data driven
cloud-based data science laboratory which provides the
insights to deliver value for our customers, and we’ve
analytics capability and the technical scalability required
got to do this in an ethical and compliant way.” The DNB
to process the massive volumes of data in near real
transformation to a data driven organisation is underpinned
time. “Traditionally, most big banks went with one data
by a focus on the ethical and compliant use of data.
vendor, but that didn’t enable them to leverage the niche
“Regulations are often seen as a burden and should be
capabilities of multiple partners.” DNB has taken a different
reframed as best practice, but why wouldn’t you want to
route, bringing in the flexible, best of breed solutions
be compliant with best practice?” says Millar. The General
including Celebrus from D4t4 for leading edge tagless
Data Protection Regulation (GDPR) is about protecting
digital channel capture.
customer data and data rights, who would disagree with
About DNB
DNB is Norway’s largest financial services group and one of the largest in the Nordic
region in terms of market capitalization. The Group offers a full range of financial services,
including loans, savings, advisory services, insurance and pension products for retail and
corporate customers. DNB’s bank branches in Norway, in-store postal and banking outlets,
Post office counters, Internet banking, mobile services and international offices ensure that
they are present where their customers are.
All of this advanced technology, and the work involved in
reconnecting with customers, not only to deliver added
implementing it, ultimately builds customer-centricity. One
value but also to generate impactful insights to steer
area that has benefited is the continued development of
strategy effectively, is bolstered by Millar’s unerring
DNB’s online and mobile digital services. “We’re looking
dedication to maintaining DNB’s reputation as a trusted
at digital channel interaction data to assess customer
data custodian. As the bank’s customers continue to
journeys on our digital channels using a leading-edge
transition to its digital offerings, it is certainly positioned
digital capture solution, provided by Celebrus D4t4”, Millar
to continue with its powerful and successful data driven
explains. “We can assess whether our digital channels
digital transformation journey while reinforcing its admirable
are aligned to customer preferences and continuously
corporate values of a trusted service provider.
improve the digital experience.” The platforms can also
be optimised to deliver highly tailored digital offerings to
meet anticipated customer needs and wants, he says. “Our
analytics capabilities are focused on meeting delivering the
right product, at the right price, through the right channel,
at the right time,” says Millar.
Through the application of data and advanced technologies
to optimise both internal efficiency and the customer
experience, DNB is well on its way to maximising the
value of the bank’s digital transformation. The focus on
KEY FACTS
221,000
Corporate customers
269m
Payment transactions in 2018
2.1m
Personal customers
1.3m
Internet banking users
869,000
Mobile banking users
8
*This article first appeared in Fintech magazine, May 2019
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report Strategic report
Powering the fintech artificial intelligence revolution
Financial technology, often shortened to fintech, is the technology and innovation that aims to compete with traditional
The chart to the right shows both the expected growth in the
Impact of market evolution and growth
financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities
market and the probable shift in the type of client, technology
in finance.
In 2018 the awareness of the power and potential of artificial intelligence (AI) within this arena became far more widely
recognised as new developments received much greater media coverage. This awareness is now triggering changes to the
global marketplace and accelerating growth around the world; this is a trend the Board of D4t4 expects to continue.
As AI becomes more widely understood and practical uses begin to multiply the Board of D4t4 expect that customers will
become ever more aware of the need for better quality data to power algorithms. The oldest adage in the data world is
“garbage in = garbage out”; this has never been a more appropriate piece of advice and will power customer investment for
many years to come. To counter this challenge organisations will have to make significant investment and within this report
we will detail what we consider to be the opportunity.
Dynamic growing market
D4t4 Solutions operates within the fast-growing ‘big data’,
Current Market Size
artificial intelligence, machine learning and the business
100
intelligence market. This market which has been estimated to
be valued at US$189 billion by the global independent analyst
International Data Corporation (IDC), with a projected growth
of 13.2% annually until 2022 at which point it is anticipated the
market could be worth US$274 billion.
The specific areas of focus for D4t4 are data and analytics
related to the collection of data on how consumers
interact with digital channels such as websites and
apps, the management and analysis of that data and the
implementation of cost effective technology platforms to
enable companies to get real value from their data assets.
“Growing in a rapidly expanding niche market”
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Europe
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source: IDC
Celebrus, our main software product, is a customer data
Countries where Celebrus is implemented
platform (CDP), that is in a rapidly expanding niche market
according to independent research carried out by the
Customer Data Platform Institute (CDPI). This niche area is
expected to grow from £300m in 2016 to £1bn in 2019. The
charts to the right illustrate geographic spread of Celebrus
clients today.
As organisations evolve their analytical capabilities and
extend the use of data throughout the business the need for
better data, delivered faster at lower cost grows. Typically, it
takes 5-7 years for organisations to develop from basic data
and analytics capabilities to a more advanced level; it is at
this more advanced level that D4t4 excels.
and tools that is anticipated over the coming four years.
The total market D4t4 seeks to address is predicted to grow
significantly faster than the market in general.
The market opportunity for D4t4 Solutions
There is a growing number of mature data and analytics
companies that understand the value of data, have data
deeply baked into the organisation and require the specialist
tools backed by higher margin services supplied by D4t4.
This is a major growth driver of the business.
Industry sectors
D4t4 is focused on the finance and consumer sectors. This
emphasis allows the business to build a deep understanding
of the core sectors and more effectively design, sell and
deliver software and services.
D4t4 Solutions is at the heart of the
fintech revolution
Financial technology (Fintech) companies consist of new
companies and established technology companies trying
to replace or enhance the usage of financial services
provided by existing financial companies. Many existing
financial institutions are implementing fintech solutions and
technologies in order to improve and develop their services,
as well as gaining an improved competitive stance.
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s
E
Total market for
all D4t4 products
& services
Low data &
analytics maturity
2018
2023
source: IDC, Gartner
% sales by sector
11%
12%
7%
9%
77%
84%
2018
2019
Finance
Consumer
Other
The finance sector remains very attractive because of the potential disruption from fintech companies, its global nature, the
number of clients undergoing transformation programmes and, the financial health of the sector.
There remains considerable scope for growth within the financial services sector across the globe. The deep knowledge of
the sector D4t4 has is a key enabler.
D4t4 Solutions has growth potential in the consumer sector
The consumer sector encompasses all those businesses that interact directly with large numbers of consumers, including
e-commerce, travel, telecoms and automotive organisations. The large data volumes, increasing concerns about privacy,
data security and data sharing make this a vibrant area on which D4t4 can focus.
Therefore, the consumer sector is an area for future expansion, and the experience the Company is gaining today will
enable growth in this area in the future.
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Geographic reach
Sales by region compared to market
Key new trends
D4t4 Sales %
Market %
The market for data technologies and services is developing rapidly. Trends such as the drive amongst businesses to derive
competitive advantage from data, the move to cloud computing, the arrival of hybrid cloud architecture and the rise of open
source analytical software are now well established and expected to continue. Each year new trends emerge that cause the
leadership of D4t4 to reflect on the business, its strategy and the tactics being used.
D4t4 is aware of these key trends and takes them into account when devising strategy and tactics to deliver growth. The
market trends are also a core part of the strategy and business model reviews which take place annually or as required.
The market for data solutions is global and D4t4 has the
working process, skills and people to serve clients wherever
they may be around the world.
The largest global market is the USA and currently this is
where the majority of D4t4 sales are made.
The Geographic opportunity
The Company plan is to continue the US investment strategy
as it is the single largest market for data and analytics. With a
faster growth trajectory and nearly the market size of Europe,
D4t4 will look at expanding its presence in the Asian region.
Regulatory environment
The clients and the areas of the market D4t4 operates within
are impacted by regulatory and accounting framework
80%
60%
40%
20%
0%
United
States
Western
Europe
Asia/Pacific
region
UK
changes. Regulations such as Comprehensive Capital Analysis and Review and the Current Expected Credit Loss
framework drive additional demand within the financial services sector.
Regulations like GDPR and the proposed European e-Privacy Regulation together with the California Consumer Privacy Act
have an impact on software development and sales, this can be positive or negative depending on the final shape they take.
A selection of the regulations that impact D4t4 clients and which our software and solutions have to take into account
PIPEDA
HIPPA
CalOPPA
CCPA
LGPD
PoPI
The regulatory opportunity
GDPR
Chinese Cybersecurity Law
Indian Information Technology
Acts 2000 and 2011
APP
New Zealand Privacy Act 1993
Four trends are currently of significant interest to the business
1. Streaming data and analytics applications are starting to become more prevalent; for example,
D4t4 has clients that use behavioural data collected by Celebrus to detect application fraud the
moment the fraudster starts to interact with the application form on a website. These applications
typically require data collection, processing and
decision making to happen within milliseconds
and to have very high availability. These
applications, often in fraud and risk could
create new opportunities for D4t4.
4. Platform as a service
(PaaS) is an area that has
been in existence for some
time as evidenced by the
growth in cloud computing.
The new trend that D4t4
is exploring is the growth
Streaming data
& analytics
applications
2. Democratisation of data is a trend that
sees more data access and tools pushed
out into the hands of the business
user. It is a welcome trend as it
ensures organisations get
more value from their
Platform as
a service
(PaaS)
Democratisation
of data
data, however, it also
increases workload
and drives demand
for more scalable and
robust data platforms.
of private platforms delivered
on appliances within the client’s
own data centre. The client buys their
analytics platform as a service, rather
than as a capital purchase, with the vendor
Automated
AI / ML
platforms
3. Automated artificial
intelligence and machine
learning platforms are now
coming to market at pace, promising
to simplify the creation and deployment
taking full responsibility for implementation and
of models based upon artificial intelligence
operation of the platform. This is an opportunity that
and machine learning. The arrival of these tools
the management of D4t4 is actively exploring as this
may create new opportunities to partner, create data
The ever-expanding number of regulations drives organisations to spend money on enhancing control over their existing
trend would reduce the sometimes variable phasing of
connectors or to operationalise models within our
data and investing to ensure that value is created from it. This is a positive trend for D4t4, and unless there is a backlash
D4t4 revenues, replacing them with a more predictable
customer data platform, Celebrus.
against data collection it will continue.
revenue flow.
“D4t4 Solutions operates in a dynamic and fast-growing market
that has many opportunities for growth and value creation”
Peter Kear, CEO
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report Strategic report
Vision & strategy
Our vision
Our tactics
Our business vision is to create an innovative and steadily growing business that earns high margin, recurring revenues
This strategy will be executed by evolving our business based upon our core values of innovation, trust, collaboration and
by creating market leading data platform software and building data platform solutions that financial services institutions
security and, by growing or enhancing the required core capabilities of data capture, data platforms, data management and
and consumer focused organisations need to power their AI, advanced analytics, compliance, fraud, risk, marketing and
data analytics. We have depth of expertise and wide connections within the financial services and consumer sectors, and to
customer experience initiatives.
Our strategy
deliver on our strategy we focus on these sectors above all others.
To deliver the vision our strategy is to focus our activity on two complementary areas that financial services and consumer
organisations are investing in today and expected to continue to invest in for the foreseeable future:
Our integrated core services
1
2
Increasing revenues derived from our customer data platform, Celebrus, which generates
high margin sales in the short term as well as building a longer term recurring revenue stream
and creating platform opportunities.
Generating recurring income through developing, deploying and managing ‘big data’
platforms that combine the intellectual property, services, software and hardware
needed to help our clients get strategic advantage from their data by deploying artificial
intelligence and advanced analytics as well as meeting stringent regulatory requirements.
“Our strategy is constant and we are relentlessly
focussed on execution”
Peter Kear, CEO
Data Capture
Collecting data from all consumer touchpoints, using our patented
customer data platform software, to create behaviour profiles and then
transferring data in real-time to personalisation, risk, fraud,
artificial intelligence and analytics systems.
Data Management
Flexible management
services for data platforms
including hosting, private
cloud, public cloud and
application management
with an emphasis
on secure,
high-performance and
mission critical systems.
Data
Capture
Data
Management
Data
Platforms
Data
Analytics
Data Platforms
Rapidly solving
the issue of under-
performing multi-siloed,
mixed technology
data environments by
consolidating them into
simpler, fully managed
platforms or cloud
services. These solutions
integrate hardware and
software using our own
proprietary tools.
Data Analytics
Providing insight and models using analytical data platforms to join
dissimilar data sets into a single environment in which visualisation,
statistical and artificial intelligence tools can be deployed to quickly
and efficiently to create business value.
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report Strategic report
Our challenges
When executing any strategy there are challenges that the Company leadership has to tackle in order
to succeed. D4t4 Solutions is no different to any business in that it has a small number of challenges
that consume significant management effort and time. The table below sets out the key challenges
and the main management actions that are being taken to ensure they are overcome.
D4t4 Solutions plc Annual Report & Accounts 2019
Challenge
Challenge
Challenge
Challenge
Sales cycle management
The sales cycle for our products and services
is typically greater than one year due to the
cutting-edge nature of the products. There are
also typically multiple stakeholders within the
client company that have to be addressed.
Also due to the size of projects internal
budgets have to be planned far in advance.
The challenge is to manage the sales pipeline
so that investor expectations for steady
predictable growth are met.
Expanding the relationship base
To grow the business faster and reduce risk
the strategy calls for an increase in both the
number of partners through which sales are
made and the number of client relationships
the business has. To achieve our stated
financial performance targets our financial
resources need to be carefully shared between
sales, marketing and partnering activity.
Developing the right talent
The Company is still evolving into a data
platform company, therefore retraining and
redeployment of existing staff is still required.
The challenge is to create a balanced, flexible
and highly motivated team across three
continents.
Creating the right products
Development resources are allocated based
upon financial performance targets and
consequently management has to prioritise
product development carefully. The challenge
is to understand the market and make the right
investment decisions.
Management actions
Management actions
Management actions
Management actions
S
S
t
t
r
r
a
a
t
t
e
e
g
g
c
c
i
i
r
r
e
e
p
p
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o
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r
t
t
C
o
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p
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g
o
v
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n
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c
e
i
F
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a
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c
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Bi-weekly sales reviews
Monthly Board review of the sales pipeline
Account plans for every major client are
being developed
Relationship mapping is undertaken for
major clients
Flexible pilot projects offerings to
engage the client early in the process are
made available
Additional sales & marketing investment
including Gartner and Forrester
Growing partner base
Mix of direct and indirect
commercial relationships
Deeper understanding of client data and
analytics maturity and how it evolves
Retraining investment is being made
as required
Working location flexibility is offered to
all staff
Refurbished offices to improve the
working environment
Increasing number of company-wide
events to develop a greater team spirit
l
S
t
a
t
e
m
e
n
t
s
Frequent client and partner engagement to
understand changing requirements
Interaction with industry analysts to
understand current and future trends
Attending events and seminars to gain
new knowledge
Growing the number of developers,
especially in the mobile arena
Total remuneration, including share options,
Structured product planning meetings
is reviewed annually in light of the
competitive market
involving all stakeholders
1616
17
17
17
17
Strategic report
Business model
The Board is confident that the D4t4 business model supports the business strategy of growing software and recurring
revenues year-on-year, and it will be reviewed as the business grows.
Our strengths
Our core capabilities
Value creation
D4t4 Solutions plc Annual Report & Accounts 2019
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t
r
a
t
e
g
c
i
r
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p
o
r
t
People
Our teams are at the heart of the business. They understand the markets we
operate in, create innovative solutions, write product code, drive sales and
deliver solutions. In order to maintain and drive the business forward D4t4
seeks to attract and retain the best talent in our marketplace. The business
is primarily organised as a single entity, rather than divisions. As the business
wins and delivers new contracts this format gives D4t4 the best flexibility to
deploy skilled staff on to the right projects at the right time.
Intellectual property
To deliver the strategy the business invests in developing intellectual property
(IP). Competitive advantage is maintained through continual investment in the
core functionality of our software product, developing solution ‘know-how’,
building tools to automate processes (such as software deployment), applying
for additional legal protection for our IP and the development of a network of
partners who rely on the technology for their own business.
Partners
Our route to market is to sell our software and solutions in conjunction with
other third party organisations, including SAS Institute, Dell EMC, Teradata,
Pegasystems, Microsoft and Adobe. The solutions D4t4 deliver primarily
contain components from SAS Institute, Microsoft and Dell EMC and our own
software, Celebrus. We undertake joint sales and marketing activities with the
organisations to generate the majority of our sales.
Security
Data security is vitally important to both our clients and D4t4. Regulations such
as the European General Data Protection Regulation (GDPR) and the nature of
the consumer data we handle means secure process and facilities that enable
ISO27001 and PCI compliance are needed. Our software is regularly tested to
ensure it is safe, private and secure.
Data
Capture
Product planning and
software development
skills coupled with
innovation capabilities
and deep data collection
domain knowledge.
Data
Management
Operational systems
management skills coupled
with strong security skills
and in-depth technical
knowledge across a broad
range of technologies.
Data
Platforms
Architecture and
deployment skills for high
performance on premise,
cloud or hybrid cloud
solutions that combine
hardware, software
and services.
Data
Analytics
Analytics strategy and
business consulting
skills, coupled to data
solutions, data wrangling,
visualisation and advanced
analysis capabilities.
The unique combination of these four elements makes D4t4 a distinctive
business. The fundamentals create competitive advantage by enabling the
D4t4 to offer complete enterprise scale data solutions for the largest financial
services and consumer organisations.
For investors
Our strategy and business model are designed to create the opportunity to earn
high margin recurring revenues, that deliver capital growth and a progressive
dividend policy.
For customers
D4t4 provides an end-to-end data service that is designed, from the ground up,
to be safe, secure and high quality, which result in delivering exceptional value
to our clients over many years.
For employees
D4t4 provides a stable and secure working environment in which staff can
develop their own careers. As a global business D4t4 aims to assist staff in
gaining valuable international experience as well as broad exposure to all the
latest data tools and technologies.
Business stream reporting
The core capabilities of the organisation and the business model are reflected
in how the business is managed. The table below shows how each of the
capabilities get reported within the accounts upon which management make
their key decisions.
Products -
own IP
Products -
3rd party
Delivery
services
Support &
maintenance
Data
Capture
Data
Platforms
Data
Management
Data
Analytics
A tick in the table above reflects revenue associated with one of the core services. For example, when we
sell Data Capture software (Products – own IP) we install it on the customer’s systems (Delivery services) and
then continue to support them (Support & maintenance) over the contract life.
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Strategic report
Our intellectual property
Intellectual property (IP) is the source of our competitive advantage, and it powers the growth of the
business around the world. The following section provides an overview of the core IP assets of the
business and how they enable competitive advantage.
Data Capture
Celebrus is the ‘customer data platform’ (CDP) software that the Group acquired in 2015. The underlying technology has
been in continuous development since 1999 and is protected by a number of patents. The core functions of Celebrus are
to capture data, create profiles, connect the data to enterprise tools whilst keeping all the sensitive consumer data under
complete control.
Celebrus capabilities and competitive advantage
CAPTURE
CREATE
CONNECT
CONTROL
Capture customer
Create a unified
Connect to
Control customer
behaviour and
experience 1st-party
data from all of
stream of events
advanced analytics
data securely and
and signals,
tools and real-time
compliantly with
structuring them
decisioning to
complete authority
your digital and
into profiles
power fraud, risk
over processing
physical channels
at scale
and personalisation
and policies
Patented data
collection
Unique capability
Truly “instant
Exceptional data
to produce multiple
data” is a unique
management
mechanisms that
data streams to
capability that
enable maximum
enable multiple uses
supports high
capture at
minimum cost
value uses
capabilities that
maximise control
and minimise cost
S
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A
Celebrus is typically deployed
across multiple digital channels to
collect consumer interactions, and
Customer data sources
this data can be used to power over
two hundred separate business
processes that depend upon
advanced analytics, personalisation
and real-time decisioning.
Celebrus is typically bought by
clients for a single use case (e.g.
personalised messages) using data
from a limited number of sources.
As clients adopt Celebrus fully they
typically expand the number of data
sources, the number of countries
deployed in and the number of use
cases. All these trends combine to
provide opportunities to increase
revenue for D4t4 over time.
Mobile
Web
Messages
Video / Audio
Advertising
ChatBots
IoT
Voice
API
Advanced analytics
Customer journey
Customer experience
Churn
Marketing effectiveness
Demand
Pricing
Customer Data Platform
Real-time decisioning
Unified Customer Profiles
Segmentation
Real-time Connections
Next best action
Credit limits
Fraud detection
Personalisation
Offer
Content
Messages
Recommendations
The major teams within a client that can use the data produced by Celebrus to deliver business advantage
Digital sales
Demand &
pricing
Customer
experience
Marketing
effectiveness
Credit
decisions
Compliance &
security
Fraud
detection
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Strategic report
Our intellectual property (continued)
What are the results of using Celebrus?
