D4t4 Solutions plc
Annual Report and Accounts 2022
Unlock new possibilities with
limitless, compliant first-party data
1
D4t4 Solutions plc Annual Report and Accounts 2022 We capture and connect the data that
activates cross-channel experiences and
powers customer analytics
Celebrus Customer
Data Platform
Capture, contextualise, and
activate data in real-time
Harness the most advanced
cross-channel, first party data
collection to create meaningful,
data-driven experiences.
Celebrus Fraud
Data Platform
Don’t just manage fraud –
prevent it
Catch the Fraudster before
the fraud by activating
contextualised identity and
biometric data instantly.
Celebrus Customer
Data Management
Turn raw data into
actionable insight
Automate the intake,
integration, transformation, and
delivery of customer data effectively
with Celebrus CDM.
CONTENTS
STRATEGIC REPORT
1 Highlights
2
Investment case
GOVERNANCE
50 Board of Directors
FINANCIAL STATEMENTS
84
Independent auditor’s report
52 Chairman’s introduction to governance
88 Group statement of comprehensive income
4 Our products and services
53 Corporate governance statement
89 Group statement of financial position
6 Our strategy
58 QCA Corporate Governance Code
90 Group statement of changes in equity
8
Product development
68 Report of the audit committee
91 Group statement of cash flow
10
Information and cyber security
70 Report of the nomination committee
92 Company statement of financial position
12 Strategy in action
72 Report of the remuneration committee
93 Company statement of changes in equity
14 Chairman’s statement
74 Directors’ remuneration report
94 Notes to the financial statements
79 Directors’ report
124 Shareholder information
83 Statement of Directors’ responsibilities
16 CEO’s statement
19 Q&A with the CEO
20 KPIs
22 CFO’s statement
25 Q&A with the CFO
26 Principle risks and uncertainties
30 Stakeholder engagement
36 Our people
38 ESG report
STRATEGIC REPORT
Highlights
Operational
• Launch of Celebrus FDP to address the needs of customers in
protecting their end-customers against fraud.
• Key wins and upsells in the period including;
• A new win in the Healthcare sector.
• An upsell of an existing banking customer of our CDM
business to both the FDP and the CDP which marks our first
paying customer of the FDP.
• Continued conversion of existing customers onto ARR based
contracts.
• Prickly Cactus acquisition fully integrated and assisting in
bringing stronger account management disciplines and
relationships with customers.
• Started building a direct sales channel, and investing in the
marketing automation to support, whilst also seeking new
strategic partnerships for sales.
• Continued development of the pipeline of CDP/FDP
opportunities with a strong year end position.
• Valuable enhancements to CDP product during the year
including the Identity Graph and 100 new marketing signals.
• Numerous key hires at senior level to strengthen the
management team, including in Sales, Marketing, HR and
Information Security.
• Investment into a group-wide systems infrastructure to better
support scalability and growth.
• Restructured plc board and newly formed Operations Board
working effectively, with a clear separation between strategy,
operations and execution.
• Improvements to corporate governance and publication of the
Group’s first ESG report including a carbon audit.
Financial
• Annual recurring revenue* (ARR) up 32% to £14.0 million
(2021: £10.6 million).
• Revenues up 7.3% to £24.5 million (2021: £22.8 million).
• ARR as percentage of total revenue increased to 57% (2021:
47%), delivering significant progress against medium term
target of 65%.
• Gross profit margin of 51.9% (2021: 62.4%).
• Adjusted profit before tax** of £3.3 million (2021: £4.4 million),
and statutory profit before tax of £1.8 million (2021: £3.0 million).
• Diluted Adjusted EPS of 7.1p (2021: 9.5p), and Diluted Basic EPS
of 4.1p (2021: 6.75p).
• Proposed final dividend of 2.07p (2021: 2.00p), making a total
dividend for the year of 2.92p (2021: 2.81p), an increase of 3.9%.
• Year-end cash position £11.4 million (2021: £14.2 million),
increased to free cash of £26.5 million as at 30 June 2022.
• Proposed special dividend of 12.5p per share.
Outlook
• Delivering ARR growth remains our key strategic focus.
• Trading during the new financial year has been in line with the
Board’s expectations with good levels of both existing and new
client activity.
• Strong pipeline of sales opportunities at last year end has
continued to build in FY23.
• Market conditions are moving in the Group’s favour, with
growing distrust and reduced usage of third-party cookies,
and tighter regulation of financial institutions to enforce better
management of fraud
• Continued investment, into marketing, sales, and product
development to grow ARR and maintain the Group’s
competitive advantage.
• Board is highly confident in the Group’s strategy and ability to
deliver results and create significant shareholder value in the
coming years.
• After the period, we secured another FDP win in the Retail sector.
* ARR (Annual Recurring Revenue) is the amount of revenue currently contracted at a point in time that is expected to recur within the next twelve months.
** Adjusted profit before tax is calculated before amortisation of intangibles, restructuring costs, acquisition costs, foreign exchange gains/losses and share based payment charges.
D4t4 Solutions plc Annual Report and Accounts 2022
1
STRATEGIC REPORT
Investment case
Delivering
sustainable value
Market-leading
proprietary software
Presence in
growth sectors
D4t4 has unique proprietary software:
• Celebrus Customer Data Platform (CDP),
• Celebrus Fraud Data Platform (FDP), and
• Celebrus Customer Data Management (CDM)
and the know-how to enable customers around the globe
to better use and manage their data.
D4t4 operates in growth sectors:
• Fraud Detection and Prevention via our
FDP: providing granular, real-time, individual level
data and evidence to reduce the fraud losses within an
organisation and protect its customers.
• Digital Transformation via our CDP: providing
the right data and contextualisation to enable
organisations to better understand their customers
and provide a tailored experience for each customer
across all channels and devices to derive more value.
• Data Activation and Management via our CDM:
building hybrid cloud platforms focused on data
ingestion, integration and transformation to provide
actionable insights to benefit our customers’ business.
Find out more about our products
on pages 4, 5, 8, 9, 12-13
Hear from the CEO on our growth
sectors on pages 16 to 19
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D4t4 Solutions plc Annual Report and Accounts 2022 2022
WINNER
Technology Company
of the Year
Blue-chip
customer base
Proven
management team
Profitable with a
strong balance sheet
D4t4 has a blue-chip international
customer base located in 27
countries, with high customer
satisfaction, and a very low
customer churn rate of less
than 2% pa.
The company has a strong
management team with a track
record of success in growing
software businesses.
The company is profitable, cash
generative, and dividend paying.
It has a strong balance sheet with
ample cash to fund investment into
revenue growth.
Find out how our customers benefit
from our products on pages 12-13
See the structure of our Group
Operations Board on page 56
See our results for the year on
pages 88-89
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D4t4 Solutions plc Annual Report and Accounts 2022 Our products and services
Unlock new possibilities
with limitless, compliant
first-party data
Transform experiences with more complete data sets - captured, contextualised,
and activated with Celebrus.
For over 23 years, Celebrus has delivered data-first innovation. Borrowing from its Latin meaning of “rich in something,” Celebrus strives to
provide the most abundant individual-level engagement and behavioral data technology available.
In response to a desire to expand data capabilities, Celebrus was acquired by parent company, D4t4 Solutions plc, global leaders in data
management in 2015. This acquisition bridged innovation such as automated patching, advanced monitoring scripts, and performance
management and optimisation with the advanced data management capabilities of a customer data platform.