Data platform tools
D4t4 clients usually keep their results confidential, however recently two clients have given public presentations at
In the course of delivering data management solutions and data platforms, D4t4 has developed a suite of tools to assist in
major technology vendor conferences that have revealed some of the results their “powered by Celebrus data” digital
the migration of data to newer on-premise, cloud or hybrid platforms.
transformation projects have achieved.
Benelux insurer
French bank
Our IP includes:
1. Tools for synchronising very large data quantities non-disruptively, taking across extended access control information,
and converting data in the background between old and new formats. Using these tools, D4t4 speed up client
adoption of new technology and enable them to test in parallel and converge on a working delivery quickly, thereby
Digital sales
+27%
Increased digital sales rate
+300 to +900%
reducing the timescale and costs for new project implementation.
Churn recovery
+33%
Click rates on promotions
+500%
Re-engagement rate for
abandoned applications
Re-engaged applicant
conversion rate for loans
+25%
+38%
These results demonstrate the power of the data
Study that shows how Celebrus created a 2.44 x return on
generated by Celebrus when deployed as part of a
investment for a small retail bank, paying back in less than
transformation programme. They give confidence in the
two years. The bank generated $1.61 million net profit per
product and a real sense of achievement to the D4t4 team.
million customers based upon a single use case. As noted
These results have been further validated by Forrester
Consulting who have produced a Total Economic Impact
above many Celebrus clients have multiple use cases and
tens of millions of customers.
Forrester Consulting Report: Total Economic Impact of One Celebrus Use Case
Total costs
Total benefits
Cumulative net benefits
Cash
flows
$6.0 M
$5.0 M
$4.0 M
$3.0 M
$2.0 M
$1.0 M
-$1.0 M
-$2.0 M
Gross sales
uplift
$15.4M
ROI
2.44x
NPV
$3.22M
Payback
<2 years
Per million
customers
Iterate through smaller cycles / more frequently
Synchronise data
& access rights
Convert
Import / update
Test / accept
GO LIVE
+
+
+
Data sources
2. Distributed storage management – monitoring and controlling storage allocation and tuning synchronisation and
backup through the use of snapshots to optimise usage of storage and meet requirements for RPO and RTO
(Recovery Point Objective and Recovery Time Objectives) for big data platforms. This capability enables our clients to
optimise use of existing investments, helping to keep investment and costs down.
3. Configuration control and change management know-how to build solutions quickly and deliver change efficiently
thereby ensuring the greatest possible agility.
4. Vulnerability and threat management to monitor vulnerabilities and availability of supplier patches or mitigations,
manage the roll out to production environments, and monitor that the weaknesses have been eliminated. Security is of
prime concern to our clients, so these tools and techniques are critical to our success.
Initial Year 1 Year 2 Year 3 Year 4 Year 5
source: A Forrester Total Economic Impact™ Study Commissioned By D4t4 Solutions and Dell EMCDecember, 2018
22
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Strategic report
Growth plan
Our business model, our chosen markets, together with our innovative technology and IP are all harnessed to grow the
business through four key initiatives.
1
Regional growth
Continued investment will enable the business to access market opportunities that are currently untapped
In 2018/19 we increased our North American team significantly and created a pipeline of new clients
In 2019/20 we will continue to grow the US team in order to exploit the largest and most sophisticated
market in the world
During the current financial year, we will begin investing in the Asia Pacific region to support our existing
clients and access new opportunities
2
Additional use cases
Use cases are the business and technical ‘know-how’ needed to support new uses for Celebrus data in
areas such as risk, fraud and vulnerable customer support
Developing new ways to use Celebrus data creates new entry points into clients through different teams
and partners as well as expanding Celebrus use with existing clients
In 2018/19 we created a knowledge bank of all the use cases and started to use them as a tool to support
and engage existing clients and prospects
During 2019/20 we will expand our portfolio to create more use cases in risk, fraud and commercial
decision making (e.g. pricing)
3
More engagement with clients
Investing in customer success teams to work more closely with clients to help creating value from data
leads to cross-sell of services and expansion of existing relationships
In 2018/19 we started to engage more clients directly, rather than through a partner, to enhance the
quality of service and advice available to the client
In 2019/20 we will advance our Celebrus customer success capability by dedicating more time and
resource to working in closer collaboration with our clients outside the usual project-based activity
4
New partners
Adding new partners gives access to more solution sales opportunities that require the power of Celebrus
or the D4t4 data platform capabilities
In 2018 /19 we developed new relationships with Pegasystems, a leading decisioning software company,
that uses Celebrus data to power real-time personalisation
In 2019 /20 we will develop new relationships with a regional partner in Asia Pacific to support the regional
growth goals and will extend our existing portfolio of systems integrators
We will also seek new partners to support the new use cases in areas such as risk and fraud as they
are developed
Technology Partners
Service Partners
D4t4 has many potential growth areas; the Board ultimately makes the decisions regarding the balance of profit vs. growth
investment. It is the Company policy to ensure steady profit growth as a primary objective balanced by an appropriate
level of investment to deliver growth activities.
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Strategic report
Key performance indicators
In addition to the growth in the Data Capture total sales (including recurring revenue, licenses and services), the Group’s
financial KPIs are revenue, gross profit margin, cash, profit before tax and adjusted earnings per share.
Group’s financial key performance indicators
Revenue
Gross profit margin
Adjusted profit
before tax
Adjusted diluted EPS
Growth of data
capture revenue
Net cash
+37.0%
+0.03%
+47.9%
+57.5%
+42.6%
+185.7%
2019
£25.24m
2019
56.69%
2019
£6.02m
2019
13.89p
2019
42.6%
2019
£11.00m
2018 (restated)
£18.43m
2018 (restated)
56.66%
2018 (restated)
£4.07m
2018 (restated)
8.82p
2018
11.1%
2018
£3.85m
Growth was recorded in all
Stable margin as all areas of the
Profit was impacted by the IFRS
Without the IFRS adjustment
The Celebrus related business
Following the completion of a
major areas of the business, and
business grow, higher software
15 adjustment (See note 30)
growth in EPS would have been
returned to very positive growth
number of projects at the end
excluding the IFRS 15 adjustment
margins offset by lower 3rd party
and by our accelerated
6.4% due to increased tax
as the business became more
of the last financial year there
the growth would have been a
margins. These are expected to
investment in growth activities in
charge, increased holding of
focussed and the increased
was a significant debtor balance
significantly improved 17%.
be maintained in the future.
North America.
treasury shares and two in-year
investment began to deliver
that was paid in July 2018.
share issues.
expected results.
Subsequently all borrowings have
been repaid and the Company
now has sufficient cash reserves
for normal operations and some
flexibility to fund new initiatives
or acquisitions.
26
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“I am delighted to present a complete set of positive KPIs
and would like to thank the whole D4t4 team around the
world for their efforts this year”
Peter Kear, CEO
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Strategic report
Principal risks and uncertainties
D4t4 Solutions faces all the normal economic, commercial and political risks facing any UK
based business that trades internationally.
The major risks to the Group that the Board focuses upon are shown below:
1
Execution timing
2
People risks
3
Market and
regulatory changes
4
Competition
Risk heat map
1 Execution timing
2 People risks
3 Market and regulatory changes
4 Competition
5 Client or partner loss
6 Data loss and reputational risk
7 Foreign currency
2
3
4
77
1
5
66
Low
IMPACT
High
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At the centre of our strategy is the
delivery of product and projects in
line with our business plan. Failure
to deliver these projects and
products within the constraints of
our fiscal periods would impact
our overall objectives.
A loss or severe issue with key
The Group is exposed to the risks
New competitors or changes to
personnel could impact the ability of
of changing regulations for the
existing competitors’ products
the group to execute on its strategy,
collection of consumer data. Some
can significantly alter the market
causing severe reputational and
of these changes may be positive,
dynamics, which in turn risks the
operational challenges.
but others negative which can
position and standing that our
impact on D4t4’s performance
own Intellectual Property has in
and outlook.
the banking, finance and financial
and consumer marketplace.
Change in risk
Change in risk
Change in risk
Change in risk
No change in risk level
Increase in risk level
Increase in risk level
No change in risk
Risk remains mitigated with ongoing
Perceived to have increased due
Increase in risk level due to the
improvement to standardised
project delivery processes.
to growth and complexity of the
greater attention in policing the
business.
internet, company corporate
governance and increasing financial
reporting standards complexity.
Mitigation
Mitigation
Mitigation
Mitigation
Our clients are typically
engaged with us on multi-year
programmes, so we invest
significantly in sales, marketing
and partner activities to ensure
we can plan and predict the
associated growth and revenue
targets.
Key individuals are identified,
D4t4 monitors the markets in
The Group continually scans the
succession plans put in place and
which we operate by close
market for potential technology
actions taken to spread the risk
collaboration with our clients,
threats and has a development
between more individuals.
suppliers and partners. We
process in place to ensure its own
then plan product, project or
technology continues to evolve to
operational changes to ensure
meet client needs, that cannot be
we are minimising the impact of
easily disrupted, and which can
changes. We follow proposed
be protected by patents.
regulatory changes closely.
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Principal risks & uncertainties (continued)
Strategic report
Corporate Social Responsibility and Sustainability
5
Client or
partner loss
6
Data loss and
reputational risk
7
Foreign currency
The loss of a key client or
A significant IP, data loss, or
Changes in foreign exchange
significant sales partner would
security breach could impact
rates can result in reduced
impact the ability of the Company
the brand and reputation of the
profitability due to cash collection
to meet its key business objectives.
Group.
values not matching transaction
values and an increased potential
for currency losses in the
income statement.
Change in risk
Change in risk
Change in risk
No change in risk level
No change in risk level
Increase in risk level
No change in risk level as our
No change as although complexity
Perceived to have increased due
clients and partners continue to
increases, so do D4t4’s procedures
to the increasing value of revenue
engage and plan with D4t4.
and mitigation tools.
invoiced in foreign currency.
Mitigation
Mitigation
Mitigation
The business has specific
We are ISO 27001 certified and
The use of financial instruments
relationship management plans
operate an information security
(eg forward contracts) can help
in place for both clients and
process that controls and
reduce the risk of impact of
partners. The status of the
minimises the risks. This process
fluctuating foreign exchange rates.
relationships is reviewed by
is externally assessed yearly.
management on a regular basis
and actions put in place to reduce
the risk of loss.
D4t4 Solutions aims to work in a way that delivers
socially responsible and environmentally sustainable
business performance. We ensure observance of
the law and conduct activities to the highest ethical
standards, and we expect our customers and
suppliers to embrace these same principles.
Environment
Policy statement
D4t4 Solutions fully supports the principles of, and is
committed to, promoting good environmental practice and
sustainability in the conduct of its activities. It is our policy
to ensure that any adverse effects on the environment are
kept to a minimum.
D4t4 Solutions therefore:
wholly supports the requirements of accepted
international standards and current EU environmental
legislation and codes of practice.
minimises consumption through the reduction, reuse
or recycling of materials as much as possible.
encourages efficient use of energy, utilities and
natural resources.
continually strives to improve environmental performance.
communicates our environmental commitment to
clients and suppliers and encourages their support.
Carbon emissions
Our recent Head Office refurbishment was conducted
with a strong environmental ethos at its core, focusing
on delivering the latest standards in insulation, lighting,
heating and energy waste reduction.
The electricity supply at our Head Office is based almost
entirely on renewable energy sources and will be moving to
100% renewable sources within the next year.
The rollout of improved office collaboration software is
facilitating a more dynamic and flexible workforce whilst
further reducing travel and associated environmental impacts.
Moving forward, we will be exploring further areas for
reduction of carbon emissions and consideration of carbon
emissions offset options for the Company as a whole.
People
D4t4 Solutions values teamwork, taking personal
responsibility, positive attitudes and working hard to
deliver beneficial outcomes for all our customers, staff and
shareholders alike. We encourage personal learning and
development of our team members in order to create a
more sustainable workforce.
Ethical Business Practices
Human rights
D4t4 Solutions fully recognises and supports the protection of
Human Rights, the UN Universal Declaration of Human Rights
(UDHR) and the ten principles of the UN Global Compact.
Anti-corruption and bribery
It is our policy to conduct all of our business in an honest and
ethical manner. We take a zero tolerance approach to bribery
and corruption and are committed to acting professionally,
fairly and with integrity in all our business dealings and
relationships wherever we operate, and implementing and
enforcing effective systems to counter bribery.
We will uphold all laws relevant to countering bribery and
corruption in all the jurisdictions in which we operate.
However, we remain bound by the laws of the UK, including
the Bribery Act 2010, in respect of our conduct both at
home and abroad.
Modern slavery
We have a zero tolerance approach to modern slavery
and will act ethically and with integrity in all our business
dealings and relationships. Our approach is also
underlined by our recognition and support for UDHR and
UN Global Compact.
Supplier engagement includes a check on approach to
modern slavery and a record is noted with respect to their
statement on modern slavery.
Equal opportunity
In order to provide equal employment and advancement
opportunities to all individuals, employment decisions
at our Company will be based on merit, qualifications
and abilities. Except where required by law, employment
practices will not be influenced or affected by an
applicant’s or employee’s race, colour, religion, gender,
national origin, political affiliation, marital status, sexual
orientation, age or any other characteristic protected
by law. This policy governs all aspects of employment,
including selection, job assignment, compensation,
discipline, termination, and access to benefits and training.
On behalf of the Board.
Peter Kear
Chief Executive Officer
24 June 2019
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D4t4 Solutions plc Annual Report & Accounts 2019Strategic report
Corporate Governance
Board of Directors
D4t4 Solutions plc Annual Report & Accounts 2019
Peter Kear
Chief Executive Officer
Peter co-founded D4t4 Solutions in 1985. Prior to this he was a divisional
director for Hawke Electronics, then a subsidiary of Lex Service plc. He
became CEO in 2016, having been responsible until then for both the sales
and business development aspects of the Company. His position as CEO
involves overall responsibility for the management of the Group’s activities and
he works closely with the other Executive Directors on the determination of the
Group’s overall strategy.
Matthew Tod
Chief Data Officer
Matthew brings a wealth of expertise in big data, analytics and software to the
Board. Prior to joining D4t4 Solutions Matthew founded a data and analytics
company in 2002, Logan Tod & Co, that was acquired by PwC in 2012. He
subsequently became a partner leading PwC’s Customer Consulting Group.
Matthew has established himself as a digital data expert within the key
sectors of retail, e-commerce, mail-order, media, consumer goods and
financial services.
Carmel Warren
Chief Financial Officer
Carmel was appointed to the Board in 2015 following the acquisition of
Celebrus. She qualified as a Chartered Accountant with EY and has over 25
years’ experience across multiple industries. Her operational and board level
experience ranges from start-ups to blue chip companies as well as gaining
strong listed company experience. Carmel joined Celebrus as Chief Financial
Officer in 2007 after having held senior positions at EY, ExxonMobil and
Brightside Group plc.
Jim Dodkins
Chief Technical Officer
Non-Executives
Peter Simmonds
Non-Executive Chairman
Peter was appointed to the Board as Chairman in April 2015. He is Chairman of the Audit and Nomination Committees
and is also a member of the Remuneration Committee. He was CEO of dotDigital Group plc for eight years and a
major contributor to their success prior to stepping down. He is also Chairman of Cloudcall Group plc and is a Board
member of the Quoted Company Alliance.
John Lythall
Non-Executive Director
John co-founded the company in 1985 and was Managing Director of D4t4 Solutions from 1985 to 2016 when he retired
- handing over the reins to long term business partner Peter Kear - taking up a role as Non-Executive Director with
the company. Prior to forming D4t4 he was Managing Director of Hawke Electronics, a computer systems distribution
Jim is responsible for the Company’s strategic direction in technology,
business which he and his partners sold to the Lex group. He has a wealth of experience in sales, operations and
specialising in solution architecture for D4t4 Solutions and its clients. Prior
finance and is a member of the Remuneration Committee.
to joining D4t4 Solutions he worked for Logica plc in various roles, where he
gained wide industry experience and later managed the division responsible
for projects in the broadcast and media sector.
Peter Whiting
Non-Executive Director
Mark Boxall
Chief Operating Officer
Mark brings a wealth of knowledge and experience in the areas of sales,
delivery, operations and finance having been both board director and
senior manager at technology consultancies and product based technology
companies such as rbase, Morse, PTC and Siemens, and most recently
Dell EMC.
32
32
Over a 30-year career, Peter has gained extensive financial and commercial experience. His core skills are centred
around the financial services and technology industries; he has the proven ability to quickly understand complex
technologies and their applications and at the same time successfully developed strong interpersonal and management
skills which have enabled him to build a technology-led NED portfolio. He is currently a Non-Executive Director of
FDM Group plc, Keystone Law plc, Microgen plc and TruFin plc. Peter is Chairman of the Remuneration Committee
(appointed 2 October 2018) and is also a member of the Audit and Nomination Committees.
C
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o
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Chairman’s introduction to governance
Corporate governance
Statement of corporate governance
The Board recognises the importance of high standards of corporate governance for delivering long-term success to the Group
This statement explains how D4t4 Solutions plc has applied the main and supporting principles of corporate governance
and acknowledges its role in setting the culture, values and ethics of the Group (as outlined in Principle 8) and communicating
and describes the Group’s compliance with the provisions of the QCA Corporate Governance Code (2018).
these to all the Group’s stakeholders. The Board meets regularly to discuss the monitoring and promotion of a healthy corporate
culture. The Chairman has ultimate responsibility for corporate governance matters and has overseen the preparation of this
governance statement accordingly.
In March 2018, AIM Rule 26 was amended to require all AIM companies to disclose details of a recognised corporate
governance code that its Board of Directors has decided to apply, how the Group complies with that code and, where it
departs from its chosen corporate governance code, an explanation of the reasons for doing so.
Since then and to assist the Board’s aim to operate as effectively as possible, the Board has formally applied the principles of
the Corporate Governance Code published by the Quoted Companies Alliance (the QCA Code) to ensure compliance with AIM
Rule 26 and for the production of the Group’s Annual Report and Accounts.
For the purposes of clarity and candour, the description of how the group complies with the ten key principles of the QCA
Code begins with a summary of the two areas where the Group does not yet fully comply, followed by a review of each of
the principles in turn.
No significant corporate governance matters arose during the period covered by the 2019 Annual Report nor subsequently
to the date of this statement on which it was considered necessary for the Board or any of its Committees to seek
external advice.
The Board consults with its Nominated Adviser and other professional advisers on routine matters arising in the ordinary
course of its business.
Board discussions are conducted openly and transparently, which creates an environment for sustainable and robust debate.
Exceptions to the application of the QCA Code
In the year, the Board has constructively and proactively challenged management on Group strategies, proposals, operating
The following table summarises the specific areas within two of the principles where the Board considers that the Group
performance and key decisions, as part of its ongoing work to assess and safeguard the position and prospects of the Group.
does not fully comply, or may be perceived as not fully complying, with the QCA Code.
Key risks and uncertainties affecting the business are regularly assessed and updated. The Board challenges management
to ensure appropriate risk mitigation measures are in place. The Board has completed a full, specific review of the Group’s
key risks and uncertainties (page 28 of the 2019 Annual Report), in light of the new and emerging risks or uncertainties arising
from the Group’s strategic growth plans and the wider economic, political and market conditions. As part of a critical review
of the Group’s procedures, a rolling risk review process has been developed which seeks to ensure that risks are constantly
monitored, assessed and quantified, so that action may be prioritised by the Board accordingly.
Whilst the current composition of the Board demonstrates a wide balance of skills, our Nomination Committee has been
working to further strengthen the balance of independent Non-Executives on the Board. This will allow us to address ongoing
diversity issues in order to further progress towards achieving full compliance with the QCA Code.
Finally, the Board continues to engage with shareholders and welcomes ongoing dialogue throughout the year and as always,
I welcome shareholder attendance and participation at the Annual General Meeting.
A statement of the Directors’ responsibilities in respect of the accounts is set out on page 58 of the 2019 Annual Report.
On behalf of the Board
Peter Simmonds
Non-Executive Chairman
24 June 2019
Principle 5 (Maintain the Board
as a well-functioning, balanced
team led by the Chair)
Application: The Board should
have an appropriate balance
between Executive and
Non-Executive Directors.
Application: The Board should have
at least two independent
Non-Executive Directors.
Independence is a Board judgement.
Exceptions and explanations
During the period covered by the 2019 Annual Report, the Board consisted of
9 members, 5 Executive and 4 Non-Executive. On 31 March 2019 R McDowell
resigned from the Board which meant that at the year end the Board comprised
5 Executive and 3 Non-Executive members. Neither breakdown meets the
general expectation that at least half of a Board should be independent Non-
Executives. The Board has recognised this imbalance for some time and is
currently undertaking a recruitment exercise to increase the number of Non-
Executive Board members.