D4t4 Solutions has since consolidated data products under the Celebrus product suite to include Celebrus Customer Data Platform and
Celebrus Customer Data Management. In mid-2021, D4t4 Solutions added Celebrus Fraud Data Platform as a data-first solution to combat
the global fraud pandemic.
D4t4 Solutions continues to invest heavily in developing new data solutions and innovations to ensure clients are well-placed to leverage
their data assets.
Customer Data Platform
Data and marketing professionals don’t have the whole story – they use third-
party systems with limited data capture capabilities and long lag times to
make decisions centered around the customer experience. They jeopardise,
and sometimes violate compliance regulations without access to the data
resources they need to create truly personalised experiences. As a result,
they don’t actually know who their customer is, jeopardising conversion
rates and revenues. Celebrus CDP simplifies the process with first-party data
capture and identity tracking technology built to adhere to evolving, complex
compliance standards that reduce costs and fuel identity-based personalised
experiences. Never having to hear “we didn’t tag for it,” gives data and
marketing professionals the ability to provide a relevant customer experience
and an enhanced corporate reputation.
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D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT "Accuracy and transparency
at scale, in our view, is only
achievable with true first-party
solutions like Celebrus that have a
long and impressive history of
solving large, complex digital
data problems...."
Nicholas Gent, CEO,
Future Proof AI
Fraud Data Platform
Security and data professionals have been focused on managing scams and
fraud – but the third-party systems they’ve been using have sub-par prevention
capabilities. They risk jeopardising relationships with legitimate customers with
their use of limited, one-size-fits-all solutions that lack advanced behavioral
biometrics, sense and trace, and data contextualisation capabilities. These
solutions often cause false positives and unnecessary interruptions for legitimate
customers, damaging reputation. Celebrus FDP is the world’s most advanced,
comprehensive solution that captures real-time, first-party behavioural biometrics
and PII across the entire customer journey – not just on the payment page.
Instant availability to contextualised data transforms the prevention of scams and
financial fraud such as new account creation, account takeover, and payment
fraud. The ability to intervene to catch the fraudster before the fraud provides a
more seamless customer experience, streamlines resource management, and
reduces fraud expense to the organisation.
Customer Data Management
Organisations looking to utilise customer data effectively across the business
struggle with data silos, underperforming environments, cumbersome datasets,
and compliance challenges. To reach maximum efficiency, organisations need
a high-performing on-premise, cloud or hybrid-cloud environment that bridges
necessary data across the business in a compliant manner, easily accessible
by analysts and data scientists. Underperforming data environments disrupt
commerce and ultimately jeopardise earnings and reputation, giving way to
incomplete data stories and inefficient processes which are unable to create the
experiences customers expect. Celebrus CDM provides an enterprise platform that
automates the integration and transformation of customer data from all relevant
data sources, whether on-premises or cloud, to power efficient and effective data
science, modelling, and regulatory analytics.
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D4t4 Solutions plc Annual Report and Accounts 2022
Our strategy
Whether we are building high-performing analytic environments or capturing and contextualising the data that
becomes the backbone for Marketing and Fraud, our goal is to continue to challenge organisations to think
differently about data and ultimately accelerate their digital transformation goals.
As a business, this past year has been the beginning of our transformational journey driven by a new management team and a
renewed focus on driving more aggressive growth in our key markets.
Annual Recurring Revenue (ARR)
Building for scale
Culture
Annual Recurring Revenue has been a focus
for the business to drive more value for our
shareholders. Our goal, given the nature of
our business, is to get to the point where ARR
comprises roughly 65% of our total revenues.
The management team has spent a
considerable amount of their careers in
high-growth businesses, and we understand
the importance of systemisation and
automation to aid scalability during rapid
growth. By ensuring that we are automating
manual processes we free up our resources
to focus on higher-value tasks.
A business can only go as far as the people
within it. D4t4 has a team of incredibly
talented people, and we want to be able
to support and develop them, to deliver
greater shareholder value.
What We Did in FY21/22
What We Did in FY21/22
What We Did in FY21/22
For the first time since we announced our
transition to an ARR business, our ARR
was more than 50% of our total revenues.
This year’s level of 57% is an important
milestone towards our 65% goal as we
continue to deliver new contracts on an
ARR basis wherever possible.
In the year, we;
• implemented a new HR system to
assist in employee engagement and
process automation
• a new CRM and Marketing Automation
platform to support our direct sales and
better enable our partners
• a license management system to better
scale our delivery and management of
our CDP, FDP, and CDM licenses.
As a global business, bringing our people
together is extremely important. During
the year we;
• invested in a new HR system to improve
employee engagement, develop a
culture of open communication, and
facilitate ESG initiatives
• restructured our leadership team to
create an Operations Board, to empower
leaders across the business and improve
accountability and understanding of
expectations for all roles and levels.
What We’re Doing in FY22/23
What We’re Doing in FY22/23
What We’re Doing in FY22/23
We will continue to;
• focus on converting legacy customers
and ensuring that most, if not all, new
customers for the Celebrus CDP and FDP
contract on an ARR basis.
• drive more ARR revenue in CDM in the
form of our Software and IP as well as
our Managed Services that also now
underpin our cloud deployments of the
CDP and FDP.
We will;
• continue to focus on various systems
and processes to create efficiencies,
allowing our teams across the business
to focus on more high-value activities
that will ultimately help us achieve the
goals we are setting internally.
• implement a new Finance system
to increase scalability and improve
processes, and build out better
reporting and analysis to support
the Operations Board in the daily
management of the business.
We will continue to;
• invest in our people and their
development, while also leveraging
our global HR function to bring people
togther across the globe to drive more
innovation and opportunity.
• evolve the culture, during this year
of transition, to foster innovation,
creativity, and productivity.
• utilise ESG to play a key role in bringing
people together
Links to KPIs
Links to risks
Links to KPIs
Links to risks
Links to KPIs
Links to risks
A B C D
E F
G H
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A B C D
E F
G H
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5
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A B C D
E F
G H
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D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Links to KPIs
A
B
C
D
Revenue
ARR
Adjusted profit before tax
ARR as a % of total revenue
E
F
G
H
Adjusted diluted earnings per share
Dividend
Net assets
Cash
Links to risks
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2
3
4
Global economy
Execution and sacalability
Regulatory changes
Competition
5
6
Customer and partner loss
Information and cyber security
7 People
8 Foreign exchange losses
Learn more about our KPIs on pages 20-21
Learn more about how we manage risk on pages 26 to 29
Grow CDP and FDP revenues
Innovate and differentiate
Diversify our revenue streams
With the launch of our Celebrus FDP,
we now have two technologies on the
forefront of digital transformation. By
focusing on these two products we can
continue to drive ARR growth, increasing
shareholder value, and continue to build
upon our favorable customer retention
rates across the business to support
organic growth.
What We Did in FY21/22
• We continued to onboard new
partnerships and extend existing ones.
• We won our first paying FDP customer.
• Our acquisition and successful
integration of Prickly Cactus has resulted
in deepening relationships with existing
customers resulting in higher utilisation
of our core products.
• We’ve also invested in a direct sales
team and have restructured the
Marketing team to focus on growth and
brand visibility.
• We pride ourselves on building upon
our IP to solve for the key challenges
customers are facing in the marketing
and fraud worlds.
• We continue to innovate our platforms
with a view of launching new features
twice a year.
What We Did in FY21/22
• We launched versions 9.4 and 9.5 of the
platform and continued to innovate
our product roadmap based upon
the challenges brands face in the
marketplace today.
• We focused on various research projects
that will play into future releases, as well
as the continued use of our Customer
and Partner Advisory Boards.
• We launched our Customer and
Partner Portal, to create channels of
feedback that are crucial to our product
development and growth.
• We see clear opportunities in the
market, based on industry changes and
new legislation; we will seek to fully
capitalise on those.
• We will continue to grow our existing
partnerships, and develop new ones, but
we want to bring our products direct to new
customers and control our own destiny.
What We Did in FY21/22
• We built our Sales and Marketing teams
around this core concept, which started
as a “Go Loud” campaign and continued
with our investment in a new CRM and
Marketing Automation platform.
• Our PR initiative created quality brand
exposure, and also resulted in several
bylines being published from our key
thought leaders across the business.
What We’re Doing in FY22/23
What We’re Doing in FY22/23
What We’re Doing in FY22/23
We will;
• Have a continued focus on direct sales
and innovation of both platforms
to ensure we maintain our core
differentiators in the market.
• explore new partnerships that can
increase the market exposure of our
brands.
• bring PR in-house to build upon the
successful strategy from last year and
take more control of our messaging.
We will continue to;
• incentivise our product and engineering
teams to find opportunities to identify
and protect Intellectual Property
• invest in key research projects that are
driven by where we see the market
going and the challenges that we see on
the horizon.
Links to KPIs
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Links to KPIs
Links to risks
A B C D
E F
G H
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A B C D
E F
G H
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We will;
• continue our mission of improving our
visibility in the market by updating
our branding and positioning in the
marketplace.
• continue to revamp our digital and
social presence and bring our PR in-
house to take the next steps in our “Go
Loud” campaign.
• simplify our messaging to better explain the
products to our prospects and investors.
• further build out our direct sales toolkit
to support our global sales team.
Links to risks
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D4t4 Solutions plc Annual Report and Accounts 2022 Product development
Intelligence is the ability
to adapt to change
Fraud Prevention
The launch of the Celebrus Fraud Data Platform in June 2021 was the
Kubernetes also promises to become the platform for moving
workloads between on-premise and cloud environments. Kubernetes
most exciting step we’ve taken in several years. It is a product uniquely
is born from the DevOps movement where building for scale is a key
well placed to address the issues we see in society today. Widespread
focus and this drive to automate is something we are focusing on this
scams and identity theft have created huge losses for companies and
year so that the business can grow quickly and efficiently. Increasing
huge distress for individuals, on a worldwide scale, and there are no
automation means we can service existing customers more efficiently
signs of this epidemic slowing down.
Celebrus FDP utilises the world’s most accurate customer insights
technology and focuses it on a range of real-time fraud detection use
cases. These use cases include Scams, New Account Fraud, Remote
Account Takeover Fraud and Payment Fraud.
The feedback we have garnered from customers and partners has
been fantastic and really motivates us to continue to build further
functionality into the platform.
Infrastructure
The world of data platforms continues to evolve with new generation
technology stacks starting to take shape. First amongst equals in this
world is Kubernetes. Kubernetes is quickly becoming the dominant
system for the deployment, scaling and management of applications.
and onboard new customers more quickly than ever before. It also
means that traditional challenges around compliance, such as
ensuring security vulnerabilities in servers are patched quickly, can be
done with less manual work and therefore less cost to the business.
Privacy
The ever-changing story of Intelligent Tracking Protection (ITP) rolled
on through 2021 with Apple releasing new privacy features including
Private Relay. These technologies limit the ability that marketers have
to understand their customers and communicate with them.
AdTech and MarTech companies continue to build workarounds
to ensure their technology still works in Safari, albeit in a limited
capacity. These workarounds have not gone unnoticed by Apple. In
response, Apple implemented changes to its privacy features to shut
down many of these workarounds.
Google also announced a delayed timeline for phasing out third-party
cookies from 2022 to 2023. Google’s decision to extend its timeline
to 2023 appears to be based on its objective to move to privacy-
compliant alternatives including their recently announced Topics API.
These privacy changes define an industry where Celebrus is uniquely
well placed to help marketers. Celebrus is a first party real-time solution
which enables us to provide the granular and timely understanding of
activity on digital channels which our customers require.
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D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT A strong identity resolution solution built on a foundation of concrete
first party data and resilient identifiers such as account number and
Engagement
One of my favourite features this year is the work we have done with
email address, not IP addresses or cookies, is the key requirement. To
one of our business partners, Pegasystems. Pega provides a range of
support these requirements we released the world’s first real-time, first
applications for customer relationship management, which we work
party, Identity Graph. This unique feature enables our customers to
with including Customer Decision Hub (CDH). CDH is the tool of choice
understand who their visitors are even after third party cookies have
for personalised customer experiences. CDH relies on Celebrus CDP as
disappeared from the industry.
being the sensory network understanding visitors on web and mobile.
Compliance
Privacy regulations accelerated during 2021 with a host of US states
bringing new data privacy regulations forward. The pioneer of these in
the US, the California Consumer Privacy Act (CCPA, and subsequently
CPRA) is moving forwards with the introduction of a new enforcement
agency, the California Privacy Protection Agency (CPPA). The measures
and protections afforded by CPRA are now looking remarkably similar
to the EU GDPR.
We have taken our integration with Pega to the next level by helping
CDH understand not just what interests visitors but also measure
their engagement and intensity. This deep understanding of visitor
behaviours is how Celebrus enables Pega to deliver the very best
offers and messages to visitors.
Teamwork
No update would be complete without a big note of thanks to my
team. I am lucky enough to lead a hugely talented and committed
Following the lead of Colorado and Virginia, numerous legislatures
team of people who deliver world class products and services. I fully
throughout the United States introduced their own data privacy bills
expect the year ahead to challenge us as we move forwards together.
modelled off the CPRA. This momentum has carried forward into 2022,
with thirteen states already introducing, or reintroducing, privacy
legislation since the beginning of the new year: Alaska, Florida, Hawaii,
Kentucky, Indiana, Nebraska, New Jersey, New York, Oklahoma
amongst others. Away from the US, enforcement teeth are sharpening
in France, Turkey, China and Europe.
Compliance is one of our strongest feature areas and has underpinned
the product since its inception. This is an area where we see great
opportunity and we expect to announce exciting new product
innovations later this year. We also have new patent applications in
flight to make sure these innovations deliver us valuable intellectual
property for years to come.
Ant Phillips
Chief Technology Officer
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D4t4 Solutions plc Annual Report and Accounts 2022 Information and cyber security
Staying ahead of
evolving risks
As the recently appointed Chief Security Officer it
is encouraging to join an organisation with a strong
security culture which permeates our products, people
and organisational culture. A key part of this culture is
our security framework and certification to ISO 27001,
which is globally recognized as a strong independently
audited Information Security standard. This standard
is currently being strengthened and the new version is
expected to be published in Oct 2022.
At D4t4 we aim for best practice in this field, and so we welcome the
standards evolving in response to changes in the Information Security
landscape. Through our analysis of the changes expected, we have
already started preparations for the transition to ISO 27001:2022. It’s
important to highlight that an implementation of such a standard
goes far beyond a once-per-year external audit. D4T4 commits
resource, thought leadership and effort throughout the year to ensure
we are continuously improving our application of ISO 27001. Analysing
trends, scope review, reviewing controls, internal auditing and a
strong risk management process all form part of this process.
Cyber Operations
Staying in front of evolving cyber risks is something the business
has achieved comfortably over the past year with strong reactions
to Log4J and other threats. Global events such as these provide the
impetus to drive further improvement across the business and signify
the importance of attack planning whether pre-, during and post-
attack, to ensure we are resilient to such threats.