Following the appointment made in July 2018 of P Whiting and year end
resignation of R McDowell, the Board currently has three Non-Executive Directors.
P Simmonds and P Whiting are deemed to be independent, and therefore this
provision of the Code was met from July 2018.
J Lythall is not considered independent due to the fact that prior to 1 April 2016
he acted in the capacity of Chief Executive Officer. Consequently he is subject
to a requirement to retire and offer himself for re-election on an annual basis,
rather than on the basis of the general rotation of one-third of the
Board annually.
J Lythall was re-elected at the Company’s AGM held on 23 August 2018.
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance Corporate governance
Statement of corporate governance (continued)
Principle 6 (Ensure that
between them the Directors
have the necessary
up-to-date experience,
skills and capabilities)
Exceptions and explanations
In the period from 1 April 2018 to the date of this corporate governance statement, the following activities and events with
stakeholders were carried out with the view to:
Communicating the Group’s business model, strategy and values,
Provide financial updates and explanations sought by shareholders, and
Engage with shareholders to fully understand their needs and expectations.
Application: The Board should
The male to female ratio on the Board is presently 7:1 and there are currently no
contain the necessary mix of
female Non-Executive Directors. We believe that this reflects a strong gender
experience, skills, personal
bias in the technology industry as a whole, and the Board remains confident
Date
Description of engagement
Group participants
Notes
qualities (including gender balance)
both that the opportunities in the Group are not excluded or limited by any
and capabilities to deliver the Group’s
diversity issues (including gender) and that the Board nevertheless contains the
June 2018
Preliminary results roadshow
P Kear, C Warren
strategy over the medium
necessary mix of experience, skills and other personal qualities and capabilities
to long term.
necessary to deliver its strategy.
August 2018
AGM
Directors
Shareholders invited to attend with
Q&A session
The Principles of the QCA Code
Principle 1 - Establish a strategy and business model which promote long-term value for
shareholders
The Board’s shared view of the Group’s purpose, business model and strategy, and the values underpinning them, are
detailed in the Strategic Report within pages 8 to 25 of the 2019 Annual Report as follows:
“What we do” (pages 8 to 13) explains what D4t4 Solutions’ services and products are.
“Vision and strategy” (pages 14 to 15) considers how D4t4 Solutions seeks to realise its’ vision of earning high-margin,
recurring revenues.
“Business model” (pages 18 to 19) reviews D4t4 Solutions’ key strengths, capabilities and values.
The Group’s approach to delivering long-term value for shareholders is addressed in the Statement of the Chief Executive
Officer on pages 4 to 7. Pages 24 to 25 set out the Group’s three-pronged “Growth acceleration plan” and pages 28 to 30
(“Principal risks and uncertainties”) detail the key risks faced by the business and how these continue to be addressed.
November 2018
Interim results roadshow
P Kear, C Warren
February 2019
Technology Demo Day
M Tod, C Warren
June 2019
Preliminary results roadshow
P Kear, C Warren
August 2019
AGM (scheduled 22 August)
Directors
Shareholders invited to attend with
Q&A session
Various
Shareholder / potential
shareholder meetings
The Board is kept informed of the views of shareholders and other stakeholders at each monthly Board meeting through a
report from the Chief Executive Officer together with formal feedback on shareholders’ views gathered and supplied by the
Group’s advisers. The views of private and smaller shareholders, typically arising from the AGM or from direct contact with
the Group, are also communicated to the Board on a regular basis.
P Simmonds is available to shareholders if they have concerns where contact through the normal channel of Chief Executive
Officer has failed to resolve or for which such contact is inappropriate. P Simmonds can be contacted through the UK head
Principle 2 – Seek to understand and meet shareholder needs and expectations
office contact information shown on our website.
Relations with shareholders and dialogue with institutional shareholders
The Board as a whole is responsible for ensuring that a dialogue is maintained with shareholders based on the mutual
understanding of objectives.
Members of the Board meet with major shareholders on a regular basis, including presentations after the Group’s
announcement of the year-end results and at the half year.
In addition to regulatory news announcements the Directors have published the annual report and accounts, the annual
results presentation, the half year results and announcements on new contract wins as they arise.
Constructive use of the AGM
The Board uses the AGM to communicate with private and institutional investors and welcomes their participation. Eight
members of the Board attended the Group’s AGM held on 23 August 2018 and all Board members are expected to be in
attendance at the meeting in August 2019.
P Simmonds as Chairman invites all shareholders to the AGM and ensures that he is available to meet them and answer
their questions at this time.
At these meetings, shareholders are asked to confirm that their questions have been successfully answered. At the year end
and interim presentations to shareholders, the Group’s Nominated Advisor consults with attendees for feedback to ensure
that future presentations encapsulate their requirements where possible.
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Statement of corporate governance (continued)
Principle 3 – Take into account wider stakeholder and social responsibilities and their implications
for long-term success
The Board is fully aware that the long term success of the Group relies upon maintaining successful relationships with a
range of different stakeholders, both internal and external. The table below identifies who the key stakeholders are and how
we engage with them.
Stakeholders
Reason for engagement
How we engage
Staff
Our ability to provide an
We have identified our internal values in order to recruit and maintain
industry leading software
talented and motivated staff. These values form the basis of all
and services business is
communications which are sought through internal appraisals and bi-
dependent upon good
weekly company informal meetings, which allow staff to engage with
communications within our
other parts of the organisation and recognise the successes of others.
organisation.
During the year, quarterly Group-wide meetings are held to provide staff
with an operation and sales update on what is happening within the
business. These meetings are followed by lunch.
Clients
Understanding current and
We have account managers and account directors whose primary
emerging requirements of
responsibility is to engage with our clients to understand and develop
clients enables us to develop
our products and services so that we can work with them to exceed
new and enhanced services,
their requirements.
together with software to
In relation to our own IP products we seek formal and informal
support the fulfilment of those
feedback on product roadmap and enhancements via our support
services.
offering and annual user group meetings.
Suppliers
Our relationships with our
We treat all suppliers as individuals, build long term collaborative
suppliers are key to the core
relationships and where possible work within the local community.
success of our business.
Our partnership and purchasing teams seek to build ongoing
communication with our suppliers so that feedback can be received
and acted upon. We seek to ensure that supplier invoices are
processed and paid promptly.
Stakeholders
Reason for engagement
How we engage
Industry bodies
Information security is
We have an established information security management system
fundamental to our business,
which encompasses independently audited ISO27001 and PCI
clients, partners, suppliers
DSS controls, industry best practices, as well as latest regulatory
and associated data subjects
requirements including General Data Protection Regulations (GDPR)
and so we ensure that our
and the UK Data Protection Act (2018). Our experienced Information
policies and procedures
Security Committee ensure that governance, risk and compliance is
provide a cohesive approach
actively managed and that our policies and procedures evolve to meet
to this important area.
ongoing requirements.
Communities
We consider that it is
We look to recruit locally experienced staff and through the local
important to be a business
universities, both in the UK and India. We employ local suppliers
that makes a positive
where possible and throughout the year, we encourage staff to
contribution to local
identify charities that they have an affiliation with for the Group as a
economies and is attractive
whole to support.
as an employer and partner.
Principle 4 – Embed effective risk management, considering both opportunities and threats,
throughout the organisation
The Board’s risk management controls and mitigation strategies are described in the 2019 Annual Report at pages 28 to 30
(“Principal risks and uncertainties”) and page 44 (“Control environment”).
The Directors and operating Company management have a clear responsibility for identifying risks facing each of the
businesses and for putting in place procedures to mitigate and monitor risks. To this end the Board has established a Risk
sub-Committee, reporting directly to the Board, consisting of one Non-Executive Director, one Executive Director, a senior
member of the finance team and a senior member of the Operations team (the Information Security and Process Manager);
other members of the Company can be seconded to the Committee as required.
The remit of the Committee is to examine the vulnerability of the Group to all types of risk, the mitigation of such risks,
maintain the risk register to properly reflect this and to report back to the Board with any changes in, or new areas of,
Shareholders
As a public company it is vital
This is achieved in several ways:
vulnerability to risks and recommendations for mitigation.
that we build relationships
with our shareholders so that
we can both inform them of
our successes and listen to
Regulatory news releases
Investor relations section of the website
This is done at three levels:
A review of the risk register is included in the monthly Board pack.
Annual and half-year reports and presentations
A quarterly report provided to the Board.
their guidance.
AGM
A formal assessment of risks during the annual budget process.
Capital markets and Technology demo events
Our intention is to engage with our shareholders to inform them of our
successes and to listen to the question and comments. This feedback
is usually received at the AGM and the investor presentations.
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Statement of corporate governance (continued)
Principle 5 – Maintain the Board as a well-functioning, balanced team led by the Chair
Composition
Directors’ biographies are shown both in the 2019 Annual Report on pages 32 to 33 and on the Group website.
Commitment
All Directors are expected to attend the monthly meeting of the full Board, or to make themselves available to join the
meeting by telephone, and to attend all meetings of any Committee(s) of which they are members. In addition, the Directors
are expected to attend strategy and business planning meetings each year. The Non-Executive Directors are expected to
Following the resignation of R McDowell on 31 March 2019, the Board comprises eight members, made up of five executive
make themselves available at all reasonable times for consultation by other members of the Board.
directors and three non-executive directors.
At the date of this corporate governance statement, the following Non-Executive Directors are considered to be independent:
P Simmonds (Chair)
P Whiting
Please see the “Exceptions” section above for details of why J Lythall, the Board’s other Non-Executive Director, is not
considered to be independent.
The Board does not presently consider it necessary to appoint an independent Director to a Senior Independent Director
role but will keep the appropriateness of this position under review.
All Directors are subject to election by shareholders at the first AGM immediately following their appointment and thereafter
are subject to re-election at intervals of no more than three years. All Non-Executive Directors are appointed for fixed terms
in line with corporate governance requirements, although those Non-Executive Directors whose independence may be
called into question are subject to re-election annually. The Non-Executive Director currently subject to annual re-election is
J Lythall, as described in the “Exceptions” section above.
All of the Executive Directors are full-time employees of the D4t4 Solutions plc.
Operation of the Board
The Board is responsible to shareholders for the proper management of the Group. A statement of the Directors’
Prior to each monthly Board meeting the Directors receive a detailed pack which includes:
Board meeting agenda
Minutes from previous Board meeting
Board pack which includes financial summary, update on each part of the business, strategy execution update and risk
assessment update
Papers as required for additional items requiring Board attention.
Meetings and attendance
The following table summarises the number of Board, Audit Committee, Remuneration Committee and Nomination
Committee meetings held during the period covered by the 2019 Annual Report and the attendance record of individual
Directors at those meetings:
Board
Audit
Remuneration
Nomination
MG Boxall
JL Dodkins
PJ Kear
J Lythall
12/12
10/12
12/12
11/12
10/12
12/12
11/12
11/12
8/9
-
-
-
-
1/2
2/2
-
-
1/1
-
-
-
4/4
4/4
4/4
-
-
3/3
-
-
3/3
-
2/3
3/3
-
-
2/2
responsibilities in respect of the financial statements is set out on page 58 and a statement of going concern is given on
RS McDowell (resigned 31 March 2019)
page 54.
The Board normally meets once a month. The formal schedule of matters specifically reserved to it for decision was
reviewed and adopted by the Board on 25 April 2019 and will be reviewed annually (see website).
PA Simmonds
M Tod
CE Warren
Other matters are delegated to the Executive Directors, supported by policies for reporting to the Board. Presentations are
PF Whiting (appointed 2 July 2018)
made to the main Board at each monthly meeting by the Executive Directors and also on regular occasions by operational
management.
The Company Secretary is responsible to the Board for ensuring that Board procedures are followed, and that applicable
rules and regulations are complied with and for advising the Board, through the Chairman, on corporate governance
matters. The Group maintains appropriate insurance cover in respect of any legal action against the Group’s Directors and
the Company Secretary, but no cover exists if a Director is found to have acted fraudulently or dishonestly.
Principle 6 – Ensure that between them the Directors have the necessary up-to-date experience, skills
and capabilities
The 2019 Annual Report includes, at pages 32-33, particulars of the Directors who held office throughout the financial year
to 31 March 2019 (apart from R McDowell who resigned on 31 March 2019).
The Non-Executive Chairman and the Non-Executive Directors are able to meet without Executives present prior to each
It is Board policy that Executive Directors receive suitable training for their position, which is considered as part of the
Board meeting. The agenda and relevant briefing papers are distributed in advance of each Board meeting.
appraisal process.
When Directors have concerns which cannot be resolved about the running of the Group or a proposed action, these
concerns are recorded in Board minutes. Upon resignation, a Non-Executive Director is required to provide a written
statement to the Chairman for circulation to the Board if there are any such concerns.
The Chairman ensures that Directors update their skills and knowledge required to fulfil their roles on the Board and
Committees. Ongoing training is provided as necessary and includes updates from the Company Secretary on changes
to the AIM rules, requirements under the Companies Act and other regulatory matters. Directors may consult with the
Company Secretary at any time on matters related to their role on the Board. More detail on the experience and capability of
the Directors is included in their biographies on the corporate website.
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Statement of corporate governance (continued)
On 2 July 2018 P Whiting was appointed as an additional independent Non-Executive Director and as a member of the
Board’s Remuneration and Nomination Committees. His biography can be found in the 2019 Annual Report on page 33 and
on the Group website.
External Advice
No significant matters of a corporate governance nature arose during the period covered by the 2019 Annual Report nor
subsequently to the date of this statement on which it was considered necessary for the Board or any of its committees to
seek external advice, although the Board consults with its Nominated Adviser and other professional advisers on routine
matters arising in the ordinary course of its business.
Principle 7 – Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
The Board annually informally reviews the effectiveness of itself, its Committees and the individual Directors in the
following manner:
(i)
The role of the Committees is considered by the Executive Directors without the presence of the
Non-Executive Directors.
(ii) The Chairman and CEO examine the contribution and effectiveness of the individual Directors with regard to their
line role and contribution at Board meetings.
(iii) The whole Board examines its purpose and effectiveness with regard to identified key areas.
Principle 8 – Promote a corporate culture that
is based on ethical values and behaviours
Our long-term growth strategy incorporates our objectives
and the business model set out in the strategic report. It is
also underpinned by our core values, which were redefined
following a staff consultation process and are split between
client and internal values.
Values
INNOVATION
ENGAGEMENT
D4t4 Solutions will be a workplace in which all employees
are engaged with our business and are empowered to
get involved with our communications and decision-
making processes.
The culture of the Group is characterised by these values
which are communicated regularly to staff through internal
communications and forums. These core values are also
communicated to prospective employees in the Group’s
recruitment programmes and are further embedded within
D4t4 Solutions is dedicated to the development of
the induction process.
innovative technology that provides insight into your
business, drives value from your data and pragmatically
addresses your challenges.
SECURITY
D4t4 Solutions’ advanced technology collects, manages
and enables analysis of your data, supporting it with the
utmost care for its security.
TRUST
The Board believes that a culture that is based on the core
values is a competitive advantage and consistent with
fulfilment of the Group’s mission and execution of
its strategy.
The Board has a high proportion of Executive Director
representation which means communication and
feedback between the business and the Board is very
well established. Recognition and respect of appropriately
D4t4 Solutions takes pride in its relationships with clients,
ethical values and behaviours within the organisation is
(iv) The whole Board considers its structure, size and composition with particular regard to the skills, knowledge and
working hard to understand your business needs and
therefore both well monitored and promoted. Engagement
experience of its members and otherwise as advised by the Nomination Committee.
developing trust through professional and responsive
between the Board and the organisation via these
In addition, a formal Board effectiveness evaluation process was introduced during the year ended 31 March 2019. The
process involves all Directors completing a detailed individual evaluation of Board performance on a biennial basis. The
evaluations cover effectiveness in several areas including Board composition, Board information, Board process, internal
control and risk management, Board accountability, CEO/Senior management and Standards of conduct.
The results of these biennial evaluations are interpreted by an independent Non-Executive Director, with support from the
Chairman, and outputs plus any associated recommendations are reviewed by the Board as a whole at an offsite Board
strategy meeting. The results of the first evaluation, carried out during the summer of 2018, were interpreted by P Whiting
service provision.
COLLABORATION
D4t4 Solutions augments its own technology by
collaborating with industry partners that provide further
opportunities for engendering the long-term success of
your operation.
PRIDE
Executive Directors is therefore deemed to be all-inclusive.
Ethical business practices
The Group is committed to corporate sustainability and
to applying the highest standards of ethical conduct and
integrity to its business activities in the UK and overseas.
The Group does not tolerate any form of bribery: the
and his recommendations were presented to the Board at the strategy meeting held in October 2018. The 2018 evaluation
D4t4 Solutions will be a Group in which we can be proud
Directors and senior management are committed to
resulted in a number of areas being identified for improvement, action or closer monitoring, with the establishment of a
of our achievements, delivering the highest standards
implementing and enforcing effective systems throughout
separate (sub-Board) Risk Committee, which held its first meeting in March 2019, being a key outcome and updates on
of quality and being confident in our ability to satisfy our
the organisation to prevent bribery in accordance with its
progress towards the objectives in each area being included in the information circulated to directors prior to each monthly
Board meeting.
clients’ needs.
RECOGNITION
obligations under the Bribery Act 2010.
As the business expands and as part of succession planning, the Executive Directors will be challenged to identify potential
internal candidates who could potentially occupy Board positions and set out development plans for these individuals.
D4t4 Solutions will acknowledge the value of all
employees and recognise their contribution to the Group’s
ongoing success.
TEAMWORK
D4t4 Solutions will create an environment of innovation in
which we work together as a team to develop pioneering
technology that solves our clients’ challenges.
42
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Statement of corporate governance (continued)
Principle 9 – Maintain governance structures
and processes that are fit for purpose and
support good decision-making by the Board
The terms of reference for each of the Audit, Remuneration,
Nomination can be found in the Annual Report on pages 46
to 48 and on the Group website.
Board Committees
A description of the work of the Board’s Committees in the financial year to 31 March 2019, including a report from each of
the Audit, Remuneration and Nomination Committees, is set out at pages 29 to 35 of the 2019 Annual Report.
The work of the Nomination Committee resulted in the appointment on 2 July 2018 of Peter Whiting as an independent Non-
Executive Director. This Committee continues to actively seek new Non-Executive appointments.
Votes at General Meetings
All resolutions put to the AGM held on 23 August 2018 were passed by majorities of not less than 90% of the votes cast.
The most recent results for the Group, together with Annual Reports for the preceding ten years and notices of all General
Meetings, can be found on the Group’s website.
Roles and Responsibilities of Directors
The 2019 Annual Report includes, at pages 32 to 33,
descriptions of the individual roles and responsibilities of
the Chairman, Chief Executive Officer and other Directors.
The Board and its Committees
Board composition
The Board is currently comprised of the Non-Executive
Chairman, five Executive Directors and two Non-
Executive Directors.
The roles of Chairman and Chief Executive Officer are
distinct, set out in writing and agreed by the Board. The
Chairman is responsible for the effectiveness of the Board
and ensuring communication with shareholders, and the
Chief Executive Officer is accountable for the management
of the Group.
Non-Executive Directors constructively challenge and
assist in the development of strategy. They scrutinise the
performance of management in meeting agreed goals and
objectives and monitor the reporting of performance.
The Board has not appointed a Senior Independent Non-
Executive Director, but currently this role is performed by
the Chairman.
Evolution of governance framework
In March 2018 the QCA Code was formally selected as the
appropriate recognised corporate governance code to be
applied for the purposes of AIM Rule 26. The Board will
monitor the requirements of this code on an annual basis
and revise its governance framework as appropriate as the
Group evolves.
As part of ongoing governance efforts, the Group
decided in the year ended 31 March 2019 that an extra
Committee should be formed to review risk throughout
the organisation. In March 2019, the first sitting of this
Risk Committee took place. The Committee was formed
to establish and review that the Group are performing
risk management throughout the organisation (and,
to emphasise the point, not trying to perform the risk
management itself).
As the Group continues to grow the Board fully recognises
both the importance and the need of the governance
framework to continue to evolve, as evidenced in
very recent times by additional consideration of
matters reserved for the Board, the newly created Risk
Committee and external advice being sought to assist
the Remuneration Committee in making its decisions.
The Company Secretary is J Thorne, a solicitor of over 25
Consideration of the need to further enhance the
years standing, who was appointed to the role on 27 July
governance framework will attract ongoing focus with
2017. He is not a Director of the Group.
the Group.
To deal with specific aspects of the Group’s affairs, the
Board has formed certain Committees. Each of these
Committees is governed by terms of reference available
upon request from the Company Secretary.