With our standards-based approach, our strong risk management
processes form the foundation of this robustness. In order to build
strong cyber operations, you must first know the risks which the
business faces and the context in which it operates. Technology
and services play a role in ensuring we are appropriately resilient to
current and emerging threats, and at D4t4 we deploy technology to
this effect. Cyber-attacks are getting smarter and the threat landscape
of the workplace is changing with a strong shift to hybrid working
across many industries. D4t4 has coped well with these shifts in
the past twelve months. Looking to the future the organisation will
continue to evolve its cyber operations skills and capabilities and
over the next twelve months and we will deploy a dedicated Security
Operations Centre to further strengthen our capabilities.
Product Security
The security of our Celebrus product has been a key focus for the
team. As a product, Celebrus is tested both internally and externally
with excellent results achieved. D4t4’s secure development lifecycle
provides the foundation for these strong results. In turn this has
provided the foundation for a product that can be deployed in secure
environments and highly regulated industries.
10
Certificate Number 8869
ISO 27001
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT
OUR PEOPLE
Rebecca Hairfield
Project Manager, Cary, North Carolina, USA
Joined D4t4 2019
What was your degree or initial qualification?
Bachelor’s in Politics, and a background in Project Management
Legislation and regulatory framework
Operating in a secure and compliant manner requires understanding
of multiple legislative and compliance frameworks. Operating in
regulated industries, such as banking, insurance, and healthcare
How did you get into data and tech?
I was specifically looking for a change in field to a new and
has been a strong part of the business for D4t4. Having healthcare
growing industry.
customers has meant that we have put in place processes to meet
complex compliance requirements such as HIPAA, (the Health
Insurance Portability and Accountability Act) applicable in the United
States which sets out extensive regulations for the processing of
Personal Health Data within this jurisdiction.
In what has been an exciting challenge, the organisation has
What attracted you to D4t4?
The size of the company means there’s effective,
interpersonal connections and the team seemed to actively
work against the disconnect you experience at a large
company. This, partnered with my desire to change fields,
been through a process of review to ensure compliance with
made D4t4 the perfect fit.
these requirements, which enables our clients to be confident in
processing this type of data within our products.
We will continue to work diligently to ensure we remain in the top tier
as far as information and cybersecurity are concerned.
Tony Bennett
Chief Security Officer
What do you like about working at D4t4?
The team is willing and eager to teach, something I was
looking for when I joined the company. I find fulfilment in a
working environment where I continue to learn and grow in
my knowledge base.
How have you grown professionally while working at D4t4?
I have grown both in my capacity as a Project Manager as
well as in my knowledge of tech. It is incredibly gratifying
to have a solid understanding of the tech behind what I
manage on a day-to-day basis, having started out just three
years ago for the first time in this field.
What would you say to people who might be thinking
about wanting to work in data and tech and at D4t4?
Especially for those who are looking to change fields, who have
a hunger to learn and develop, this is a great place to work.
D4t4 Solutions plc Annual Report and Accounts 2022
1111
D4t4 Solutions plc Annual Report and Accounts 2022 Strategy in action
How a multinational retail bank increased
revenue by $12M from a single campaign
using personalisation
85%
$3m
$12m
reduction in time to
deploy personalisation
incremental profit
from additional sales
incremental revenue
from a single campaign
Challenges
Millions of visitors come to the bank's websites and repeatedly
Solution
Celebrus CDP was chosen because it addressed all the challenges
view specific products every day, but don't progress to a purchase.
the bank had, simply and cost effectively. The solution delivers a fully
Before deploying the Celebrus Customer Data Platform (CDP), their
compliant collection of visitor and customer data across the bank’s
tag-based solutions didn't allow them to act on this opportunity
public and authenticated websites, including Accelerated Mobile
because individual tags aren't able to see this complex sequence of
Pages (AMP) and native mobile applications, in more than
interactions. The bank wanted to retarget these potential customers -
15 countries.
either in-session, or with outbound follow up.
Celebrus CDP provides instant (milliseconds) delivery of data into
The bank also wanted to get serious about rolling out real-time
the bank’s real-time decisioning systems, with rapid and efficient
personalisation, by creating thousands of new targeted, personalised
implementation of data collection via a single line of code – no
messages and offers on its web channel. The bank wanted to trial
tagging required. The maintenance free solution offers data control,
deploying new triggers to see if they could speed up what had been a
access, and ease of use with a business-friendly data model that is
laborious and lengthy process. Typically, when using their tag-based
continuously loaded into the bank’s existing data platforms.
solution, developing new triggers took weeks or even months!
Celebrus CDP was rapidly deployed on all public and authenticated
Finally, the bank wanted to increase sales by optimising loan
websites as part of the bank’s major transformation program.
conversions via intelligent retargeting. They knew that a large number
of customers interacted with their online mortgage or loan calculator
but didn’t convert. These were prime targets for intelligent retargeting.
Celebrus has enabled us to transform the depth of
our personalisation, achieve true real-time website
personalisation, and deliver a consistent cross-channel
customer experience.
12
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT How first-party, tag-free data capture
increased conversion by 24% for a leading
European health insurer
24%
increase in
conversion rates
$↓
↑CX
significant call
centre cost reductions
improved
customer experience
Challenges
Faced with growing competition in a multi-channel marketplace,
process to provide the data for actuaries to determine the insurance
premium. Layering Celebrus on top of the existing process enabled the
a leading Dutch health insurance company understood that being
insurer to optimise customer personalisation in real-time, and at scale.
relevant is critical to creating a successful website. For them, every
visitor to the site has specific insurance requirements based on age,
gender, occupation, and parenthood.
All customers initially see the same banner when they arrive on
the health insurance site. After completing the first step in the five-
stage process, the company then tailors the banners to reflect each
They saw a clear opportunity to improve the relevance of their online
customer’s different life stage – from age, to whether they have children.
content for each visitor through effective real-time personalisation. The
insurer decided to explore the opportunities this approach could deliver.
Solution
Celebrus CDP was adopted to take advantage of the tag-free, multi-
channel 1st party data capture. This solution enabled them to execute
real-time website personalisation while simultaneously testing the
wide range of new banners, ads, and campaigns they created.
After conversion, the company can see which banner the customer
saw, compare it to their life stage, and draw a relevant conclusion from
the data. Information is presented to the company via dashboards,
enabling easy and rapid assessment of the performance of each new
banner or campaign.
The solution provided instant and low-cost deployment with a single
line of code - no tagging required. The data collected is instantly
contextualised and written into a business-friendly data model in the
The company embarked on a program of delivering personalised
insurer's existing data, providing instant and low-cost access.
online banners and advertisements to customers based on life stage
information. This information is captured online during a five-stage
Celebrus enabled us to extract an unprecedented granular
level of detail from each of those campaigns. It enables us
to look back at every single customer visit to the web site
step by step and analyse behavior.
13
D4t4 Solutions plc Annual Report and Accounts 2022 Chairman’s statement
Transitional year whilst
delivering market expectations
I’m very pleased with the progress that we have made over the last
this year. I would personally like to take this opportunity to thank Jim
year. This has seen a transition to a restructured board, a strengthened
and Mark for all their hard work and support over the years.
management team, improvements to our corporate governance and
the production of our first ESG report. It has also seen investment into
a new product launch, an acquisition and significant ARR growth, all
whilst delivering market expectations for revenue and adjusted profit
before tax.