Details of the membership, roles, responsibilities and
activities of the Audit, Remuneration and Nomination
Committees are described in more detail in the individual
Committee reports commencing on page 46 of the 2019
Annual Report. The Chair of each Committee reports to the
Board on the activities of that Committee.
Principle 10 – Communicate how the company
is governed and is performing by maintaining a
dialogue with shareholders and other relevant
stakeholders
A range of fora exist at which the functioning of the Group
is critically appraised and where opportunities exist for
stakeholders to challenge management and hold them to
account for the Group’s performance.
44
45
D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance Corporate governance
Audit Committee report
Audit Committee membership
Peter Simmonds (Committee Chairman)
Roger McDowell (resigned 31 March 2019)
Peter Whiting (appointed 2 July 2018)
Dear Shareholder
I am pleased to present the report of the Audit Committee
for the year ended 31 March 2019.
The Audit Committee comprises two Non-Executive
Directors of the Company, Peter Simmonds and Peter
Whiting. Peter Whiting replaces Roger McDowell, who
resigned as a Non-Executive Director at the year end. The
Committee is chaired by Peter Simmonds and met twice
during the year under review. It operates under formal
Auditor Independence
To ensure auditor independence, consideration is given
to their integrity and the objective approach of the audit
process. The use of non-audit services is not considered
to be significant and amounts paid in respect of these are
disclosed in note 6.
terms of reference, which are available on request from
I am satisfied that the Committee has satisfactorily
the Company Secretary or at the AGM. The Committee
discharged its duties in the year in accordance with its terms
provides a forum for reporting by the Group’s auditors. By
of reference, which are reviewed annually.
Peter Simmonds
Chair of the Audit Committee
24 June 2019
invitation, the meetings are also attended by the CEO and
CFO of the Company.
The Audit Committee is responsible for reviewing a wide
range of financial matters including ensuring that the
financial performance of the Group is adequately measured
and controlled, correctly represented, reported to and
understood by the Board. The Audit Committee advises
the Board on the appointment of external auditors and on
their remuneration, both for audit and non-audit work, and
discusses the nature and scope of their audit.
The Audit Committee meets the auditors at least once a
year without any Executive Directors present.
The Audit Committee includes one financially qualified
member as recognised by the Consultative Committee of
Accountancy Bodies. All Audit Committee members are
expected to be financially literate. Following the above, the
Audit Committee has recommended to the Board that RSM
UK Audit LLP is re-appointed.
Corporate governance
Nomination Committee report
The two main issues that the Audit Committee are
concerned with are in relation to revenue recognition and
the carrying value of goodwill. The Committee review the
Group’s revenue recognition policies to ensure they are
compliant with current accounting standards, noting this is
the first year that IFRS 15 has been adopted by the Group.
They also review revenue streams in relation to various
customers to ensure that the carrying value of goodwill in
Nomination Committee membership
Peter Simmonds (Committee Chairman)
Roger McDowell (resigned 31 March 2019)
Peter Kear (CEO)
Peter Whiting (appointed 2 July 2018)
Dear Shareholder
In relation to succession planning, the Nomination
Committee keeps under review, and takes appropriate
action to ensure, orderly succession for appointments to
the Board and to senior management, thereby maintaining
an appropriate balance of skills and experience within the
Group and on the Board. With regards to Non-Executive
Directors, the Committee considers, amongst other factors,
their other significant outside commitments prior to making
the financial statements remains supported.
I am pleased to present the report of the Nomination
recommendations. This is designed to ensure that they
Committee for the year ended 31 March 2019.
have sufficient time to meet what is expected of them and
The Nomination Committee comprises three Directors;
keeps any changes to these commitments under review.
two Non-Executives, myself and Peter Whiting, and one
I am satisfied that the Nomination Committee has
Executive Director, Peter Kear. In the performance of its
satisfactorily discharged its duties in the year in
duties, the Committee held three meetings in the year.
accordance with its terms of reference, which are reviewed
on an annual basis.
Peter Simmonds
Chair of the Nomination Committee
24 June 2019
The principal activity of the Nomination Committee in the
year was leading the recruitment process and ultimately
recommending the appointment of a new Non-Executive
Director (Peter Whiting).
The process included a merit-based assessment based on
objective criteria having regard to the Group’s current and
future requirements.
The Board’s policy is to ensure that all appointments are
merit-based and based on clear and objective criteria,
giving due regard to equality of opportunity, and to promote
inclusion and diversity. The Board notes that achieving
diversity in the technology sector is challenging, having
regard to the available pool of individuals with the right
skills, experience and talent. Given the size of the Board
and the Group, the Nomination Committee does not
currently set any measurable objectives for implementing a
diversity policy, but it acknowledges the role of the Board in
promoting diversity, including gender diversity, throughout
the Group. Currently there is one female member of the
Board, representing 12.5% of Board membership.
46
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance Corporate governance
Remuneration Committee report
Corporate governance
Directors’ Remuneration Report
Remuneration Committee membership
Peter Whiting (Chair, appointed 2 October 2018)
Roger McDowell (resigned 31 March 2019)
John Lythall
Peter Simmonds
on performance, designed to align executive pay with
shareholder interests. In this respect, the Committee has
assessed the performance of Executive Directors for the
year reported, set performance targets for the following
financial period and made recommendations to the Board
on the overall package for Executive Directors.
Dear Shareholder
I am satisfied that the Committee has appropriately
I am pleased to introduce the Directors’ Remuneration
discharged its duties in the year in accordance with its
Report for the year ended 31 March 2019.
responsibilities and encourage you to read the Directors
Remuneration Report on the following pages.
Peter Whiting
Chair of the Remuneration Committee
24 June 2019
The Committee consists of three Non-Executive Directors;
Peter Simmonds, John Lythall and me as Chair. Roger
McDowell resigned from the Committee and as a
Non-Executive Director at the year end. The Committee’s
terms of reference require it to meet not less than once
each year. The Committee met four times in the year
ended 31 March 2019. It is responsible for reviewing
and determining the policy of the Group on executive
remuneration including specific remuneration packages
for each of the Executive members of the Board, pension
rights and compensation payments. The Committee
is also responsible for monitoring compliance with the
implementation by the Group of the legal requirements
and, so far as reasonably practical, recommendations and
guidelines relating to Directors’ remuneration.
None of the Committee has any personal financial
interest (other than as shareholders or as noted in the
Directors’ report), conflicts of interests arising from cross-
directorships or day-to-day involvement in running the
business. The Committee makes recommendations to the
Board. No Director plays any part in any discussion about
his or her own remuneration.
For 2018/2019, the Remuneration Committee has
continued to operate a simple remuneration structure
made up of basic salary, performance-related bonuses,
share options, benefits and pensions. As previously, a
significant proportion of executive remuneration is based
This report complies with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 as amended in 2013, the provisions of the QCA Corporate Governance Code 2018 and the Listing Rules.
The report is in two sections:
The Directors remuneration policy which sets out the Company’s current policy on remuneration for Executive and
Non-Executive Directors; and
The Directors’ Remuneration Report. This section sets out details of how the remuneration policy was implemented
for the year ended 31 March 2019.
Directors’ remuneration policy
Executive remuneration packages are prudently designed to attract, motivate and retain Directors of the high calibre needed
to maintain the Company’s position as a market leader and to reward them for enhancing value to shareholders. The
performance measurement of the Executive Directors and key members of senior management, and the determination of
their annual remuneration package are undertaken by the Committee. The remuneration of the Non-Executive Directors is
determined by the Board within limits set out in the Articles of Association.
The Company’s policy is that a substantial proportion of the potential remuneration of the Executive Directors should be
performance related. The performance criteria set should motivate the executive directors to create value for the shareholders.
There are five main elements of the remuneration package for Executive Directors and senior management:
Element of remuneration
Link to Group strategy
Operation
Framework
Base salary
Ensures that the company
Base salary is paid monthly
An Executive Director’s salary is determined by
can recruit and retain
and reviewed annually, with
the Remuneration Committee in March of each
high-quality executives to
any increases applying from
year and when an individual changes position
deliver on the company
1 April.
or responsibility. In deciding appropriate levels,
strategy in the interest of
the shareholders.
the Remuneration Committee considers the
Company as a whole and relies on objective
research which gives up to date information on a
comparable group of companies.
Benefits
Ensures that the Company
Benefits principally
In relation to health care and death in service
can recruit and retain
high-quality executives to
comprise private healthcare
and death in service
benefits, premiums are paid by the Company
to an external broker to arrange cover, in line
deliver on the company
insurance. In addition, two
with other Group employees. These benefits are
strategy in the interest of
Executive Directors receive
standard for all Group employees.
the shareholders.
company cars.
The Company offers company cars / car
allowances to a number of employees across
the organisation.
Annual bonus
Rewards and incentivises
The Committee sets annual
The Remuneration Committee sets bonus plans
the Executive Directors
performance targets, linked
for executive directors based upon achieving a
for achievement of
strategic objectives.
to strategic objectives and
number of pre- defined growth targets including
risk management. Bonus
revenue and EPS.
payments in respect of a year
are made in June, or later if
any element is deferred.
48
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Directors’ Remuneration Report (continued)
Element of remuneration
Link to Group strategy
Operation
Framework
Share option plan
Aligns the interests of the
The Remuneration
The share option plans are subject to rules
Executive Directors with
Committee has discretion
and limits approved by shareholders in general
the interest of the long
to make option grants
meeting. Options are granted at an exercise
term shareholders as the
to Executive Directors
price based on the mid-market price of ordinary
options only deliver value if
and other staff, subject
shares on the day prior to the date of grant. Any
the share price rises.
to the scheme rules, and
exercise is subject to satisfaction of the specified
Consultation with shareholders
The Remuneration Committee is committed to an ongoing dialogue with shareholders and seeks the views of significant
shareholders when any major changes are being made to remuneration arrangements. The Committee takes into account
the views of significant shareholders when formulating and implementing the policy.
Consultation with employees
The Board and the Remuneration Committee did not consult with employees when formulating and implementing the policy.
to determine appropriate
performance conditions defined.
Service contracts and letters of appointment
performance conditions.
It is the Company’s policy that Executive Directors should have contracts with an indefinite term providing for a maximum of
Pension
Ensures that the Company
Pension contributions are
Executive Directors are members of the
can recruit and retain
made by the Company to
Company Money Purchase pension scheme.
one year’s notice.
Executive Directors
high-quality executives to
a defined contribution
deliver on the Company
scheme operated by third
strategy in the interest of
the shareholders.
party providers.
To the extent that contributions to the Company
scheme are restricted by HMRC limits, the
Company contributes 6% of the Director’s salary
providing the Director contributes a minimum of
4% of his or her salary by way of salary sacrifice.
There are no unfunded pension promises or
similar arrangements for Directors. There were 5
Directors in the scheme in 2019 (2018:5).
P Kear and J Dodkins have Directors’ service agreements which can be terminated on twelve months’ notice. These
agreements were dated 29 August 1997. C Warren has a service agreement which can be terminated on 3 months notice
dated 1 June 2007. M Boxall has a service agreement which can be terminated on 3 months notice dated 1 November
2015. M Tod has a service agreement which can be terminated on 4 weeks notice dated 4 April 2016.
Non-Executive Directors
P Simmonds, J Lythall and P Whiting each have an agreement for 12 months. The fees of the Non-Executive Directors are
determined and confirmed by the full Board excluding (in each case) the Non-Executive Director concerned.
Chairman and Non-
Executive Director fees
Ensures that the Company
Fees for Non-Executive
A basic fee is set for normal duties,
can recruit and retain a
Directors are set by the
commensurate with fees paid for similar roles
high-quality Chairman and
Board (excluding Non-
in other similar companies, taking account of
Non-Executive Directors
Executive Directors). Fees
the time commitment, responsibilities, and
to deliver on the company
are paid monthly or quarterly.
committee position(s). Supplementary fees
strategy in the interest of
the shareholders.
are paid for any additional duties at fixed day
rates. Non-Executive Directors are not eligible
for pensions, incentives, bonus or any similar
payments other than normal out-of-pocket
expenses incurred on behalf of the business.
Compensation for loss of office is not payable to
Non-Executive Directors.
Remuneration policy considerations
Recruitment
The Company’s Nomination Committee is responsible for leading the process for Board appointments and making
recommendations to the Board. Refer to the report of the Nomination Committee for details.
Policy on Director shareholdings
The Company has no policy on Director shareholdings.
Outside appointments
Executive Directors are entitled to accept appointments outside the Company providing that the Chairman’s permission is
sought and fees in excess of £20,000 from all such appointments are accounted for to the Company.
Aggregate Directors’ remuneration
The total amounts for Directors’ remuneration were as follows:
Emoluments (Fees / basic salary, benefits and annual bonus)
Money purchase pension contributions
IFRS 2 share-based payment charge
Employer’s National Insurance
Total
2019
£000
1,615
44
84
1,743
217
1,960
2018
£000
1,223
37
66
1,326
162
1,488
Loss of office payments
Four directors (2018: nil) exercised 1,388,864 options during the year with gains on exercise of share options during the year
In the event of early termination, all of the Directors contracts provide for compensation up to a maximum of basic salary
totalling £2,471k (2018: nil).
plus benefits for the notice period.
Wider staff employment conditions
The Remuneration Committee considers pay and employment conditions for other senior Executives and staff members of
the Group when designing and setting Executive remuneration. Underpinning all pay is an intention to be fair to all staff of
the Group, taking into account the individual’s seniority and local market practices.
There are no other long term incentive schemes.
50
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D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Directors’ Remuneration Report (continued)
Single figure for the total remuneration (audited)
Directors share options
Fees/basic
salary
£000
Benefits
Bonus
Sub total
Pension
£000
£000
£000
£000
Total
2019
£000
Total
2018
£000
31 March 2019
Executives
P Kear
J Dodkins
C Warren
M Boxall
M Tod
Non-Executives
P Simmonds
J Lythall
R McDowell (resigned 31/3/19)
P Whiting (appointed 2/7/18)
Total
177
138
117
165
145
50
20
15
34
861
26
15
3
2
2
-
7
-
-
55
177
138
117
142
125
-
-
-
-
699
380
291
237
309
272
50
27
15
34
1,615
Remuneration of highest paid Director
Remuneration
Company contributions to money purchase pension schemes
10
8
7
10
9
-
-
-
-
44
390
299
244
319
281
50
27
15
34
1,659
328
229
172
239
209
35
33
15
-
1,260
2019
2018
380
10
390
319
9
328
Emoluments for the highest paid Director for the year ended 31 March 2019 and 31 March 2018 are included in the table above.
The highest paid Director exercised 435,000 share options during the year (2018: nil) with gains on exercise of those share
options totalling £823k (2018: nil).
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in
the Company granted to or held by the Directors.
Details of options for Directors who served during the year are as follows:
Number at
Number at
P Kear
J Dodkins
C Warren
M Boxall
M Tod
J Lythall
31 March 2018
31 March 2019
Option price
Expiry date
Exercisable from
35,000
400,000
400,000
53,864
150,000
300,000
-
250,000
400,000
-
-
-
-
50,000
300,000
166,667
166,667
166,666
250,000
-
18.5p
51.0p
51.0p
27.85p
90.5p
75.0p
149.0p
149.0p
149.0p
113.0p
51.0p
4 Jan 2020
31 Jul 2025
31 Jul 2025
24 May 2024
22 Jan 2026
2 Nov 2025
13 Aug 2028
13 Aug 2028
13 Aug 2028
26 Jun 2026
31 Jul 2025
07 Jan 2013
31 Jul 2018
31 Jul 2018
24 Jun 2015
22 Jan 2017
2 Nov 2016
1 Jul 2019
1 Jul 2020
1 Jul 2021
26 Jun 2017
31 Jul 2018
P Simmonds, R McDowell, and P Whiting did not hold any share options during the year.
All reductions in options held by Directors between 31 March 2018 and 31 March 2019 have arisen due to the exercising of
options held at 31 March 2018. No options lapsed.
Four Directors exercised options in the year (2018: nil) and the total number of options exercised was 1,388,864 (2018: nil).
The total gain on exercising these options was £2,471k (2018: nil).
The market price of the shares at 31 March 2019 was 257.0p (118.5p at 31 March 2018) and the range in the period under
review was 98.0p to 275.0p.
There have been no variations to the terms and conditions or performance criteria for share options during the financial year.
As the share options have been issued on different dates, they have different performance criteria attached. However, these
performance criteria are in line with increasing Earnings Per Share.
Directors shareholdings and dividends paid to Directors are disclosed in the Directors’ Report on page 55.
Performance graphs
Company share price
3.0
2.5
2.0
1.5
1.0
The graph to the left shows the Company’s share price
performance compared with the performance of the FTSE
AIM All-Share and FTSE SmallCap Index (GTBP) for the last
six years. The FTSE Aim All-Share and FTSE SmallCap Index
(GBP) have been selected for this comparison because it is the
Board opinion that they give a true comparison to its peers.
2014
2015
2016
2017
2018
2019
D4t4 Solutions plc
FTSE AIM
FTSE Small Cap
Peter Whiting
Chair of the Remuneration Committee
24 June 2019
52
53
D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Directors’ Report
The Directors present their annual report and the audited
Under its Articles of Association, the Company has
Directors and Directors’ Interests
financial statements for the year ended 31 March 2019,
authority to issue 50,000,000 ordinary shares.
The Directors who held office during the year and to the date of signing, unless otherwise stated, were as follows:
P J Kear
J L Dodkins
C E Warren
M G Boxall
M L Tod
P A Simmonds
J Lythall
R S McDowell (resigned 31 March 2019)
employees that provide for compensation for loss of office
P Whiting (appointed 2 July 2018)
At the AGM, P Kear, J Lythall and J Dodkins will offer themselves for re-appointment in accordance with the Articles.
The Directors who held office at the end of the financial year had the following interests in the ordinary shares of the
Company as recorded in the register of Directors’ share and debenture interests.
P J Kear
J L Dodkins
C E Warren
M G Boxall
M L Tod
P A Simmonds
J Lythall
R S McDowell
P Whiting
* or date of appointment if later
Interest at
31 March 2019
1,665,752
690,266
225,000
10,000
10,000
311,500
2,213,960
Nil
Nil
Interest at
31 March 2018 *
1,340,752
490,266
129,275
10,000
10,000
301,500
1,913,960
1,550,000
Nil
During the year the Directors received dividends on their shares at the same rate as any other shareholder. Details of share
options can be found on page 53.
which should be read in conjunction with the Strategic Report
on pages 8 to 25. The Corporate Governance Statement set
out on pages 34 to 45 forms part of this report.
Incorporation
There are a number of agreements that take effect, alter
or terminate upon a change of control of the Company
such as commercial contracts, bank loan agreements,
property lease arrangements and employees’ share plans.
D4t4 Solutions Plc is a company incorporated in the United
None of these are considered to be significant in terms
Kingdom under the Companies Act 1985.
of their likely impact on the business of the Group as a
Dividends
The Directors recommend a final dividend of 2.3p (2018:
1.875p) per ordinary share to be paid on 13 September 2019
to ordinary shareholders on the register on 9 August 2019.
Future outlook
The Group’s future outlook and opportunities are referred to
in the Chief Executive Officer report on page 4.
Capital structure
Details of the authorised and issued share capital, together
with details of the movements in the Company’s issued
share capital during the year are shown in note 22. The
Company has one class of ordinary shares which carry no
right to fixed income. Each share (other than own shares
held in treasury) carries the right to one vote at general
meetings of the Company.
There are no specific restrictions on the size of a holding
nor on the transfer of shares, which are both governed by
the general provisions of the Articles of Association and
prevailing legislation. The Directors are not aware of any
agreements between holders of the Company’s shares that
whole. Furthermore, the Directors are not aware of any
agreements between the Company and its Directors or
or employment that occurs because of a takeover bid.
Going Concern
The Group’s business activities, together with the factors
likely to affect its future development, performance and
position are set out above and the risks and uncertainties
summarised. The Group and Company has sufficient
financial resources to cover budgeted future cash-
flows and also has contracts in place with a number of
customers and suppliers across different geographic areas
and industries. As a consequence of these factors, the
Directors believe that the Group is well placed to manage
its business risks successfully.
Having reviewed the future plans and projections for
the business, the Directors believe that the Group and
Company and its subsidiary undertakings have adequate
resources to continue in operational existence for the
foreseeable future. For this reason, they continue to
adopt the going concern basis in preparing the financial
may result in restrictions on the transfer of securities or on
statements.
voting rights.
Details of employee share schemes are set out in note 27.
In accordance with the Companies Act s414c(11)
information in relation to the business and risks is shown in
No person has any special rights of control over the
the Strategic Report.
Company’s share capital and all issued shares are
Supplier Payment Policy
fully paid.
With regard to the appointment and replacement of
Directors, the Company is governed by its Articles of
Association, the Companies Acts and related legislation.
The Articles themselves may be amended by special
resolution of the shareholders. The powers of Directors are
described in the Main Board Terms of Reference, copies
of which are available on request, and the Corporate
Governance Statement on page 35.
It is Company policy to pay all claims from suppliers
according to agreed terms of payment upon receipt of a
valid invoice which is materially correct. The Company
does not follow a code on standard payment practice. At
31 March 2019 the Company had 71 days (2018: 65 days)
of outstanding liabilities to creditors.
54
55
D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Directors’ Report (continued)
Substantial Holdings
Financial Instruments
As far as the Directors are aware, as at 31 May 2019, the only holdings of 3% or more of the Company’s issued share
The Group’s financial risk management objectives and policies are discussed on page 93 within note 29 to the accounts.
capital are the following:
Canaccord Genuity Wealth Management
Herald Investment Management
Ennismore Fund Management
J Lythall Esq
Otus Capital Management
P Kear Esq
Banque de Luxembourg
M Ward Esq
Acquisition of the company’s own shares
Number of
ordinary shares
5,622,000
2,724,800
2,329,981
2,213,960
1,974,839
1,665,752
1,350,000
1,283,532
%
14.33
6.95
5.94
5.64
5.04
4.25
3.44
3.27
At the end of the year, the Directors had authority, under the shareholders’ resolution of 23 August 2018, to purchase
Branch operations
The Group has branch operations located in Chennai, India.
Political and Charitable Contributions
The Group made no political contributions or charitable donations during the year (2018: nil).
Insurance
The Group holds Directors and Officers Liability insurance.
Disclosure of Information to the Auditor
In the case of each of the persons who are Directors of the Company at the date when this report was approved:
so far as each of the Directors are aware, there is no relevant audit information (as defined in the Companies Act 2006)
of which the Company’s auditor is unaware; and
each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware
of any relevant audit information (as defined) and to establish that the Company’s auditor is aware of that information.
through the market up to 3,801,320 of the Company’s shares at a maximum price of 105% of the average middle market
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
price for the five business days immediately preceding the date of purchase and a minimum price of 2p per share. This
authority expires at the AGM to be held on 22 August 2019. 671,538 shares were purchased and 440,473 shares were sold
in the year ending 31 March 2019.
Own shares are ordinary 2p shares purchased in order to satisfy outstanding option obligations. Sales from own shares are
the shares issued to option holders on exercise of their options. The maximum number of own shares held in the year was
478,880 (2018: 247,815), which represents 1.21% (2018: 0.65%) of the issued share capital.
Employees
The Group has a policy of offering equal opportunities to employees at all levels in respect of the conditions of work.
Throughout the Group it is the Board’s intention to provide employment opportunities and training for disabled people and
to care for employees who become disabled having regard to aptitude and abilities.
Regular consultation and meetings, formal or otherwise, are held with all levels of employees to discuss problems and
opportunities. Information on matters of concern to employees is presented in house.
The Company operates share option Schemes which are open to all employees. The two current Schemes are the D4t4
Solutions Employee Share Options ‘A’ Scheme and the D4t4 Solutions EMI Share Options Scheme. Details of the share
options are laid out on page 91 within note 27 to the accounts.
Treasury Policy
The Group’s operations are funded by cash reserves. The policy of the Group is to ensure that all cash balances earn a
market rate of interest. Bank relationships are maintained to ensure that sufficient cash and unutilised facilities are available
to the Group.
Research and Development
The Group has continued to attach a high priority to research and development throughout the year aimed at the
development of new products and maintaining the technological excellence of existing products.
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of RSM UK Audit LLP as
the auditor of the Company is to be proposed at the forthcoming Annual General Meeting.
By order of the Board
Peter Kear
Chief Executive Officer
Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, TW16 7EF
24 June 2019
56
57
D4t4 Solutions plc Annual Report & Accounts 2019Corporate governance
Corporate governance
Statement of Directors’ responsibilities
Financial Statements
Independent auditors report to the members of D4t4 Solutions plc
The Directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The
Directors are required by the AIM rules of the London Stock Exchange to prepare Group financial statements in accordance
with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and also elected under
Company Law to prepare the Company financial statements in accordance with IFRS as adopted by the EU.
The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the
Group and the Company and the financial performance of the Group. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are
references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.
In preparing the Group and Company financial statements, the Directors are required to:
a.
select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable and prudent;
c.
state whether they have been prepared in accordance with IFRSs adopted by the EU;
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group
and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Opinion
We have audited the financial statements of D4t4 Solutions Plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 March 2019 which comprise of the consolidated income statement, consolidated statement of
comprehensive income, consolidated and company balance sheets, consolidated and company statements of changes
in equity, consolidated and company cash flow statements, and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31 March 2019 and of the group’s profit for the year then ended;
The group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
The parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the Companies Act 2006; and
The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to SME listed entities and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
D4t4 Solutions website.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to
you where:
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
By order of the Board
Key audit matters
Peter Kear
Chief Executive Officer
24 June 2019
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group
and parent company financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the group and parent company financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Group key audit matters
Revenue recognition
Risk
The group has several different revenue streams under product-own IP, product-3rd party, delivery services and support and
maintenance segments. See notes 2, 4 and 5 for further details.
The product segments include revenue of one or more elements of hardware and software and are often included in the
same contract as delivery services and support and maintenance. These transactions are often individually significant to the
58
59
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Financial Statements
Independent auditors report (continued)
results of the group and include an element of judgement in allocating the transaction price between different performance
obligations within a contract. We consider there to be a significant risk around the completeness of some elements of
revenue as performance obligations within a contract often have different recognition periods. We also consider there to
be a significant risk of misstatement of the financial statements related to transactions occurring close to the year end, as
transactions could be recorded in the wrong financial period (cut-off). As such we have determined revenue recognition to
be a key audit matter.
Our response
In order to address the risk of misstatement related to cut-off in revenue recognition, we performed testing, focusing in
particular on the major contracts signed around both the current year and prior year ends, we tested balances recognised
in the group’s statement of financial position and tested individual transactions occurring either immediately before or after
the year end. Our tests of detail focused on transactions occurring within proximity of the year end across these segments,
obtaining evidence to support the appropriate timing of revenue recognition, based on terms and conditions set out in sales
contracts and delivery documents.
In addition, for material contracts arising during the year, which have with multiple performance obligations, we assessed
whether the transaction price had been appropriately allocated to different performance obligations, by reference to
underlying pricing documentation. We also performed tests of details on accrued revenue, deferred revenue and trade
receivables balances recognised at 31 March 2019. We also reviewed disclosure in the financial statements of the revenue
recognition policies and key estimates and judgements in respect of revenue recognition.
Parent company key audit matters
We have not identified any key audit matters in respect of the company statement of financial position.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and
extent of our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial
statements as a whole, could reasonably influence the economic decisions of the users we take into account the qualitative
nature and the size of the misstatements. During planning materiality for the group financial statements as a whole was
calculated as £515,000 which was not significantly changed during the course of our audit. Our materiality for the parent
company financial statements as a whole was calculated as £480,000, which was not significantly changed during the
course of our audit. We agreed with the Audit Committee that we would report to them all unadjusted differences in excess
of £10,000, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Group and its control environment and assessing the risks of
material misstatement. The financial statements were audited on a consolidated basis using Group materiality. The scope of
our audit covered 100% of both consolidated profit before tax and consolidated net assets.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement (set out on page 58), the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
David Clark
Senior Statutory Auditor
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London EC4A 4AB
24 June 2019
60
61
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Consolidated income statement for the year ended 31 March 2019
Consolidated statement of changes in equity attributable to Equity
Holders of the Parent for the year ended 31 March 2019
Continuing operations
Revenue
Cost of sales
Gross profit
Administration expenses
Other operating income
Profit from operations
Finance income
Finance costs
Profit before tax
Tax
Attributable to equity holders of the parent
Earnings per share from continuing operations
attributable to equity holders of the parent
Statutory
Basic
Diluted
Adjusted
Basic
Diluted
Notes
4, 5
8
9
9
10
13
2019
£’000
25,239
(10,932)
14,307
(8,022)
57
6,342
9
(8)
6,343
(511)
5,832
14.78p
14.53p
14.12p
13.89p
2018
restated
£’000
18,427
(7,987)
10,440
(7,151)
67
3,356
1
(31)
3,326
(424)
2,902
7.62p
7.30p
9.21p
8.82p
Consolidated statement of comprehensive income for the year
ended 31 March 2019
Attributable to equity holders of the parent
Other comprehensive income:
Items that will not be reclassified to profit or loss
Gains on property revaluation
16
Income tax on items that will not be reclassified to profit or loss
Total comprehensive income for the year attributable
to equity holders of the parent
2019
£’000
5,832
70
-
5,902
2018
restated
£’000
2,902
706
-
3,608
Balance at 1 April 2017
Dividends paid
Purchase of own shares
Notes
12
23
Issue of new shares -
exercise of share options 22, 24
Settlement of share
based payments
Share-based payment charge 27
Deferred tax on outstanding
share options
Transactions with
equity holders
11
Profit for the year (restated)
Other comprehensive income
Total comprehensive income
Share
capital premium
1,923
Share Merger Revaluation
reserve
323
reserve
5,804
759
-
-
6
-
-
-
6
-
-
-
-
-
-
-
49
113
-
-
-
-
-
-
49
113
-
-
-
-
-
-
-
-
-
-
-
-
-
-
706
706
Own
shares
(6)
Equity
reserve
242
Retained
earnings
8,504
Total
£’000
17,549
-
(302)
-
-
-
-
-
-
(51)
-
-
(884)
-
-
(20)
100
(884)
(302)
117
(20)
100
(58)
4
(54)
(302)
(109)
(800)
(1043)
-
-
-
-
-
-
2,902
-
2,902
2,902
706
3,608
Balance at 1 April 2018
765
1,972
5,917
1,029
(308)
133
10,606
20,114
Dividends paid
Purchase of own shares
12
23
Issue of new shares -
exercise of share options 22, 24
Settlement of share
based payments
Share-based payment charge 27
Deferred tax on outstanding
share options
Transactions with
equity holders
11
Profit for the year
Other comprehensive income
Total comprehensive income
Foreign exchange and
other movements
Balance at 31 March 2019
-
-
-
-
-
-
29
652
60
-
-
-
-
-
-
-
-
-
29
652
60
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70
70
-
(1,469)
-
650
-
-
-
-
(26)
(48)
-
(49)
(980)
-
-
(351)
162
178
(980)
(1,469)
715
251
162
129
(819)
(123)
(991)
(1,192)
-
-
-
-
-
-
-
10
5,832
-
5,832
5,832
70
5,902
16
15,463
16
24,840
-
794
-
2,624
-
5,977
-
1,099
-
(1,127)
62
63
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Consolidated statement of financial position as at 31 March 2019
Consolidated cash flow statement for the year ended 31 March 2019
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax assets
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Tax liabilities
Borrowings
Non-current liabilities
Borrowings
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Revaluation reserve
Own shares
Equity reserve
Retained earnings
Attributable to the equity holders of the company
Notes
14
15
16
11
18
19
20
21
21
11
22
22
24
25
23
26
2019
£’000
8,696
1,014
4,106
831
14,647
6,275
45
10,996
17,316
31,963
(6,774)
(133)
-
(6,907)
-
(216)
(216)
(7,123)
24,840
794
2,624
5,977
1,099
(1,127)
10
15,463
24,840
2018
restated
£’000
8,696
1,261
3,892
389
14,238
20,544
590
4,634
25,768
40,006
(18,575)
(291)
(695)
(19,561)
(85)
(246)
(331)
(19,892)
20,114
765
1,972
5,917
1,029
(308)
133
10,606
20,114
These financial statements were approved by the Board of Directors and authorised for issue on 24 June 2019
and were signed on its behalf by:
Peter Kear
Chief Executive Officer
Company registration number: 01892751 (England and Wales)
Operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Finance income
Finance expense
Share-based payments
Settlement of share based payments
Gain on sale of property, plant and equipment
Operating cash flows before movements in working capital
Decrease / (Increase) in receivables
Decrease / (Increase) in inventories
(Decrease) / Increase in payables
Cash generated from operations
Income taxes paid
Net cash generated from operating activities
Investing activities
Interest received
Purchase of property, plant and equipment
Net cash used in investing activities
Financing activities
Dividends paid
Repayment of borrowings
Interest paid
Payments to finance lease creditors
Purchase of own shares
Exercise of share options
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
2019
£’000
6,343
315
247
(9)
8
162
-
(3)
7,063
14,269
545
(11,811)
10,066
(983)
9,083
9
(459)
(450)
(980)
(763)
(8)
(17)
(1,469)
966
(2,271)
6,362
4,634
10,996
2018
restated
£’000
3,326
251
246
(1)
31
100
(20)
-
3,933
(16,275)
(249)
13,699
1,108
(400)
708
1
(844)
(843)
(884)
(414)
(31)
(7)
(302)
117
(1,521)
(1,656)
6,290
4,634
64
65
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Company statement of changes in equity attributable to Equity
Holders of the Parent for the year ended 31 March 2019
Company statement of financial position as at 31 March 2019
Balance at 1 April 2017
Dividends paid
Purchase of own shares
Notes
12
23
Issue of new shares -
exercise of share options 22, 24
Settlement of share
based payments
Share-based payment charge 27
Deferred tax on outstanding
share options
Transactions with
equity holders
11
Profit for the year (restated)
Other comprehensive income
Total comprehensive income
Share
capital premium
1,923
Share Merger Revaluation
reserve
323
reserve
5,804
759
-
-
6
-
-
-
6
-
-
-
-
-
-
-
49
113
-
-
-
-
-
-
49
113
-
-
-
-
-
-
-
-
-
-
-
-
-
-
706
706
Own
shares
(6)
Equity
reserve
242
Retained
earnings
8,663
Total
£’000
17,708
-
(302)
-
-
-
-
-
-
(51)
-
-
(884)
-
-
(20)
100
(884)
(302)
117
(20)
100
(58)
4
(54)
(302)
(109)
(800)
(1,043)
-
-
-
-
-
-
3,316
-
3,316
3,316
706
4,022
Balance at 1 April 2018
765
1,972
5,917
1,029
(308)
133
11,179
20,687
Dividends paid
Purchase of own shares
12
23
Issue of new shares -
exercise of share options 22, 24
Settlement of share
based payments
Share-based payment charge 27
Deferred tax on outstanding
share options
Transactions with
equity holders
11
Profit for the year
Other comprehensive income
Total comprehensive income
-
-
-
-
-
-
29
652
60
-
-
-
-
-
-
-
-
-
29
652
60
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70
70
-
(1,469)
-
650
-
-
-
-
(26)
(48)
-
(49)
(980)
-
-
(351)
162
179
(980)
(1,469)
715
251
162
130
(819)
(123)
(990)
(1,191)
-
-
-
-
-
-
6,906
-
6,906
6,906
70
6,976
Balance at 31 March 2019
794
2,624
5,977
1,099
(1,127)
10
17,095
26,472
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investment in subsidiaries
Deferred tax assets
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Tax liabilities
Borrowings
Non-current liabilities
Borrowings
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Revaluation reserve
Own shares
Equity reserve
Retained earnings
Attributable to equity holders of the parent
The Company’s profit for the year was £6.9m (2018 restated: £3.3m).
2019
£’000
8,696
1,014
4,106
273
347
14,436
8,441
13
10,996
19,450
33,886
(7,065)
(133)
-
(7,198)
-
(216)
(216)
(7,414)
26,472
794
2,624
5,977
1,099
(1,127)
10
17,095
26,472
14
15
16
17
11
18
19
20
21
21
11
22
22
24
25
23
26
2018
restated
£’000
8,696
1,261
3,892
273
186
14,308
21,458
590
4,634
26,682
40,990
(18,986)
(291)
(695)
(19,972)
(85)
(246)
(331)
(20,303)
20,687
765
1,972
5,917
1,029
(308)
133
11,179
20,687
These financial statements were approved by the Board of Directors and authorised for issue on 24 June 2019
and were signed on its behalf by:
Peter Kear
Chief Executive Officer
Company registration number: 01892751 (England and Wales)
66
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D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Company cash flow statement for the year ended 31 March 2019
Notes to the financial statements
Operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Finance income
Finance expense
Share-based payments
Settlement of share based payments
Gain on sale of property, plant and equipment
Operating cash flows before movements in working capital
Decrease / (Increase) in receivables
Decrease / (Increase) in inventories
(Decrease) / Increase in payables
Cash generated from operations
Income taxes paid
Net cash generated from operating activities
Investing activities
Interest received
Purchase of property, plant and equipment
Net cash used in investing activities
Financing activities
Dividends paid
Repayment of borrowings
Interest paid
Payments to finance lease credit ors
Purchase of own shares
Exercise of share options
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
2019
£’000
7,676
315
247
(9)
8
162
-
(3)
8,396
13,017
577
(11,927)
10,063
(980)
9,083
9
(459)
(450)
(980)
(763)
(8)
(17)
(1,469)
966
(2,271)
6,362
4,634
10,996
2018
restated
£’000
3,740
251
246
(1)
30
100
(20)
-
4,346
(16,877)
(249)
13,887
1,107
(400)
707
1
(844)
(843)
(884)
(414)
(30)
(7)
(302)
117
(1,520)
(1,656)
6,290
4,634
1. General information
D4t4 Solutions plc is a public limited company incorporated
and domiciled in England and Wales and quoted on the
AIM Market, hence there is no ultimate controlling party.
Details of substantial shareholdings are shown in the
Directors’ report on page 56.
The address of its registered office, registered number and
principal place of business is disclosed on the inside cover
of the financial statements.
The financial statements of D4t4 Solutions plc and its
subsidiaries (the Group) for the year ended 31 March 2019
were authorised and issued by the Board of Directors
on 24th June 2019 and the Consolidated Statement of
Financial Position was signed on the Board’s behalf by
Peter Kear.
2. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRSs)
adopted by the European Union and the Companies Act
2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the
historical cost convention, with the exception of land and
buildings which is held at valuation.
The presentation and functional currency of the financial
statements is British Pounds and amounts are rounded to
the nearest thousand pounds.
Going concern
The Group and Company’s business activities, together
with the factors likely to affect its future development,
performance and position and the risks and uncertainties
are presented in the Strategic Report on pages 28 to 30.
The Group and Company have sufficient financial resources
to cover budgeted future cashflows, together with contracts
with a number of customers and suppliers across different
geographic areas and industries. As a consequence, the
Directors believe that the Group and Company are well
placed to manage their business risks successfully.
Having reviewed the future plans and projections for
the business, the Directors believe that the Group and
Company have adequate resources to continue in
operational existence for the foreseeable future. For this
reason, they continue to adopt the going concern basis in
preparing the financial statements.
Adoption of new and revised standards
Standards, amendments and interpretations effective in
the period to 31 March 2019 (all effective 1 January 2018,
not early adopted last year):
IFRS 9 (New Standard)
Financial Instruments
IFRS 15 (New Standard) Revenue from Contracts
with Customers
IFRIC 22 (Amendment)
Foreign Currency Transactions
and Advance Consideration
IFRS 2 (Interpretation)
Share Based Payments
IAS 40 (Interpretation)
Investment Property
IFRS 9 and IFRS 15 are discussed below separately. No
significant impact is foreseen by the Group in respect of all
other amendments and interpretations.
IFRS 9 is effective for the year ending 31 March 2019
onwards. IFRS 9 introduces:
New requirements for the classification and measurement
of financial assets and financial instruments;
A new model for recognising provisions based on
expected credit losses; and
Simplified hedge accounting by aligning hedge
accounting more closely with an entity’s risk
management methodology.
Following a review and further impact assessment, it was
concluded that the Group’s use of financial instruments is
limited to short term trading balances such as receivables
and payables. The Group has no financial borrowings
and does not have complex financial instruments in
place. Furthermore, there have also been no material
changes arising from the adoption of the expected losses
impairment model or loss allowance provisions made in
respect of trade receivables and amounts due from Group
Companies. On this basis the Group have concluded that
adoption does not have a material impact on either the
Income Statement or Statement of Financial Position of the
Group or Company.
IFRS 15 is also effective for the year ended 31 March
2019 onward. The Group applied the standard for the first
time in the half year report ending 30 September 2018
retrospectively under a full restatement approach, which
has resulted in a restatement of the year end 31 March
2018 results (see note 30 for full details).
IFRS 15 replaces existing accounting standards used
to determine the measurement and timing of revenue
recognition and requires an entity to align the recognition of
revenue to the transfer of goods and services at an amount
that the entity expects to be entitled to in exchange for
those goods and services.