As I outlined in last year’s statement, during this past year we have
restructured the board to create a leaner board focused on strategy
and governance, with the creation of an Operations Board to focus
on execution of the strategy. We believe this is the right structure to
deliver growth in future periods. The board now consists of three non-
executive directors and two executive directors. Peter Kear stepped
down from the board on 31 March 2022 and left the Group on 30 June
2022, after a successful handover of the CEO role to Bill Bruno. We
thank Peter for his contribution to the Group’s success over the last 37
years and wish him well for his retirement. In June 2021, Jim Dodkins
and Mark Boxall stepped down from the D4t4 Board. Jim continues to
work for D4t4 on a part-time basis whilst Mark left the Company earlier
The Nominations Committee undertook two major searches last year
for the roles of CEO and CFO and we are delighted to have chosen Bill
Bruno, as CEO, who was previously our VP North America, and Ash
Mehta as CFO who has a track record in growing public companies.
Since his appointment in August 2021, Bill has created a Group
Operations Board with the successful recruitment of key talent into
vital roles such as VP Global Sales, VP Marketing, Head of HR People
and Culture and most recently a Chief Security Officer. The latter role
signifies the importance we place on information security and the
trust our multinational customers place in us in helping them manage
their critical data. With this management team in place, I am confident
we have the right people to drive future growth.
With the change in board structure, we have taken the opportunity to
review and strengthen our corporate governance with the adoption
of new Terms of Reference for our Board committees as well as a
new Matters Reserved for the Board schedule, in line with current
best practice. This clarifies the split of responsibilities between the
main Board and the Operations Board ensuring firm oversight of
operational matters.
I’m pleased to report that we have produced our first ever ESG report,
having appointed consultants to undertake a carbon audit. The report
provides a valuable insight into our carbon footprint and actions
we plan to take to reduce our impact on the environment, as well as
outlining how we interface with our communities and protect and
support our employees.
During the year, we launched a new product, the Celebrus Fraud
Data Platform, to address the needs of our customers in protecting
their end-customers in real-time across all digital devices, using
automated behavioural touchpoints. Fraud is an ever-growing threat
causing distress and financial loss to a growing number of victims,
14
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT "We have
successfully executed
a year of transition which
positions us well for
future growth"
and the current regulatory focus on addressing this problem creates
Therefore, I’m delighted to announce that as a result of the Group’s
a strong opportunity for our product especially as regulators move
healthy cash balance, the board is also proposing a special dividend of
towards holding banks fully responsible for compensating customers
12.5p per share payable to shareholders on the register as at the close
who become victims of fraud. This provides an impetus to banks to
of business on 7 October 2022. The special dividend is expected to be
address the issue to avoid such losses. Our first sale of FDP was made
paid on 27 October 2022.
in December 2021 and with several organisations currently trialling the
product, we anticipate further contract wins in the coming months.
The Group’s significant progress in the year is a testament to our many
staff across our four locations around the world and I thank them
As well as launching FDP, during the year we have made numerous
for their efforts, especially during a period when we have had the
product developments to our CDP product to maintain our competitive
instability of intermittent coronavirus lockdowns still ongoing. We are
advantage in the market and add further value to our customers.
increasing our focus on our people. The new Executive team is evolving
Against this backdrop of significant change within the business, we
have successfully met market expectations delivering on Revenue and
Adjusted Profit before Tax, as well as growing ARR by 32%, generating
cash and paying a growing dividend.
the Group culture to be one which is more empowered, accountable
and enjoyable, as we aim to become an even better company to work
for. This is vital in a global economy, post-lockdown, in which there is a
shortage of talent and intense competition for good people.
The Board is today proposing a final dividend, subject to shareholder
approval at the 2022 AGM, of 2.07p per share which along with the
Outlook
We start the new financial year in a good position with products
interim dividend paid of 0.85p per share in January 2022 brings the full
well aligned with market requirements and trends, a strengthened
year dividend to 2.92p per share, an increase of 3.9% over last year. The
management team, a healthy cash balance, and most importantly a
final dividend is expected to be paid on 24 August 2022 to shareholders
strong pipeline of sales opportunities. I’m delighted to say that the
on the register as at the close of business on 15 July 2022.
Board is highly confident in the Group’s strategy and our ability to deliver
Whilst the Group has increased investment in recent years, cash
generation continues to be strong. The board has considered uses for
the cash, and although the search for acquisition opportunities is an
ongoing one, with no such opportunities in sight the board will focus
investment on organic growth, in the knowledge that our product set
is market-leading, and the market opportunity is large.
We will maintain a regular dialogue with shareholders on potential
uses for the cash, but even after allowing for all investments that may
be required as we continue to grow, the Board is of the view that we
are in a position to return some excess cash to shareholders.
results and create significant shareholder value in the coming years.
Therefore, we will continue to invest wisely where we see opportunities
for good returns on investment.
Peter Simmonds
Chairman
6 July 2022
15
D4t4 Solutions plc Annual Report and Accounts 2022 STRATEGIC REPORT
Chief Executive Officer’s statement
Building blocks to drive
and manage growth
I’m delighted to present my first annual statement to shareholders since
taking on the CEO role in October 2021, and I’d like to thank Peter Kear,
Strategy and Market trends
Our strategy remains unchanged, with the key objective being to grow
the outgoing CEO, for his contribution to building the company we
ARR through increased sales of CDP and FDP to customers. The market
have today. We have market-leading products which can form the basis
trends during the year have been in our favour and we aim to capitalize
of a sizeable business, creating significant shareholder value over the
on these in the coming year through our strengthened Sales and
coming years.
Marketing teams.
Since my appointment, our Chief Financial Officer and I have been
For the CDP product, the trends towards greater control of privacy
focused on implementing the building blocks to drive and manage the
of data are evidenced by the deprecation of third-party cookies,
growth we anticipate. Core to this has been ensuring that the business
the impacts of Apple Intelligent Tracking Prevention (ITP) and other
is scalable and that we minimise the growing pains that arise during
browser changes relating to privacy for consumers. Celebrus CDP is not
periods of growth. This covers ongoing investment into a number
impacted by any of these as we help our clients collect first-party data,
of areas including internal systems, processes, reporting, employee
utilising our IP, which is not affected by these trends in the way that our
empowerment and accountability and not least company culture.
competitors’ products are. Our approach to compliance, identity, and
This is being undertaken in parallel with ensuring that the day-to-day
business continues to perform, and I’m pleased to report a good set of
financial results for the year ended 31 March 2022 (“FY22”) with Revenue
up by 7.3% during the year and a very healthy growth in ARR of 32%.
16
instant data activation provides us with a strong go-to-market strategy.
This ultimately has allowed us to retain and upsell our existing account
base, while also building significant pipeline activity through both key
partners and our direct sales capacity.
On the fraud side, there are two key trends: the speed at which fraud
occurs and the ongoing regulatory discussions in many jurisdictions
about reimbursing consumers who are victims of scams. This regulatory
trend is strongest in Europe, and like GDPR which was a European
initiative, we believe best practice will quickly be adopted around
the world. With millisecond data capture and contextualization, our
Celebrus FDP ultimately helps brands catch the fraudster before
the fraud. The data that we capture offers unique and differentiated
solutions for preventing scams, saving banks millions of pounds and
ultimately protecting consumers.
Products and technologies
Of course, despite market trends being in our favour we continue to
develop functionality to maintain our market leading position in the
realm of data capture, data contextualization, and data management.
During the year, we added another 100+ automated marketing signals
to CDP providing customers with greater ability to identify and convert
valuable potential end-customers, as well as adding the world’s only
first-party real-time Identity Graph to better identify end-customers
across a range of devices they might be using.