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D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
Standards, amendments and interpretations to existing
standards that have not been early adopted by the Group
(all effective 1 January 2019):
IFRS 16
Leases
Various
Annual Improvements to IFRSs 2015 – 2017 Cycle
IFRIC 23 Uncertainty over Income Tax Treatments
IAS 28
Investments in Associates and Joint Ventures
IAS 19
Employee Benefits (Plan Amendment,
Curtailment or Settlement)
IFRS 16 will be effective for the year ending 31 March
2020. On the adoption of IFRS 16, lease arrangements
will give rise to a right-of-use asset and a lease liability for
future lease payables. The asset will be depreciated on
a straight line basis over the life of the lease. Interest will
be recognised on the lease liability, resulting in a higher
interest expense in the earlier years of the lease term. The
total expenses recognised in the Income Statement over
the life of the lease will be unaffected by the new standard.
However, IFRS 16 will result in the timing of lease expenses
recognition being accelerated for leases which would be
currently accounted for as operating leases. The Group has
one leased property in India, details of which are in note 28,
and the Directors are currently reviewing the requirements
of the new standard to determine its impact.
The Directors anticipate that the adoption of IFRS 16 will
not have a material impact on the financial statements of
the Group.
The Directors do not expect the adoption of the other
standards, interpretations and amendments in future
periods to have any material impact on the financial
statements of the Group.
Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and its subsidiaries
made up to the reporting date.
Investees are classified as subsidiaries where the Company
has control, which is achieved where the Company has
the power to govern the financial and operating policies
of an investee entity, exposure to variable returns from the
investee and the ability to use its power to affect those
variable returns. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
The consolidated financial statements incorporate the
results of business combinations using the acquisition
method. In the statement of financial position, the
acquiree’s identifiable assets and liabilities are initially
recognised at their fair values at acquisition date. The
results of acquired entities are included in the Consolidated
Statement of Comprehensive Income from the date at
which control is obtained and are deconsolidated from the
date control ceases.
In accordance with Section 408 of the Companies Act
2006 D4t4 Solutions plc is exempt from the requirement to
present its own income statement and related notes that
form a part of these approved financial statements. The
profit of the parent is disclosed in the Company Statement
of Financial Position and Statement of Changes in Equity
for the year.
Property, plant and equipment
The carrying value of these assets is stated at cost
or valuation, less accumulated depreciation and any
impairment loss. Freehold land is not depreciated. The
estimated lives of assets are reviewed annually by the
Board, the lives and values are adjusted as necessary, and
any impairment loss is recognised in the income statement.
Freehold land and buildings are professionally valued
periodically and were last valued at 31 March 2018. The
carrying values are reviewed for impairment when events or
changes in circumstances indicate that the carrying value
may not be recoverable.
The Group makes provision for depreciation so that the
cost less estimated residual value of each asset is written
off by equal instalments over its estimated useful economic
life as follows:
Buildings
- up to 35 years
Leasehold improvements
- up to 10 years
Fixtures and equipment
- up to 4 years
Motor vehicles
- up to 5 years
Revaluation gains/losses are shown on the statement
of comprehensive income. Where losses are greater
than previously recognised gains, these are taken to the
income statement.
Acquisitions
On the acquisition of a business, net fair values are
attributed to the identifiable assets and liabilities acquired.
Where the cost of acquisition exceeds this net fair
value, the difference is treated as purchased goodwill
and capitalised in the Group Statement of Financial
Position in the year of acquisition. If a subsidiary’s assets
are subsequently hived up into the parent then the
corresponding amount of goodwill is capitalised in the
Company Statement of Financial Position too.
Goodwill
Capitalised goodwill is shown in the balance sheet.
Its carrying value is subject to annual review and any
impairment is recognised immediately as a loss which
cannot subsequently be reversed. Goodwill arising on
acquisitions made before the date of transition to IFRS has
been retained at the previous UK GAAP amount subject to
being tested annually for impairment.
Goodwill has arisen from the acquisition of businesses.
Investments in subsidiaries
The carrying value of investments is stated at cost less any
provision for impairment. This value is reviewed annually
by the Board with respect to future cash flows in respect of
revenue streams related to the investment.
Other intangible assets
IPR
On the acquisition of a business, the fair value of IPR is
estimated and capitalised taking into consideration the
software development cycle and the amount of effort
involved between updated versions of the software. The fair
value is amortised over the expected development cycle
which is estimated to be 8 years.
Capitalised IPR is shown in the balance sheet. Its carrying
value is subject to annual review and any impairment
is recognised immediately as a loss which cannot
subsequently be reversed.
Trade name
On the acquisition of a business, the future value of the
trade name of that business is estimated and capitalised.
The fair value is amortised over 10 years.
Impairment of intangibles is reviewed annually with reference
to future cash flows from the specific cash generating units
to which the intangible asset has been allocated.
Inventory policy
Inventories are stated at the lower of cost or net realisable
value. The valuation method for each item of inventory
remains consistent from one accounting period to the next.
Research and development costs
To assess whether research and development expenditure
has generated an intangible asset the Group classifies the
expenditure into two phases, the research phase and the
development phase.
Expenditure on the research phase is recognised as an
expense when it is incurred.
Expenditure on the development phase is recognised as an
intangible asset if, and only if, each of the following can be
demonstrated:
(a) the technical feasibility of completing the asset;
(b) its intention to complete and use or sell the asset;
(c) its ability to use or sell the asset;
(d) how the asset will generate future economic benefit;
(e) the availability of sufficient resources to complete the
development and to use or sell the asset;
(f) the ability to measure reliably the expenditure incurred on
the asset during its development.
The intangible asset is recognised using the cost model
and is carried at its cost less any accumulated amortisation
and any accumulated impairment losses.
Foreign currencies
In line with IAS 21, transactions denoted in foreign
currencies are recorded at an approximation of the
exchange rate ruling on the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated using the rate of exchange ruling
at the balance sheet date and the gains or losses on
translation are included in the profit and loss account.
Similarly, for translation of foreign operations, transactions
are recorded at an approximation of the exchange rate
ruling in the period of consolidation. Monetary assets and
liabilities are translated using the rate of exchange ruling
at the balance sheet date and the gains or losses on
translation are included in the Consolidated Statement of
Changes in Equity.
Profit from operations
Profit from operations is stated before investment income,
finance costs and other gains and losses. Other gains and
losses principally include movements in property valuation
and are included in the Statement of Comprehensive
Income after tax.
Lease commitments
Rentals payable under operating leases are recognised
as a cost on a straight line basis over the life of the lease.
Similarly, rental income arising from operating leases is
credited to income on a straight-line basis over the period
of those leases.
Dividends
Final dividend distribution to the Company’s shareholders is
recognised as a liability in the Group’s financial statements
in the period in which the dividends are approved by the
Company’s shareholders.
Interim and prior period dividends paid are included in the
Statement of Comprehensive Income.
Share-based payments
Periodically the Group offers share options (at the prevailing
market price) to employees. The Group has conformed
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D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
with the requirements of IFRS2 “Share Based Payment” for
share options issued after 7 November 2002 and unvested
at 1 January 2012. Those options are measured at fair
value (using the Black-Scholes model and management’s
best estimates) and are expensed on a straight-line basis
over their vesting period. Options vest only when the
Remuneration committee is satisfied that the vesting
criteria have been met, and are settled subsequently by
equity shares in the parent company and unless the Board,
at its discretion, agrees to settle in cash.
Treasury shares
From time to time the Company purchases its own shares
for the purpose of satisfying the future exercising of
outstanding share options. These shares are held in treasury
and are shown as a reduction in the Company’s reserves.
Own shares
On the acquisition of a business, the accrual for the future
value of own shares contingent upon no warranty claims
being made is classified as equity where there is a fixed
value and hence fixed number of the company’s shares to
be issued. Where the value of the contingent shares is not
fixed at the point of acquisition, these would be treated as a
financial liability under IAS 32.
Pension costs
The Group operates a defined contribution pension
scheme. The assets of the scheme are held separately
from those of the Group in an independently administered
fund. The amount charged against profits represents the
contributions payable to the scheme in respect of the
accounting period.
Taxation
Current tax (UK and foreign) is calculated on the profit for
the year (adjusted for appropriate tax reliefs, allowances,
non-deductible expenses and timing differences) using the
appropriate tax rates and laws that have been enacted or
substantively enacted by the balance sheet date. Deferred
tax is recognised in respect of all material temporary
differences in the treatment of certain items for taxation
and accounting purposes which have arisen but have
not reversed by the balance sheet date. It is recognised
at the expected prevailing rate at the time of reversal,
and is recognised as an asset only to the extent that it is
probable that taxable profits will be available to utilise it. It
is reviewed annually.
Revenue recognition
Revenue is measured at the transaction price received or
receivable from the sale of goods and services in the ordinary
course of the Group’s activities. Revenue is shown net of value
added tax, rebates and discounts and after the elimination of
intercompany transactions within the Group.
The Group recognises revenue as it satisfies its performance
obligations by transferring promised goods and services to
its customers. The Group bases its estimates on historical
results, taking into consideration the type of customer, the
type of transaction and the specifics of each arrangement.
In the course of the year ended 31 March 2019 there has
been a change in the segmental reporting information being
used internally. This change was made to better reflect the
Group’s management reporting based on the integrated core
services of the business. In line with the requirements of
IFRS 8 Segmental Reporting, which requires the disclosure
of segmental reporting information that is actually being used
internally by management, the following segmental reporting
is now in use:
Products – Own IP
D4t4 create, author, market and sell a software product,
Celebrus, focused on the capture of customer data from
all digital channels. This data is then used in applications
that deliver artificial intelligence, customer insight and
analytics, personalisation, decisioning and customer
relationship management.
The Group has also created its own IP in order to create
architecture and deployments for high performance on
premise or cloud solutions that combine hardware, software
and services.
Perpetual licence revenue is recognised upon delivery as
the company has no further obligations to the customer
once the non-refundable licences have been delivered.
Any upgrade to the software will be supplied as part of
an ongoing maintenance contract that the customer may
make. This maintenance contract is covered under the
hosting and support services policy below. Term licences
are recognised upon delivery at the commencement of the
term where the licence is not cancellable during the term.
Products – 3rd Party
D4t4 services are focused on delivering data management
using public and private cloud infrastructure that is
securely designed to ensure our clients can operationalise
data within their organisation. In addition, we design and
build performant platforms for critical business, analytics,
compliance, risk, marketing and artificial intelligence
applications. Where these are on premise data platform
solutions they will include both hardware and third party
software. The revenue for each product is recognised
when the full performance obligation has been satisfied,
typically this is when the hardware and associated third
party software is delivered to the customers designated
premises. This is when control passes to the customer.
Delivery Services
For delivery services the stage of completion is determined
by reference to the time spent as a proportion of the
total time expected. This is because costs are incurred
in proportion to the Group’s progress as it satisfies its
performance obligations.
In relation to time-based projects, time on projects is
recoverable on a time and expenses basis at an agreed
daily rate and is invoiced to the customer in the month of
performance and an associated value is recognised. The
Group has a right to consideration from its customers in
an amount that corresponds directly with the value to the
customer of the Group’s performance completed on a
daily basis.
Support & maintenance
Support and maintenance is typically of a recurring
nature and is made up of hosting, support services and
maintenance. The Group’s efforts are expended evenly
throughout the performance period therefore revenue is
recognised on a straight-line basis over the period of the
contract, normally 12 months.
Bundled goods and services
Products (software and hardware), delivery services and
support and maintenance services are often bundled
together in a contract.
The products and the services are considered to be
separate performance obligations on the basis that the
products can be delivered with or without the hosting and
other services and therefore the products and services are
not interdependent or interrelated with another good or
service. Software and hardware however require combined
delivery to the customer to benefit from them and are
therefore considered to be interdependent and interrelated
and one performance obligation.
Recurring revenues
Licence sales were recognised as described under
Products Own IP above.
Project work comprised an element of what is now
classified as Products Own IP, Products 3rd Party and
Delivery Services revenue. However, as explained in Note
30, IFRS 15 has impacted upon the revenue recognition
policy in this area.
Recurring revenues were recognised as described under
Support and maintenance above.
Partnerships with third party organisations
The Company sells both directly to the customer and
through partnerships. There are two types of partnerships.
The first is where the company acts as principal in the sale
to the partner. The partner then uses the products and
services purchased from the company as part of their sale
to their customer. The second is where the company acts
on an agency basis. Here the company acts as a supply
channel on behalf of the software supplier who dictates
the sell and buy price and provides details of the customer.
In the first case, the revenue will consist of a combination
of licence, project and recurring as defined in the revenue
recognition policy above, and hence is recognised as
defined there. In the second case, where the company acts
on an agency basis, revenue will be recognised at the point
of sale to the end customer.
Recognition of financial instruments
Financial assets and financial liabilities are recognised
when the Company becomes party to the contractual
provisions of the instrument.
Financial assets
Initial and subsequent measurement of financial assets
Cash and cash equivalents
In allocating the consideration to the separate performance
obligations, the standalone selling price is determined by
reference to an internal price book.
Cash and cash equivalents comprise cash at bank and in
hand and other short-term deposits held by the Company
with maturities of less than three months.
The contracted invoice schedule does not always coincide
with the recognition of the income from the sale. Therefore
management have considered the time value of money
and concluded that a financing benefit is provided to the
customer. This is adjusted against revenue and recognised
as interest income over the period of the contract using an
effective interest rate.
Previous segmental analysis
Trade, Group and other receivables
Trade receivables are initially measured at their transaction
price. Group and other receivables are initially measured at
fair value plus transaction costs.
Receivables are held to collect the contractual cash
flows which are solely payments of principal and interest.
Therefore, these receivables are subsequently measured at
amortised cost using the effective interest rate method.
Prior to this year, revenue was classified as being derived from
Financial liabilities and equity
Licence sales;
Project work; and
Financial liabilities and equity instruments are classified
according to the substance of the contractual
72
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D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
default occurring and the expected cash flows on default
based on the ageing of the receivable. The Group has
adopted a simplified approach to calculating its expected
credit loss provision. For intercompany loans that are
repayable on demand, expected credit losses are based on
the assumption that repayment of the loan is demanded at
the reporting date. If the subsidiary does not have sufficient
accessible highly liquid assets in order to repay the loan
if demanded at the reporting date, the parent Company
assesses the expected manner of recovery, applying
discounting to the period in which the cash is realised
where the impact of discounting is material.
Borrowings
Interest bearing bank loans are recorded at the proceeds
received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption
and direct issue costs, are charged to profit or loss over
the period using the effective interest rate method and are
added to the carrying amount of the instrument to the extent
that they are not settled in the period in which they arise.
Borrowing costs
Borrowing costs are recognised as an expense in the period
in which they arise.
Related party transactions
The Company has taken advantage of the exemption
under IAS24 from disclosing related party transactions with
entities that are wholly owned subsidiary undertakings of
the D4t4 Solutions plc Group.
arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of
the company after deducting all of its liabilities.
Initial and subsequent measurement of financial liabilities
Trade, Group and other payables
Trade, Group and other payables are initially measured at
fair value, net of direct transaction costs and subsequently
measured at amortised cost.
Equity instruments
Equity instruments issued by the Company are recorded at
fair value on initial recognition net of transaction costs.
Derecognition of financial assets (including write-offs) and
financial liabilities
A financial asset (or part thereof) is derecognised when the
contractual rights to cash flows expire or are settled, or
when the contractual rights to receive the cash flows of the
financial asset and substantially all the risks and rewards of
ownership are transferred to another party.
When there is no reasonable expectation of recovering a
financial asset it is derecognised (‘written off’).
The gain or loss on derecognition of financial assets
measured at amortised cost is recognised in profit or loss.
A financial liability (or part thereof) is derecognised when
the obligation specified in the contract is discharged,
cancelled or expires.
Any difference between the carrying amount of a financial
liability (or part thereof) that is derecognised and the
consideration paid is recognised in profit or loss.
Impairment of financial assets
An impairment loss is recognised for the expected credit
losses on financial assets when there is an increased
probability that the counterparty will be unable to settle
an instrument’s contractual cash flows on the contractual
due dates, a reduction in the amounts expected to be
recovered, or both.
The probability of default and expected amounts
recoverable are assessed using reasonable and
supportable past and forward-looking information that is
available without undue cost or effort. The expected credit
loss is a probability-weighted amount determined from a
range of outcomes and takes into account the time value
of money.
Trade and other receivables
For trade receivables, expected credit losses are measured
by applying an expected loss rate to the gross carrying
amount. The expected loss rate comprises the risk of a
3. Critical accounting judgements and key sources of
estimation uncertainty
In applying the accounting polices described in note 2
the Directors are required to make judgements, estimates
and assumptions of the carrying values of assets and
liabilities as at the statement of financial position date
and the amounts reported for revenues and expenses
during the year. However, the nature of estimations means
that actual outcomes could differ from those estimates.
These judgements are reviewed on an ongoing basis, and
recognise revisions to accounting estimates in the period
in which we revise the estimate and in any future periods
affected. It is considered that all judgements have an
element of estimation.
Estimates and assumptions
The key assumptions concerning the future and other
key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing
material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Valuation of goodwill and intangible assets
The ongoing valuation of goodwill for the purposes of
determining impairment requires the evaluation of future
cash flows from the cash generating units to which the
goodwill has been allocated. Note 14 shows the carrying
values of the components of goodwill.
Revenue recognition for bundled goods and services
In determining revenue for each of the component elements
of a bundled contract, consideration is given to price books
which are compiled following a review of standard industry
practice and expected gross profit margins.
4. Business and geographical segments
IFRS 8 Operating Segments requires operating segments
to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the
chief operating decision maker to allocate resources to the
segments and assess their performance.
During the year, there has been a change in the way
information is presented to the Board. In the past,
information has been reported to the Board on the basis of:
Licence sales
Project work
Recurring revenues
The Group has now identified four tightly integrated service
lines that are offered to clients. These service lines combine
one or more of 4 types of revenue to deliver on our core
services.
Details of these are laid out in the Strategic Report on
page 19.
Information is now presented to the Board on the revenue
analysis below:
Product - Own IP
Product - 3rd party
Delivery services
Support and maintenance
All revenue streams are recognised on a point in time basis
apart from Support and maintenance which is recognised
over time.
No allocation of other income and costs to these
categories is made because the Directors consider that any
such allocation would be arbitrary and contract sensitive,
as would be any allocation of assets and liabilities.
The segment reporting set out below is consistent with that
provided to the Board of Directors and has been prepared
under both the original segmental reporting analysis and
now the current segmental reporting analysis.
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D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
The revised segmental reporting analysis is as follows:
Previously reported segmented reporting analysis is as follows:
Continuing operations 2019
Group
Continuing operations 2019
Products - Own IP
Products - 3rd party
Delivery services
Support and maintenance
Revenue
Cost of sales
Gross profit
Other operating costs and income
Investing and financing activities
Profit before tax
Major customers (partners) over 10% of revenue
Products - Own IP
Products - 3rd party
Delivery services
Support and maintenance
Total revenue
2019
£’000
9,198
7,349
3,132
5,560
25,239
(10,932)
14,307
(7,965)
1
6,343
2018
restated
£’000
6,805
3,915
2,928
4,779
18,427
(7,987)
10,440
(7,084)
(30)
3,326
2019
£’000
Customer 1
5,576
6,774
1,055
2,206
15,611
2019
£’000
Customer 2
2018
restated
£’000
Customer 1
1,581
-
48
1,102
2,731
4,590
3,226
1,107
1,808
10,731
Sale of goods
Services
Adjustment for agency basis
Reported revenue
Segment result (gross profit)
Other operating costs and income
Investing and financing activities
Profit before tax
Licence
sales
£’000
4,196
-
-
4,196
Project
work
£’000
-
15,483
-
15,483
Recurring
revenues
£’000
-
5,696
(136)
5,560
Total
£’000
4,196
21,179
(136)
25,239
3,666
7,261
3,380
14,307
(7,965)
1
6,343
Major customers (partners) over 10% of revenue
Customer 1
Customer 2
323
1,581
12,717
48
2,571
1,102
15,611
2,731
The adjustment for agency basis relates to arrangements where the company acts as a supply channel on behalf of a
software supplier. This software supplier dictates the sell and buy price and provides details of the customer.
Continuing operations 2018 restated
Sale of goods
Services
Adjustment for agency basis
Reported revenue
Segment result (gross profit)
Other operating costs and income
Investing and financing activities
Profit before tax
Licence
sales
£’000
2,905
-
-
2,905
Project
work
£’000
-
10,742
-
10,742
Recurring
revenues
£’000
-
5,012
(232)
4,780
2,186
5,794
2,460
Total
£’000
2,905
15,754
(232)
18,427
10,440
(7,084)
(30)
3,326
Major customer (partner) over 10% of revenue
Customer 1
-
8,994
1,737
10,731
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 2.
76
77
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
5. Revenue
Geographical information
England
Rest of Europe
United States of America
Others
Group
liabilities at 31 March 2018 were recognised as revenue in the year ended 31 March 2019.
Contract liabilities relate to consideration received from customers in advance of work being completed. The contract assets
of £471k at 31 March 2018 have been fully reclassified as a receivable in the year 31 March 2019. £14,086k of the contract
2019
£’000
3,452
2,972
17,543
1,272
25,239
2018
restated
£’000
3,586
2,409
10,971
1,461
18,427
Of the balance of £3,318k classified as deferred income at 31 March 2019, it is expected that £3,151k will be recognised
as revenue in the year ended 31 March 2020 and £167k will be recognised as revenue in the year ended 31 March 2021 on
account of performance obligations having been satisfied in those periods.
The Group has applied the practical expedient in paragraph 121 of IFRS 15 and chosen to not disclose information relating
to performance obligations for contracts that had an original expected duration of one year or less, or where the right
to consideration from a customer is an amount that corresponds directly with the value of the completed performance
obligations.
The geographical revenue segment is determined by the domicile of the external customer.
Non current assets, including Property, Plant & Equipment, Goodwill and Intangibles, are all located in England.
These are not reported to management on a segmented basis.
Analysis of revenue
Continuing operations
Sale of goods
Rendering of services
Timing of transfer
Goods and services transferred at a point in time
Products - Own IP
Products - 3rd party
Delivery services
Goods and services transferred over time
Support and maintenance
Contract balances
Receivables included within Trade and other receivables
Contract assets
Contract liabilities
Group
2019
£’000
4,196
21,043
25,239
2018
restated
£’000
2,905
15,522
18,427
Group
2019
£’000
9,198
7,349
3,132
2018
restated
£’000
6,805
3,915
2,928
5,560
25,239
4,779
18,427
Group
2019
£’000
4,064
1,210
2018
restated
£’000
19,530
471
(3,318)
(14,086)
Contract assets predominantly relate to fulfilled obligations in respect of Own IP and 3rd Party Products, Delivery services
and Support and maintenance which have not been invoiced.
At the point of invoice, the contract asset is derecognised and a corresponding trade receivable is recognised.
6. Analysis of expenses by nature
The breakdown by nature of expenses is as follows:
Employee remuneration
(see note 7)
Intangible assets
Amortisation of intangible assets (see note 15)
Research and development costs expensed
Property, plant and equipment
Depreciation of property, plant & equipment (see note 16)
Gain on disposal of property, plant & equipment
Auditor’s remuneration
- for audit services (Group and Company, the Company fee is not separately quantifiable)
- for tax advisory services
- for other services
Inventories recognised as an expense during the year
Write-off and provision of doubtful receivables
Operating leases
Net foreign exchange (gains) / losses
Other expenses
Total cost of sales and administration expenses
2019
£’000
2018
£’000
9,598
8,152
247
576
823
315
(3)
312
47
-
10
57
545
-
58
(727)
246
474
720
251
-
251
45
5
14
64
341
2
44
402
8,288
18,954
5,162
15,138
78
79
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
7. Staff costs
The average number of employees (including directors)
during the year was:
Production and support
Distribution
Administration
Their aggregate remuneration comprised:
Salaries
Social security costs
Defined contribution costs
Share-based payments: equity settled
Group
Company
2019
Number
88
24
10
122
£’000
8,181
873
382
162
9,598
2018
Number
90
22
10
122
£’000
6,982
729
341
100
8,152
2019
Number
2018
Number
87
20
10
117
£’000
7,108
806
345
162
8,421
90
20
10
120
£’000
6,390
701
327
100
7,518
Details of directors’ remuneration required by the Companies Act are set out in the audited information included in the
Directors’ Remuneration report on pages 52 to 55. For the purposes of IAS 24 “Related Party Disclosures” these figures
also equate to the salary disclosure required of the key management personnel.
Other related party transactions including loans and dividends, involving directors are disclosed in the Directors’
Remuneration report on pages 52 to 55.
The Group has taken advantage of the exemption in IAS 24 from reporting related party transactions between members of
the group because they are wholly owned subsidiaries.
8. Other operating income
Analysis of other operating income
Operating lease receipts (see note 28)
9. Finance income and finance costs
Analysis of finance income
Bank interest received
Analysis of finance costs
Mortgage interest paid
Bank loan interest
Directors’ loan interest
Other
80
Group
2019
£’000
2018
£’000
57
57
67
67
Group
2019
£’000
2018
£’000
9
(2)
(5)
-
(1)
(8)
1
(6)
(21)
(3)
(1)
(31)
10. Taxation
Current UK tax
Foreign tax
Less: double taxation relief
Over provision in prior year
Deferred tax
- temporary differences
- US tax losses current year
- US tax losses prior year
Corporation tax
The charge for the year can be reconciled to the reported profit as follows:
Profit before tax
UK corporation tax at 19% (2018: 19%)
Research and development credit
Relief for exercising of share options
Difference between writing-down allowances and depreciation
Other non-deductible expenses
Effect of different rates in other jurisdictions
Utilisation of tax losses
Over provision in prior year
Recognition of US tax losses prior year
Tax charge as above
2019
£’000
796
57
(10)
(6)
837
(61)
(265)
-
511
6,343
1,205
(142)
(610)
13
14
47
(10)
(6)
-
511
11. Deferred tax
Group
Balance at 1 April 2017
Recognised within the
Statement of Changes
in Equity
(Charge) / credit to
Income Statement
Balance at 1 April 2018
Recognised within the
Statement of Changes
in Equity
(Charge) / credit to
Income Statement
Balance at 31 March 2019
Other timing
difference
Equity Share based
payments
reserve
Tax losses
Intangibles
£’000
114
£’000
110
£’000
6
-
(38)
(32)
(58)
-
56
-
(49)
(11)
(43)
-
7
£’000
-
-
202
202
17
265
484
£’000
(256)
-
42
(214)
-
41
(173)
4
17
131
178
31
340
2018
restated
£’000
602
68
(22)
-
648
(21)
(129)
(74)
424
3,326
632
(117)
(81)
25
12
33
(6)
-
(74)
424
Total
£’000
(26)
(54)
223
143
146
326
615
81
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
Company
Balance at 1 April 2017
Recognised within the
Statement of Changes
in Equity
(Charge) / credit to
Income Statement
Balance at 1 April 2018
Recognised within the
Statement of Changes
in Equity
(Charge) / credit to
Income Statement
Balance at 31 March 2019
Other timing
difference
£’000
Equity Share based
payments
reserve
£’000
£’000
Intangibles
£’000
114
110
(256)
6
-
(38)
(32)
(58)
-
56
-
(49)
(11)
(43)
-
7
4
17
131
178
31
340
-
42
(214)
-
41
(173)
Total
£’000
(26)
(54)
21
(59)
129
61
131
The financial statements include a deferred tax asset of £484k (2018: £202k) in respect of trading losses in the Group’s US
subsidiary. In accordance with the requirement of IAS 12 Income Taxes, the Directors have considered the likely recovery of
this deferred tax asset. The Directors have taken into account expected future taxable profits and expect an improvement in
profitability and profits in future periods and that this will be sustained. Accordingly the Directors have satisfied themselves
that it is appropriate to recognise the above deferred tax asset.
Details of the adjusted earnings per share are set out below:
Profit attributable to owners of the parent
Amortisation of intangible assets (see note 15)
Share-based payments
Net foreign exchange differences
Tax on the adjustments
Adjusted profit attributable to owners of the parent
Basic weighted average number of shares, excluding own shares, in issue
Dilutive effect of share options
Diluted weighted average number of shares, excluding own shares, in issue
12. Dividends
Amounts recognised as distributions to equity holders:
Final dividend for the year ended 31 March 2018 of 1.875p
(for the year ended 31 March 2017: 1.70p) per share
Interim dividend for the year ended 31 March 2019 of 0.7p
(31 March 2018: 0.625p) per share
Proposed final dividend for the year ended 31 March 2019 of 2.3p
2019
£’000
2018
£’000
713
267
980
645
239
884
Basic Earnings per share
Diluted Earnings per share
Adjusted Basic Earnings per share
Adjusted Diluted Earnings per share
14. Goodwill
Cost of goodwill
The proposed final dividend is subject to shareholders’ approval at the AGM and has not been included as a liability in these
financial statements.
13. Earnings per share
The calculation of earnings per share is based on profit attributable to owners of the parent and the weighted average
number of ordinary shares in issue during the year.
The adjusted earnings per share figures have been calculated based on earnings before adjusted items. These have been
presented to provide shareholders with an additional measure of the Group’s year-on-year performance.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares arising from share options granted to employees where the exercise price is less than
market price of the Company’s ordinary shares at the year end.
Balance at 1 April 2017, 31 March 2018 and 31 March 2019
Accumulated impairment charges
Balance at 1 April 2017, 31 March 2018 and 31 March 2019
Carrying amount at 1 April 2017, 31 March 2018 and 31 March 2019
Allocation of goodwill
AXL customers
Chapter26 customers
Speed-Trap customers
Balance at 1 April 2017, 31 March 2018 and 31 March 2019
The carrying amount of goodwill represents the balance of the original cost of goodwill attached to the subsidiary
companies on acquisition. The Group is required to test this value at least annually for impairment.
The extant customers of the subsidiaries (all of whom are now customers of the parent company) continue to form
identifiable cash generating units (CGU’s). For AXL and Chapter26, all the CGUs are within the United Kingdom, while for
Speed-Trap the CGUs are spread globally.
82
83
2019
£’000
5,832
247
162
(727)
60
5,574
2019
No.
39,471,172
654,078
40,125,250
2019
Pence per
share
14.78
14.53
14.12
13.89
2018
restated
£’000
2,902
246
100
402
(142)
3,508
2018
restated
No.
38,104,967
1,670,139
39,775,106
2018
restated
Pence per
share
7.62
7.30
9.21
8.82
Group
Company
£’000
10,952
£’000
10,608
2,256
8,696
1,912
8,696
100
918
7,678
8,696
100
918
7,678
8,696
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
The amortisation charge for the year is booked to administration expenses.
The remaining amortisation period for the Purchased IPR is 4 years (2018: 5 years) and the Trade name is 6 years (2018: 7 years).
The internally generated IPR has been fully amortised.
Notes to the financial statements (continued)
The recoverable amount of these CGU’s has been determined based on a value-in-use calculation. To calculate this, pre
tax cashflow projections are based on financial budgets calculated using both current year and prior year knowledge
of customer contracts and approved by the Board for the year ended 31 March 2019. These are then extrapolated for
five years with 2% (2018: 2%) growth rate applied, and extended beyond five years at 2% (2018: 2%), which the Board
considers conservative given the long-term opportunities that exists in the regions that the CGU’s operate in. The discount
rate applied to cashflow projections is 15% pre tax (2018: 15%).
The same growth and discount rate assumptions have been applied to each CGU due to the fact that they are the same
class of business and same type of customer.
Key assumptions used for the value-in-use calculations
Key assumptions are made by management based on past experience taking into account external sources of information
around gross margins, growth rates and discount rates for similar businesses.
The calculation of value in use is most sensitive to assumptions around:
operating cashflows, based on financial budgets for the year ended 31 March 2020 approved by the Board;
growth rates in the current year budget which are based on individual customer contracts, same treatment as 2018;
growth rates in year 2 onwards, which we have maintained at a conservative 2%;
the discount rate, based on the pre-tax weighted average cost of capital of the Group:
the CGU gross margins achieved.
Sensitivity to changes in assumptions
Having reviewed the key assumptions, the margins achieved are based on actual margins, the growth rates are based
on budget for the current year and a very conservative 2% growth rate ongoing, the discount rate is the variable with the
maximum impact. By varying this 20% all CGU’s would still allow the recoverable amount to exceed the carrying value.
Therefore management is confident in the assumptions used.
Management are satisfied that a reasonable change in the key assumptions used in assessing the recoverable amounts
of the cash generating units, would not give rise to the recoverable amount exceeding the carrying value of each cash
generating unit.
15. Other intangible assets
Group & Company
Cost
Internally Purchased
IPR
generated IPR
£’000
£’000
Trade
name
£’000
Total
£’000
Balance at 1 April 2017, 31 March 2018 and 31 March 2019
56
1,858
142
2,056
16. Property, plant & equipment
Group and Company
Cost or valuation
Balance at 1 April 2017
Additions
Revaluation
Disposals
Balance at 1 April 2018
Additions
Disposals
Balance at 31 March 2019
Depreciation
Balance at 1 April 2017
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 1 April 2018
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 31 March 2019
Carrying amount
Balance at 1 April 2017
Balance at 31 March 2018
Balance at 31 March 2019
Accumulated amortisation
Balance at 1 April 2017
Amortisation
Balance at 1 April 2018
Amortisation
Balance at 31 March 2019
Carrying amount
Balance at 1 April 2017
Balance at 31 March 2018
Balance at 31 March 2019
84
56
-
56
-
56
-
-
-
465
232
697
232
929
1,393
1,161
929
28
14
42
15
57
114
100
85
549
246
795
247
1,042
1,507
1,261
1,014
The net book value of assets held under finance lease or hire purchase contracts, included above, are as follows:
Group and Company
Motor vehicles
Allocation of depreciation charge
Cost of sales
Administration expenses
Charge for year
2019
£’000
-
2019
£’000
79
236
315
Land &
buildings
Fixtures &
equipment
£’000
£’000
Motor
vehicles
£’000
Total
£’000
106
3,229
2,200
442
658
-
3,300
-
-
3,300
-
47
(47)
-
-
70
(70)
-
-
2,200
3,300
3,300
923
402
-
(103)
1,222
436
-
1,658
594
182
-
(102)
674
225
-
-
899
329
548
759
-
-
-
106
23
(18)
111
40
22
-
-
62
20
-
(18)
64
66
44
47
844
658
(103)
4,628
459
(18)
5,069
634
251
(47)
(102)
736
315
(70)
(18)
963
2,595
3,892
4,106
2018
£’000
19
2018
£’000
78
173
251
85
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
Tangible Assets held at valuation
18. Trade and other receivables
In respect of tangible assets held at valuation, the comparable carrying amount that would have been recognised if the assets
Group
Company
had been carried under the historical cost model are as follows:
Group and Company
Land and buildings
2019
£’000
1,798
2018
restated
£’000
1,842
Included in land & buildings (valued in 2018) is freehold land at £1,230,000 (2018: £1,230,000) which is not subject to
depreciation. The land and buildings original purchase cost was £2,224,000.
For detail on the fair value measurement of the freehold land and buildings see note 29.
17. Investment in subsidiaries
Company
Cost of investment
Balance at 1 April 2018 and 31 March 2019
Accumulated provision for impairment
Balance at 1 April 2018 and 31 March 2019
Carrying amount at year end
IS Solutions Ltd (formerly Celebrus Ltd)†
Celebrus Technologies Ltd*†
Chapter26 Ltd†
D4t4 Solutions Inc.§
Internet Service Solutions Ltd†
Internet Systems Solutions Ltd†
Internet Site Solutions Ltd†
Magiq Ltd*†
Speed-Trap Holdings Ltd†
2019
£’000
273
2018
restated
£’000
273
-
273
-
273
Proportion of
ownership of
ordinary shares
100%
100%
100%
100%
100%
100%
100%
100%
100%
Country of
Incorporation
England & Wales
England & Wales
England & Wales
Nature of business
Dormant
Dormant
Dormant
USA
Software & services
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
Dormant
Dormant
Dormant
Dormant
Dormant
* Owned by Speed-Trap Holdings Ltd.
† Registered address - Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, TW16 7EF, UK
§ Registered address - 2626 Glenwood Avenue, Suite 550, Raleigh, North Carolina 27608, USA
All subsidiaries individually prepare and file their own financial statements.
The principal place of business is considered to be the registered address.
Trade receivables
Amounts due from Group undertakings
Other debtors
Prepayments
Accrued income
Trade receivables
Ageing of receivables:
Less than 30 days
31 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
2019
£’000
4,064
-
114
887
1,210
6,275
2019
£’000
3,703
97
3
186
75
4,064
2018
£’000
19,530
-
63
480
471
20,544
2018
£’000
18,982
264
47
138
99
19,530
2019
£’000
4,064
2,506
114
547
1,210
8,441
2019
£’000
3,703
97
3
186
75
4,064
2018
£’000
19,530
917
60
480
471
21,458
2018
£’000
18,982
264
47
138
99
19,530
The average credit period taken on sales of goods and services was 87 days (2018: 67 days).
In accordance with IFRS 9, the Group performed a year end impairment exercise to determine whether any write down in
amounts receivable was required, using an expected credit loss model. The expected loss rate for receivables less than 120
days old is 0% on the basis of the Group’s history of bad debt write offs and above 120 days has not been considered on
the basis of immateriality.
In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date.
Definition of default
The loss allowance on all financial assets is measured by considering the probability of default.
Receivables are considered to be in default when the principal or any interest is significantly more than the associated credit
terms past due, based on an assessment of past payment practices and the likelihood of such overdue amounts being
recovered.
Determination of credit-impaired financial assets
The Company considers financial assets to be ‘credit-impaired’ when the following events, or combinations of several
events, have occurred before the year-end:
significant financial difficulty of the counterparty arising from significant downturns in operating results and/or
significant unavoidable cash requirements when the counterparty has insufficient finance from internal working capital
resources, external funding and/or group support;
a breach of contract, including receipts being more than materially past due;
it becoming probable that the counterparty will enter bankruptcy or liquidation.
Write-off policy
Receivables are written off by the Group when there is no reasonable expectation of recovery, such as when the
counterparty is known to be going bankrupt, or into liquidation or administration. Receivables will also be written off when
the amount is more than materially past due.
86
87
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
Additionally the recoverability of intercompany debts is considered. After review, the Directors believe that no further
expected credit loss provision is required. The policy of credit risk management is covered in note 29.
21. Borrowings
During the year no trade receivable was considered impaired and there was no charge to the income statement as shown
on note 6 (2018: £2k).
Included within Other debtors is £17k (2018: nil) due from a Director further to a share option exercise undertaken in March
2019. The amount due was repaid in May 2019.
19. Inventories
Finished goods and goods for resale
Group
Company
2019
£’000
45
2018
restated
£’000
590
2019
£’000
13
2018
restated
£’000
590
The amount of inventories recognised as an expense during the year amounted to £545k (2018: £341k).
There was no write down in the recognised value of inventories (2018: nil).
20. Trade and other payables
Trade payables
Amounts owed to Group undertakings
Other taxes and social security
Other creditors
Accruals
Deferred income
Group
Company
2019
£’000
1,476
-
343
21
1,616
3,318
6,774
2018
restated
£’000
2,609
-
277
12
1,591
14,086
18,575
2019
£’000
543
1,378
343
21
1,462
3,318
7,065
2018
restated
£’000
481
2,753
277
12
1,377
14,086
18,986
There is no material difference between the fair value of receivables and their carrying value.
Trade payables comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for
trade purchases is 57 days (2018: 53 days). Their carrying value approximates to their fair value.
Obligations under finance lease and hire purchase agreements
Bank loans and mortgages (see Borrowings below)
Group
Company
2019
£’000
-
-
-
2018
£’000
17
763
780
2019
£’000
-
-
-
2018
£’000
17
763
780
Borrowings (Group and Company)
Finance Leases Bank loan and mortgage
Balance at 1 April 2018
Repaid during the year
Balance at 31 March 2019
Repayable within one year
Repayable within one to two years
2019
£’000
17
(17)
-
-
-
2018
£’000
24
(7)
17
8
9
2019
£’000
763
(763)
-
-
-
2018
£’000
1,177
(414)
763
687
76
The finance lease which was taken out in 2016 in respect of a motor vehicle was fully paid off in the year.
The bank loan and mortgage were fully paid off during the year. The 2018 year end balance of £763k comprised a bank loan
of £573k and a mortgage of £190k.
At 31 March 2019 there were no undrawn facilities (2018: nil).
22. Share capital
Share
capital
£’000
2019
Share
premium
£’000
Share
capital
£’000
2018
Share
premium
£’000
Shares
Shares
50,000,000
1,000
50,000,000
1,000
Ordinary shares of 2p each
Authorised
Issued and fully paid up
Balance at 1 April 2018
Issued during year
Balance at 31 March 2019
38,261,019
1,439,870
39,700,889
765
29
794
1,972
652
2,624
37,954,318
306,701
38,261,019
759
6
765
1,923
49
1,972
The Company issued 1,439,870 (2018: 306,701) Ordinary shares during the year in two tranches to satisfy share option
exercise requirements. The first tranche comprised 184,388 shares at a price of 38.42p and the second tranche comprised
1,255,482 shares at a price of 51.18p (2018: 54.67p). This increased the share premium account by £652k (2018: £49k).
Any costs associated with the issue of new shares were less than £1k (2018: £1k) and are recognised in professional fees.