D4t4 Solutions plc Annual Report and Accounts 2022 We have continued our commitment of providing two major
platform updates each year for the Celebrus CDP and FDP, which is
driven by our product roadmap. That roadmap has several inputs:
our experience and expertise, feedback from our customers during
Advisory Board meetings, our Partners, and research projects within
our Engineering team which we continue to grow.
Our technology focus is on innovation and differentiation and the
ability to cater for the ever-growing needs of our customers. Most
recently, this was demonstrated by our ability to rapidly establish
CDP to be HIPAA compliant in the United States. HIPAA is a series of
regulations covering the use and disclosure of health information
in the United States, and CDP compliance is a requisite for our
healthcare customers.
In June 2022, our technologies received recognition from The Global
InfoSec Awards in the categories of “Most Comprehensive in Identity
Management” and “Most Comprehensive in Account Takeover
Protection”, as well as from IDC MarketScape which named Teradata
Vantage (powered by Celebrus CDP) as a “Leader” in the CDP market.
We will continue to innovate our Celebrus CDP and FDP to ensure we
remain differentiated and are able to solve some of the most complex
data challenges in the industry today.
"Our strategy remains unchanged,
with the key objective being to grow
ARR through increased sales of CDP
and FDP to customers. The market
trends during the year have been in our
favour and we aim to capitalise on
these in the coming year through
our strengthened Sales and
Marketing teams."
We believe that the industry trends described above make this an
opportune time to build up the direct sales channel, to supplement
our partner’s efforts with our own direct approach. This will support
our objective of accelerating sales growth by building as many
revenue streams as possible to create a stronger pipeline for better,
sustained growth in the coming years.
Route to market
This past year had some great wins for our business, including our first
contracted customer for FDP just six months after its launch in June
2021. This was an existing customer: a major financial institution in the
United States, and they upsold to both our CDP and FDP in addition to
our existing CDM relationship with the bank. We are in dialogue with
other existing customers, particularly in the Financial Services and
retail sectors, and we have built up our partner program in the fraud
sector to build a healthy pipeline of FDP opportunities.
Partners
We have had some great success in our key markets with technology
partners including Teradata, Pega, SAS, Quantexa, and Dell. We have
deepened our relationships with partners at a corporate level but also
at a local level across all territories to reinforce the value-add that
CDP and FDP provide to partner offerings. This is illustrated by the
announcement, in May 2022, that CDP will be integrated into Always-
On Insights, a new offering combining the capabilities of Pegasystems'
Customer Decision Hub™ with Celebrus CDP.
Our customer success team, boosted by the addition of the Prickly
Cactus team acquired in August 2021, has done a great job instilling
new account management disciplines and focus and expanding our
relationships with existing accounts, while our new business team has
continued to win in our core markets of Financial Services, Insurance,
Healthcare, and Telcos.
We launched our API connector in v9.5 of our CDP and FDP product
last November, and at that time we signaled to the market that we
would focus on bringing our data together with leading technology
across the globe in a meaningful and simple way that creates a
synergistic offering for our customers. I’m pleased to say that we are
in discussions about new partner opportunities that bring a unique
offering to our customers, and we look forward to further progress on
We continue to focus on driving pipeline and measuring what is
this in the coming year.
working and what isn’t in the market so that we can learn and adapt
rapidly around the globe.
Traditionally our business has gone to market exclusively via partners.
While that continues to be a strategic pillar of our business, during the
year we began to build a direct sales channel. This has already yielded
success in the United States, and we are now supporting a global
rollout of direct sales via our restructured and better-aligned Sales and
Marketing teams.
In addition to technology partners, we continue to seek opportunities
to expand our Solution Integrator (SI) partnerships. While we focus on
innovating our software and IP, we need partners that can efficiently
implement these platforms to assist our objective of building a
scalable business and minimising growing pains. This approach will
also help us manage costs as we grow. We are building a partner
toolkit encompassing training and certifications for SI partners for
rapid onboarding and success.
17
D4t4 Solutions plc Annual Report and Accounts 2022 STRATEGIC REPORT
Chief Executive Officer’s statement continued
Branding
Since the year-end, we have revamped the branding not only of our
The role of Head of HR, People, and Culture is a crucial one because
we regard an effective culture established and created by our talent
Celebrus product family, but also of the D4t4 brand. The new branding
throughout the business as critical in building high-performance
is the work of our Marketing team led by our new VP Marketing
teams to drive our growth plans. That culture will be one of openness,
based in the United States and is more representative of our ethos,
empowerment, and accountability.
messaging, and approach to the market. The message is simpler,
conversationally sophisticated, and focuses on being a disruptor in
the market. The new branding has enabled us to align Marketing and
Sales more closely around the globe to ensure better coordination
and success in the coming year.
The Chief Security Officer role is also a vital part of our strategy in the
coming year. Whilst the Group has always placed data and cybersecurity
high on its priorities the increasing complexity in this area demands a
role dedicated to this activity.
I’d like to thank all our employees around the world, who have
Robust systems to support growth
We have been busy in the year improving transparency, accountability
helped us deliver great results in this past year, during a time of global
economic uncertainty, and internal transformation and change.
and reporting whilst establishing greater automation with a view
to creating a group-wide systems infrastructure to better support
scalability and growth.
We recognise the competitive global environment for talent, and we
believe that the new culture will provide greater engagement and job
satisfaction for our employees which we will consider supplementing
We have implemented a new Customer Relationship Management
with further enhancements to remuneration and benefit packages
system to support our Sales Strategy. This system will manage our
where appropriate.
customer lifecycle all the way from lead generation to winning new
customers through to customer satisfaction and advocacy.
Outlook
We are also implementing an HR system which will enable us to
automate and better manage key HR processes, and most importantly
better engage and communicate with our employee base in four
countries and time zones.
We have started to implement a new Finance system which will provide us
with better visibility and granularity into our performance to support our
initiative of increased empowerment and accountability for our teams.
These systems will set up our teams for better, measurable success and
create transparency for our teams globally to better understand what
we are trying to do as a business and the role they play in helping us
achieve our goals. These systems and processes will also help us create
better accountability amongst our leaders across the business, a key
Our goal in the year ahead will be to continue to improve our go-to-
market approach, rapidly develop new partners, and ensure our brand
platform and market share continues to grow. These targeted measures
are what we believe will deliver ARR growth and shareholder value.
We will also continue to invest into sales and marketing activities and
product development whilst ensuring we can still generate healthy
profits and cash for future investment. It’s important that we look
ahead, as part of our three-year plan, to ensure we are investing in the
right places now to support that desired growth.
As well as seeking organic growth, we will continue to monitor the
space for potential acquisition opportunities to grow the business or
bring bolt-on technology into our CDP or FDP products.
value of our culture, so that we can make efficient decisions globally.
We have started the new financial year with a stronger pipeline,
Our employees
From a people perspective, we have restructured the business and
brought in top talent to drive growth in our key markets. We formalized
the Operations Board, established our Leadership Team, brought in
new talent to the global roles of VP-Marketing and VP-Global Sales both
in the United States, as well as creating new roles such as Head of HR,
People, and Culture and Chief Security Officer both in the UK.
18
revenue already committed to the current financial year, solid growth
in ARR. I believe we have an experienced team that can deliver, and I
am optimistic about the year ahead.
Bill Bruno
Chief Executive Officer
6 July 2022
D4t4 Solutions plc Annual Report and Accounts 2022 Q&A with Bill Bruno, CEO
You’ve strengthened your team significantly over
the last year. What attracts a new joiner to D4T4?
When people see the technology we have, they are blown
away. They realise the potential for the business immediately
because of the competitive advantage our products have
over competitors. Also we have a virtuous circle of good
people attracting more good people to the company, that can
capitalise on the potential of the products. Since I became
CEO, we have been fortunate to have recruited top talent into
Sales, Marketing, Finance/HR, Security, Fraud, and Delivery
Services to carry the business forward to the next level.
What have been your biggest challenges since
becoming CEO and how are you addressing these?
I don’t think the challenges are any different for me than
anyone else who has come in as CEO to a business with the
legacy that D4t4 has. To be honest, I welcomed the challenge
and joined this business years ago because I believed in its
potential. So, for me, it’s less about the challenges and more
about the opportunity. That being said, every business has
its challenges, and as CEO the most important thing to do
is figure out the right balance for bringing change into an
organisation rapidly when you see the opportunity in front of
you and know you don’t have unlimited time to go through
that door.
What are the current industry trends and
how do they affect D4t4?
This answer could be a thesis if I wrote them all out, but let’s
give you a quick read on the Marketing and Fraud side. On
the Marketing side, the main topics you hear about are the
deprecation of third-party cookies, the impacts of Apple
Intelligent Tracking Prevention (ITP) and other browser
changes, and privacy/compliance for consumers. I’m happy
to report that the Celebrus CDP is not impacted by any of
these and offers a market-leading solution for compliance.
On the Fraud side, there are two trends: the speed at which
fraud occurs and the ongoing regulatory discussions in
the UK (and eventually globally just like GDPR) about
reimbursing consumers who are victims of scams. With
millisecond data capture and contextualisation, our Celebrus
FDP ultimately helps brands catch the fraudster before the
fraud and the data that we capture ultimately offers unique
and differentiated solutions for preventing scams as well.
What has been the response of existing Celebrus
clients to the fraud product launch?
It’s easy to forget that we launched this platform from scratch,
not long ago, in June 2021. We had our first paying customer in
December 2021, a mere six months post-launch. We now have a
good number of existing accounts in conversations and various
stages of testing the new platform. We have new partners on
board that believe in our product and speak highly of it. It’s
easy to get impatient, because you want to see quick results
and payoffs, but I’m extremely happy with the pipeline and
opportunity in front of us in the coming year for Celebrus FDP.
What USPs does D4t4’s product have as
compared with other anti-fraud offerings?
I’m not going to give away our entire sales approach, but
many of the solutions we come up against are third-party
in nature. This means the brands don’t own the data and
therefore can’t retain it for as long, and so they lose the
ability to identify the customer when they come back to the
website, say, a few months later. They also don’t capture
anywhere near the level of data and granularity that we do,
and so only provide a “black box” approach to fraud scoring,
and ultimately are unable to truly manage digital identity.
Is the selling process different between the CDP
and FDP products?
The process is different in that it’s a different business
language, talking to a different team in the customer
organisations we work with. Marketing teams which buy
CDP are primarily driven by competitive pressure to improve
customer experience and increase revenues, whereas Fraud
teams are primarily concerned about reducing losses to
their business of their customers whilst not undermining the
customer experience, and increasingly they are also under
regulatory pressure to reduce fraud. In response to the
difference, we’ve been fortunate to bring on Fraud expertise
in the US and the UK to drive our global positioning and
support our sales teams in key markets.
And finally, what do you do when you’re not
working?
I’m a big proponent of ensuring that you have hobbies
and outlets to balance out life. It can’t always be about
work. Semi-related to our industry, I have a podcast called
Analytics Neat which I suppose also highlights my love of a
good bourbon. I play golf quite a bit and enjoy woodworking
as a hobby as well. For those that have been on camera with
me, you’ve also probably noticed that I collect action figures
and other collectibles.
D4t4 Solutions plc Annual Report and Accounts 2022
19
19
D4t4 Solutions plc Annual Report and Accounts 2022 Key performance indicators
Measuring our performance
Revenue
£24.5m
ARR
£14.0m
2022
2021
2020
24.5
22.8
21.8
2022
2021
2020
14.0
10.6
9.6
Revenue is a KPI because it reflects the work we are doing,
ARR is an important metric as it is an indicator of valuation of
and the monies received over a period of time for that work.
software companies. Investors value the certainty of knowing
It is driven by new sales, renewals, and upsell/cross-sell to
that there is revenue which will recur year after year from
existing customers and includes licenses, hosting, support and
customers who derive benefit from D4t4’s products.
maintenance, as well as one-off project work and third-party
hardware and software sales.
Links to strategy
A B C D E
F
Links to strategy
A B C D E
F
Adjusted profit before tax
£3.3m
ARR as % of total revenue
57%
2022
2021
2020
3.3
4.5
5.1
2022
2021
2020
57
47
44
Adjusted profit before tax is a key indicator because it
ARR as a % of total revenue indicates our progress to improve
approximates to the cash generation of the ongoing operations.
the quality of revenues by making a higher percentage of them
It excludes non-cash items such as amortisation, foreign
recurring revenues. This includes converting existing customers
exchange gains/losses, and share-base payment charges etc,
from perpetual licenses to term licenses as well as adding new
as well as exceptional one-off costs. See note 5 on page 102 for
customers on a term license ARR basis.
reconciliation of Adjusted profit before tax.
Links to strategy
A B C D E
F
20
Links to strategy
A B C
D E F
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Links to strategy
A
B
C
ARR
Building for scale
Culture
D
E
Grow CDP and FDP revenues
Innovate and differentiate
F Diversify revenue streams
Adjusted diluted EPS
7.1p
7.1
9.5
11.2
2022
2021
2020
2022
2021
2020
Learn more about our strategy on pages 6-7
Dividend
2.92p
2.92
2.81
2.67
Adjusted diluted EPS is driven from the Adjusted profit before
The Dividend is a key metric, as many shareholders value the
tax figure and indicates the adjusted profit per share to provide a
cash payment to them, but this metric is one that is considered
like-for-like calculation of value creation per share per year.
extensively by the board balanced against the need to invest
surplus cash into growing the business.
Links to strategy
A B C D E
F
Links to strategy
A B C D E
F
Net assets
£31.9m
Cash
£11.4m
2022
2021
2020
31.9
30.9
29.3
2022
2021
2020
11.4
14.2
12.8
The net assets indicate the net value of the assets and liabilities
Cash is a key metric as it provides assurance on our ability to
of the business and are important as a key metric to illustrate the
invest to grow the business as well as make dividend payments
impact of profits and dividend payments on the value retained
to shareholders. It also provides comfort to customers from a
by the company.
vendor risk perspective.
Links to strategy
A B C
D E F
Links to strategy
A B C
D E F
21
D4t4 Solutions plc Annual Report and Accounts 2022 Chief Financial Officer’s review
Delivering results
in a year of change
Overview
This has been a year of strong financial performance which is all the
Income Statement
Group Revenue grew 7.3% to £24.5m (FY21: £22.8m) during a year
more pleasing given the significant organizational change we have
when the ongoing impact of the pandemic along with the global
been making over the same period.
economic situation continued to slow down buying decisions by our
Whilst investing significantly in our new FDP product we have
delivered against expectations on Revenue and Adjusted PBT, as
well as increasing Annual Recurring Revenue by 32%. The overall
performance and financial position of the Group provides us with
ample comfort to be able to increase the full year dividend by 3.9%
prospective customers. However, the quality of revenues increased
significantly, with ARR growing 32% to £14.0m (FY21: £10.6m) and now
accounting for approximately 57% (FY21: 47%) of revenues. We expect
this ratio to continue to increase up to a level of around 65% in the
medium term.
over last year, as well as propose a special dividend of 12.5p per share.