88
89
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
23. Own shares
At the year end the company held 478,880 (2018: 247,815) ordinary shares in Treasury, with fair value of £1,230,722 (2018:
£293,661). Details of purchases and sales are shown below.
Number of Share price at point Percentage of Consideration
own shares
3,399
of transaction (p)
share capital
0.01%
paid £’000
Balance of own shares at 1 April 2017
06 December 2017
18 December 2017
01 February 2018
09 February 2018
26 March 2018
Balance of own shares at 31 March 2018
Total consideration paid in year ending 31 March 2018
02 July 2018
02 July 2018
22 August 2018
22 August 2018
23 August 2018
23 August 2018
04 December 2018
04 December 2018
13 December 2018
17 December 2018
18 December 2018
19 December 2018
20 December 2018
21 December 2018
08 January 2019
09 January 2019
16 January 2019
16 January 2019
17 January 2019
18 January 2019
21 January 2019
22 January 2019
25 January 2019
31 January 2019
20 February 2019
21 March 2019
21 March 2019
25 March 2019
Total consideration paid in year ending 31 March 2019
79,155
20,000
50,000
10,000
85,261
247,815
17,955
(17,955)
58,139
(153,864)
78,212
(111,804)
28,850
(28,850)
5,000
2,500
2,500
2,500
2,500
2,500
2,500
2,500
2,500
(18,333)
2,500
(7,413)
2,500
2,500
(4,500)
(87,754)
(10,000)
435,882
10,000
10,000
478,880
129.99
116.00
126.68
114.17
119.68
146.00
146.00
174.00
174.00
182.00
182.00
191.00
191.00
187.00
185.75
184.00
176.10
173.00
173.00
197.59
205.00
206.00
206.00
203.60
205.00
202.50
200.00
201.50
192.50
209.00
237.50
235.73
240.00
0.21%
0.05%
0.13%
0.03%
0.22%
0.65%
0.05%
(0.05%)
0.15%
(0.40%)
0.20%
(0.29%)
0.08%
(0.08%)
0.01%
0.01%
0.01%
0.01%
0.01%
0.01%
0.01%
0.01%
0.01%
(0.05%)
0.01%
(0.02%)
0.01%
0.01%
(0.01%)
(0.23%)
(0.03%)
1.10%
0.03%
0.03%
1.21%
103
23
63
11
102
302
26
101
142
55
9
5
5
4
4
4
5
5
5
5
5
5
1,036
24
24
1,469
24. Merger reserve
The merger reserve arose on the acquisition of Speed-Trap Holdings Ltd (23 January 2015) and represents the excess
consideration paid by the issue of shares over the share capital nominal value. Additions to this reserve of £60k (2018: £113k) are
a result of the exercise of options issued which have been held in the own shares and equity reserve accounts.
25. Revaluation reserve
This represents the gains on revaluation of the property in line with market valuations.The property was last professionally
valued in March 2018. The gain on revaluation was £70k (2018: £706k). This is a non-distributable reserve as it represents
unrealised profits on the revalued assets.
26. Equity reserve
This is in relation to the options issued following the Speed-Trap acquisition in 2015 and represents the fair value less the
cash received to exercise those options of £3,833 (2018: £77,098). The outstanding balance of these options is included
in the balance at 1 April 2018 and 31 March 2019, as applicable, in note 27. In addition the total includes the deferred tax
asset on these options of £6,994 (2018: £55,649).
27. Share-based payments
The Company has a share option scheme for all employees of the Group, a combination of both EMI and non-EMI schemes.
Share options vest in equal instalments over three years based on previously set EPS targets based upon 10% growth. In
relation to the share options shown below the Board forecast that the remaining share options will vest.
Options are granted at the closing price on the previous day and have a vesting period of three years. If the options are not
exercised within ten years of the grant date, or if employees leave before their options vest then those options are forfeited.
Vested options are settled subsequently by a combination of equity shares in the parent Company and cash at Board
discretion.
Balance at 1 April
Granted during the year
Forfeited during the year
Exercised during the year
Balance at 31 March
Exercisable at year end
2019
Weighted
2018 restated
Weighted
No. of share av. exercise No. of share av. exercise
price
options
options
price
56.26p
3,140,798
3,096,872
45.73p
530,000
149.20p
424,500
114.00p
-
-
(55,000)
(1,880,343)
1,790,455
51.38p
113.19p
(325,574)
3,140,798
99.47p
41.02p
70.11p
884,788
90.97p
1,791,681
56.26p
The weighted average share price at the exercise date of the exercised shares was £2.221 (2018: £1.715). The weighted
average contractual life of the outstanding options was 7 years (2018: 7 years), exercisable in the range 18.5p to 152.5p.
1,880,343 share options were exercised in the year, 1,439,870 (note 22) by way of issue of new shares and 440,473 by issue
of shares from Treasury.
In the Statement of Changes in Equity (page 63) the value of Treasury shares is calculated on a First-In-First-Out (FIFO) basis,
while the fair value represents the value based on the year end share price.
90
91
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
A summary of the option price ranges are as follows:
2019
Exercisable
price range
18.50p to 75.00p
90.50p to 124.00p
136.00p to 152.50p
No. of share
options
352,955
877,500
560,000
1,790,455
The weighted average exercise price of all outstanding share options was 113.19p (2018: 70.11p).
The Group recognised £162k of expense related to equity-settled share-based payments in the year (2018: £100k).
The fair value of options granted during the year is determined by applying the Black-Scholes model. The expense is
apportioned over the vesting period of the option and is based on the number which are expected to vest and the fair value of
those options at the date of grant.
The inputs into the Black-Scholes model are as follows:
Number of options granted
Share price at date of grant
Exercise price
Option life in years
Risk-free rate
Expected volatility
Expected dividend yield
Fair value of options
13 Aug 2018
13 Aug 2018
13 Aug 2018
10 Jul 2018
166,667
149.00p
149.00p
1
3.18%
40.90%
2.11%
24.30p
166,667
149.00p
149.00p
2
3.18%
40.90%
2.11%
33.72p
166,666
149.00p
149.00p
3
3.18%
40.90%
2.11%
40.37p
30,000
152.50p
152.50p
1
3.13%
39.90%
2.11%
24.25p
Expected volatility was determined by calculating the historical volatility of the Group’s share price for the 5 year period prior to the
date of grant of the share option. The expected life used in the model is based on management’s best estimate. The Group did not
enter into any share-based payment transactions with parties other than employees during the current or previous period.
28. Operating lease arrangements (Group and Company)
As lessee
There are no outstanding non-cancelled leases (2018: nil).
Lease payments recognised as an expense during the year
Lease payments are for rental of premises in India
Total value of future minimum lease payments committed under non-cancellable operating leases:
Not later than one year
Later than one year and not later than five years
Later than five years
As lessor
There are no outstanding non-cancelled leases (2018: nil).
Lease receipts recognised as income during the year
Lease receipts are for fixed-term sub-lets of parts of the parent company’s premises bearing
no contractual right of renewal or extension.
92
2019
£’000
58
2019
£’000
58
260
105
2018
£’000
44
2018
£’000
50
225
159
57
67
29. Financial instruments and risk management
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and,
whilst retaining responsibility for them, it has delegated the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the executive team.
The Board receives monthly reports from the executives through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets.
Capital Management policy
Management considers capital to comprise issued share capital, reserves and borrowings, along with cash and cash equivalents.
The Group manages its capital to ensure it operations are adequately provided for, while maximising the return to
shareholders through effective management of its resources. The principal financial risks faced by the Group are liquidity
risk, interest rate risk and foreign exchange rate risk. The Directors review and agree policies for managing each of these
risks. These policies remain unchanged from previous years.
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern and so provide
returns for shareholders. The Group meets its objectives by aiming to achieve growth which will generate regular and
increasing returns to shareholders.
The Group manages the capital structure and makes changes in light of changes in economic conditions. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders.
Capital risk management
The Group and Company’s capital structure, as defined above, is managed by the Board to ensure that the Group and
Company continues as a profitable going concern. There are no externally imposed capital requirements.
The Group has no net debt (2018: nil).
Borrowings
Cash and cash equivalents
Net cash
Categories of financial instruments
Financial Assets at Amortised Cost
Cash and bank balances
Trade and other receivables
Financial Liabilities at Amortised Cost
Trade and other payables
Borrowings
Reconciliation of liabilities arising from financing activities
Finance leases
Bank loans and mortgages
Group
2019
£’000
Company
2019
£’000
2018
£’000
2018
£’000
(780)
4,634
3,854
-
10,996
10,996
-
10,996
10,996
(780)
4,634
3,854
2019
£’000
Restated
2018
£’000
2019
£’000
Restated
2018
£’000
10,996
5,388
4,634
20,064
10,996
7,894
4,634
20,978
3,113
4,212
3,404
-
Group and company
780
2018 Cashflows
£’000
£’000
17
(17)
763
780
(763)
(780)
-
2019
£’000
-
-
-
4,623
780
93
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
Foreign currency risk management
The Group’s foreign currency exposure arises from:
Transactions (sales/purchases) denominated in foreign currencies; and
Monetary items (mainly cash and receivables) denominated in foreign currencies
The exposure to transactional foreign exchange risk is monitored and managed at a Group level. Natural hedging is
employed, to the extent possible, to minimise net exposures; however, where significant exposures arise it is Group policy
to enter into formal hedging arrangements.
Credit risk management
No expected credit losses have been provided for at 31 March 2019 (2018: nil).
At 31 March 2019, the Company was due £2,508k from its US subsidiary, D4t4 Solutions Inc. This balance is repayable
upon demand. Although the subsidiary does not have sufficient accessible highly liquid assets in order to repay the loan if
demanded at the reporting date, the Directors are satisfied that there is a means of recovery strategy to repay the balance
over time. The time period to realise the cash is relatively short and all strategies indicate that the Company would fully
recover the outstanding balance of the loan. On this basis no impairment loss has been recognised in respect of the Group
Carrying amounts of the Group’s financial assets and liabilities denominated in foreign currencies was as follows:
receivable as any impact of discounting would be immaterial.
US Dollars
- cash
- receivables
- payables
Euros
- cash
- receivables
- payables
Liabilities
Assets
2019
£’000
2018
£’000
-
-
-
-
1,361
2,762
-
-
36
-
-
46
2019
£’000
725
3,371
-
133
16
-
2018
£’000
644
19,077
-
85
100
-
The following table shows the effect on the Group’s result for the year, of £ strengthening by 5% against debtor, creditor
and cash balances denominated in foreign currencies, with all other variables held constant. 5% represents management’s
assessment of the reasonably possible change in exchange rates.
At 31 March 2019
Impact on profit/equity for the year
At 31 March 2018
Impact on profit/equity for the year
$
£’000
€
£’000
Total
£’000
(138)
(805)
(5)
(5)
(143)
(810)
The following table shows the effect on the Group’s result for the year, of £ weakening by 5% against debtor, creditor and
cash balances denominated in foreign currencies, with all other variables held constant. 5% represents management’s
assessment of the reasonably possible change in exchange rates.
At 31 March 2019
Impact on profit/equity for the year
At 31 March 2018
Impact on profit/equity for the year
$
£’000
€
£’000
Total
£’000
180
890
6
5
186
895
The Group uses credit reference agencies to determine and monitor the credit limits of new and existing customers. At the
end of the year two partners owed a total of £3,179,000 (2018: one partner owed £16,375,000) and no expected credit loss
provision has been made in relation to this balance. No other customers / partners owed more than 10% of the outstanding
total. No expected credit loss provision has been recognised for trade receivables at 31 March 2019 (2018: nil).
The Group’s customers primarily consist of banks, partners and other longstanding customers, primarily blue-chip
companies that are deemed to have a low credit risk. As a result, the credit quality of trade receivables that are neither past
due nor impaired has been assessed by the Directors to be relatively high, taking account of a low historic experience of
bad debts and relatively good ageing profiles.
The Group controls its exposure to credit risk by setting limits on its exposure to individual customers, compliance is
monitored by the Credit Control Team. As part of the process of setting customer credit limits, different external credit
reference agencies are used, according to the country of the customer. The Group has a policy of dealing only with
creditworthy counterparts.
The Group manages the credit risk and quality of cash balances by holding balances with reputable banks.
Liquidity risk management
The Board manages liquidity risk by maintaining adequate reserves of cash and banking facilities to cover day-to-day
trading. The Group’s policy is to pay creditors in full as and when they become due, which for all practical purposes is at
latest by the end of the month following the invoice date. The Board believes that there is little liquidity risk since the Group
has adequate cash balances to satisfy its creditors.
Maturity analysis of financial liabilities
Group
Company
In less than one year:
Borrowings
Trade payables
Amounts owed to Group undertakings
Other creditors
Accruals
In more than one year:
Borrowings
2019
£’000
-
1,476
-
21
1,616
3,113
2018
£’000
713
2,609
-
12
1,591
4,925
2019
£’000
-
543
1,378
21
1,462
3,404
2018
£’000
713
481
2,753
12
1,377
5,336
-
-
85
85
-
-
85
85
94
95
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
All of the financial liabilities above are recorded in the financial statements at amortised cost. The above maturity analysis
amounts reflect the contractual undiscounted cash flows, including future interest charges, which may differ from the
carrying values of the liabilities at the reporting date.
Interest rate risk management
The Group’s exposure to changes in interest rate risk is immaterial as the loan and mortgage were repaid during the year.
The Board of Directors monitor movements in interest rates and have not prepared sensitivity analysis in relation to interest
rates as they do not believe that any reasonable variance would have a material impact on the Group and there are no such
financial liabilities at the year end.
Fair value measurement
Financial instruments that are measured subsequent to initial recognition at fair value, are grouped into Levels 1 to 3 based
on the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
assets or liabilities;
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
The freehold land & buildings are observable at level 2.
The Group’s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of the
revaluation at 31 March 2019. The fair value measurements of the Group’s freehold land and buildings as at 31 March 2018
were performed by De Souza & Co, independent valuers not related to the Group. De Souza & Co are members of the
Royal Institution of Chartered Surveyors, and they have appropriate qualifications and recent experience in the fair value
measurement of properties in the relevant location. The valuation was prepared in accordance with the RICS Valuation -
Global Standards 2017 and the International Valuation Standards and was based on recent market transactions on arm’s
length terms for similar properties.
The fair value of the freehold land and buildings were determined based on the market comparable approach that reflects
recent transaction prices for similar properties. 10 similar properties with sales within the last two years, and within 10 miles
were used as the basis for comparison using both sales value and letting rates to determine the valuation.
In order to determine the apportionment of the fair value between land and buildings, firstly the value of industrial
development land in the broad area of the property was assessed, and secondly an allowance for age and obsolescence
was applied to the likely rebuilding costs of a modern equivalent.
The Directors are satisfied that the assumptions applied in the professional valuation at 31 March 2018 are still valid at
31 March 2019, and as such no valuation has been performed this year.
30. IFRS 15 and prior year adjustment
The Group has adopted IFRS 15 Revenue from Contracts with Customers with effect from 1 April 2018. The Group has
applied IFRS 15 retrospectively under a full restatement approach.
IFRS 15 Revenue from Contracts with Customers
An analysis of the key changes that IFRS 15 has on the Group’s revenue streams, taking into account the move from the
recognition of revenue on the transfer of risks and rewards to the transfer of control are summarised below:
The adoption of IFRS 15 has resulted in a reduction in FY 31 March 2018 revenue and profit before tax of £1.67m and
£1.08m respectively. In addition, opening reserves at 1 April 2018 are £0.87m lower than the amount reported in the 31
March 2018 financial statements. These amounts are based on the Group applying the retrospective method in transitioning
to IFRS 15.
The reductions of £1.67m and £1.08m arose on contracts spanning the prior year end where under IAS 18 it was
permissible to recognise the software, despite the hardware not being delivered. Under IFRS 15 this would have constituted
one performance obligation, therefore the software revenue invoiced pre 31 March 2018 has been deferred. The cost of
sales impact is the derecognition of the associated cost of sales with the software sales derecognised.
There are no such similar contracts spanning the year end at 31 March 2019 and as such no disclosure has been given for
revenue recognised in the year ended 31 March 2019 with different treatments under IFRS 15 and IAS 18.
The table below shows the effect of IFRS 15 on the restated Consolidated Statement of Consolidated Income as at
31 March 2018:
As previously
reported
£’000
IFRS 15
adjustment
£’000
Restated
£’000
Continuing operations
Revenue
Cost of sales
Gross Profit
Administration expenses
Other operating income
Profit from operations
Finance income
Finance costs
Profit before tax
Tax
Attributable to equity holders of the parent
Earnings per share from continuing operations
Statutory
Basic
Diluted
Adjusted
Basic
Diluted
20,092
(8,577)
11,515
(7,151)
67
4,431
1
(31)
4,401
(628)
3,773
9.90p
9.49p
11.49p
11.01p
(1,665)
590
(1,075)
-
-
(1,075)
-
-
(1,075)
204
(871)
-2.28p
-2.19p
-2.28p
-2.19p
18,427
(7,987)
10,440
(7,151)
67
3,356
1
(31)
3,326
(424)
2,902
7.62p
7.30p
9.21p
8.82p
The effect of adopting IFRS 15 primarily impacts on the following areas:
Technology revenues/margins recognised under contracts with customers, which include both the supply of software and
hardware, representing one performance obligation under IFRS 15 result in revenue recognition at a point in time, which is
different to the previous treatment whereby the supply of software and hardware were treated as separate sale arrangements.
The effect of implementing IFRS 15 is as follows:
The adoption of IFRS 15 has not altered the total contract value or timing of cash flows.
12 months to 31 March 2019
Prepared on an IFRS 15 basis
12 months to 31 March 2018
Restatement has been required as a result of moving from IAS 18 to IFRS 15.
The Group has taken advantage of the practical expedient when applying IFRS 15 retrospectively in that for completed
contracts, the Group is not required to restate contracts that begin and end within the same annual reporting period.
96
97
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Notes to the financial statements (continued)
The table below shows the effect of IFRS 15 on the restated Consolidated Statement of Financial Position as at 31 March 2018:
The table below shows the impact on Consolidated Statement of Cash Flows of IFRS 15 for the year ended 31 March 2018:
Operating activities
Profit before tax
Operating cash flows before movements in working capital
Decrease / (increase) in inventories
Increase in payables
Cash generated from operations
As previously
reported
£’000
IFRS 15
adjustment
£’000
4,401
5,008
341
12,034
1,108
(1,075)
(1,075)
(590)
1,665
-
Restated
£’000
3,326
3,933
(249)
13,699
1,108
The impact of IFRS 15 on the parent Company’s Statement of Financial Position and Statement of Cash Flows is as
shown above.
The Group and Company have not presented a third Statement of Financial Position or Statement of Cash Flows as at
1 April 2017 as there were no transition adjustments at this date.
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax assets
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Tax liabilities
Borrowings
Non-current liabilities
Borrowings
Deferred tax liabilities
Total Liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Revaluation reserve
Own shares
Equity reserves
Retained earnings
Attributable to equity holders of the parent
As previously
reported
£’000
IFRS 15
adjustment
£’000
Restated
£’000
8,696
1,261
3,892
389
14,238
20,544
-
4,634
25,178
39,416
(16,910)
(495)
(695)
(18,100)
(85)
(246)
(331)
(18,431)
20,985
765
1,972
5,917
1,029
(308)
133
11,477
20,985
-
-
-
-
-
-
590
-
590
590
(1,665)
204
-
(1,461)
-
-
-
(1,461)
(871)
-
-
-
-
-
-
(871)
(871)
8,696
1,261
3,892
389
14,238
20,544
590
4,634
25,768
40,006
(18,575)
(291)
(695)
(19,561)
(85)
(246)
(331)
(19,892)
20,114
765
1,972
5,917
1,029
(308)
133
10,606
20,114
98
99
D4t4 Solutions plc Annual Report & Accounts 2019Financial Statements
Corporate information
Registered office
Windmill House
91-93 Windmill Road
Sunbury-on-Thames
Surrey
TW16 7EF
Auditor
RSM UK Audit LLP
25 Farringdon Street
London
EC4A 4AB
Solicitor
Barlow Robbins LLP
Concord House
165 Church Street East
Woking
Surrey
GU21 6HJ
Company registration number
01892751
Bank
HSBC Bank plc
54 Clarence Street
Registrars
SLC Registrars
Elder House
Kingston Upon Thames
St Georges Business Park
Brooklands Road
Weybridge
Surrey
KT13 0TS
Surrey
KT1 1NS
Nominated Advisor & Broker
finnCap
60 New Broad Street
London
EC2M 1JJ
100
®
D4t4 Solutions plc
Windmill House
91-93 Windmill Road
Sunbury-on-Thames
TW16 7EF
www.d4t4solutions.com