The gross margin was 51.9% (FY21: 62.4%) due to a change in mix
During the year, we also strengthened the business by an acquisition
which provides us with improved account management expertise to
better service, maintain and grow share of wallet with our new and
existing customers alike.
We undertook a share buyback programme to hold shares in Treasury
to mitigate the dilutive effect of future share option exercises.
We believe that all these measures along with additional steps
described below put us on a strong footing for future growth.
of revenues. In the year there was a higher proportion of third-party
products supplied to customers which have a much lower gross
margin than the other revenue streams. We expect this to revert in the
current year to a figure in line with historic levels.
Operating expenses reduced during the year to £11.0 million (FY21:
£11.2 million). This includes restructuring charges of £0.4m (FY21: £0.1
million) arising from the board changes and creation of the Operations
Board. The average number of employees increased during the year to
149 (FY21: 139) primarily due to investment into Sales and Marketing
and addition of staff with domain expertise in the fraud space.
The adjusted profit before tax was £3.3 million (FY21: £4.4 million),
whilst the unadjusted profit before tax was £1.8 million (FY21:
£3.0 million). The increased difference between the adjusted and
unadjusted figures is due to a higher non-cash charge for share-based
payments arising from share option grants during the year of £0.7
million (FY21: £0.3 million) and restructuring costs of £0.4 million
(FY21: £0.1 million).
22
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT "The Group ARR grew by £3.4m
to £14.0 million... for the first
time... the ARR value accounts
for more than 50% of
Revenues, with a value
of 57%"
Foreign currency risk
There was a high degree of volatility during the last few months of the
Trade debtors were high at £25.0m (FY21: £10.2m) due to two of our
major partners paying just after the year end. Both of these partners
year. This impacts the Group which has around 70% of revenues in US
account for a number of end clients and the payments were received
Dollars, but just 37% of Group expenses. The Group’s tighter policies
during April.
and management of foreign currency risk meant that the foreign
currency loss was £0.1 million (FY21: £0.7 million).
Taxation
Taxable profits were lower for the year and the tax charge is also lower
for the year at an effective rate of 3.9% (FY21: 9.0%). This low level is
assisted by our significant investment into research and development,
much of which qualifies for R&D and Patent Box tax credits in the UK.
Proposed changes to qualifying costs under the UK R&D tax credit
scheme may result in smaller claims being made in future, and a
higher effective tax charge.
The cash balance at the year-end was £11.4 million (FY21: £14.2 million)
for the reasons described above. Due to the size and financial strength
of our end customers, credit risk is not a major risk for the Group
and bad debt write-offs during the year were nil (FY21: nil). Following
the partner payments mentioned above the free cash balance had
increased to £26.5]million as at 30 June 2022.
Cashflow and funds
The Group used net cash in operations of £0.7 million (FY21: net cash
generated £3.3 million) primarily due to movements in working capital
from the delayed payment of debtors as described above.
Financial position
The Intangibles balance of £10.3 million (FY21: £9.6 million) is
Financing activities in the year were £1.5 million (FY21: £1.7 million)
comprised mainly of dividends paid of £1.1 million (FY21: £1.1 million)
comprised of Goodwill of £9.4 million (FY21: £8.7 million) from the
and a net purchase of own shares of £0.4 million (FY21: £0.9 million).
acquisition of Celebrus in 2015, and £0.7 million from the acquisition
of Prickly Cactus during 2021. The balance of £0.8 million (FY21: £0.9
million) is comprised of purchased IPR, trade names and capitalised
development costs. The Group expenses the majority of its R&D costs
The Group continues to be debt free and maintains a robust financial
position whilst having claimed no funds from any government support
schemes.
and capitalized just £0.2 million in the year (FY21: £0.2 million).
The healthy cash balance is important not just to enable the Group
Trade creditors decreased to £0.8 million (FY21: £1.4 million); this was
due to normal operating cycles. The Group seeks to pay all suppliers
within terms and the supplier payment days at the year-end were 25
days (FY21: 40 days).
Deferred revenue increased to £14.2 million (FY21: £6.3 million) partly
due to a number of three-year contracts signed during the year, as
to invest in future growth as appropriate, but also to counter any
concerns about vendor risk from our customers, who are typically
large multinational businesses.
Annual Recurring Revenue
We define ARR as the amount of revenue contracted with a customer,
at a given point in time, that is expected to recur within the next
well as payment for services due to be delivered in the first half of the
twelve months. As a recognised driver of shareholder value in software
current year.
businesses we use this as one of our primary metrics.
23
D4t4 Solutions plc Annual Report and Accounts 2022 Chief Financial Officer’s review continued
Group ARR grew by £3.4m to £14.0 million (FY21: £10.6 million) during
the year. The current ARR is comprised of Licenses of £6.3 million
Dividend
The Board is today proposing a final dividend, subject to shareholder
(FY21: £3.0 million) and Support and Maintenance of £7.7 million
approval at the 2022 AGM, of 2.07p per share (2021: 2.0p), which along
(FY21: £7.6 million). Therefore, for the first time since the Group
with the interim dividend paid of 0.85p per share (2021: 0.81p) in
announced the move to an ARR model the ARR value accounts for
January 2022 brings the full year dividend to 2.92p per share (2021:
more than 50%, with a value of 57% (FY21: 47%).
2.81p), an increase of 3.9%. The final dividend is expected to be paid
We see future growth in ARR coming primarily from CDP and FDP sales
and expect that the ARR/Revenue ratio could reach around 65% in
on 24 August 2022 to shareholders on the register as at the close of
business on 15 July 2022.
the medium term. We have some existing CDP customers still under
The board is also proposing a special dividend of 12.5p per share,
perpetual license that we will seek to convert to term licenses with
subject to shareholder approval at the 2022 AGM, payable to
ARR. Moreover, all new proposals to prospective customers are being
shareholders on the register as at the close of business on 7 October
issued as term licenses.
2022. The special dividend is expected to be paid on 27 October 2022.
Acquisition of Prickly Cactus
In August 2021, the Company acquired Prickly Cactus Limited
Purchase of own shares
In December 2021, the Company commenced a share buyback
("Prickly Cactus"), a UK data and analytics consultancy, for up to
programme to acquire up to 200,000 ordinary shares of 2p in the
£0.75 million. The Prickly Cactus team is experienced in product
capital of the Company. The shares will be held for the purpose of
management having previously worked with several of D4t4's partners
satisfying future obligations in relation to its employees' or other share
and customers in the key markets of Financial Services, Telecoms
schemes, thereby mitigating dilution for existing investors.
By 31 March 2022, 64,434 shares had been acquired at an average
price of 291p bringing the number of shares held in Treasury to
224,932. Since the year end, the programme has continued and the
shares held in Treasury now total 268,936.
Equity
At the year end, the Group had £31.9 million (FY21: £30.9 million)
attributable to the shareholders of the company. The increase in the
year was mainly due to retained earnings in the year of £1.7 million
(FY21: £2.8 million) set off against dividends paid during the year of
£1.1 million (FY21: £1.1 million), and share buybacks of £0.4 million
(FY21: £0.9 million).
Ash Mehta
Chief Financial Officer
6 July 2022
and Insurance. Since the acquisition the Prickly Cactus team has
been instrumental in deepening our relationships with existing
customers identifying opportunities for greater customer engagement
and satisfaction as well as helping develop relationships with new
customers and partners.
A sum of £0.5 million is held as Deferred Consideration payable to
the Prickly Cactus vendors (all of whom have been retained by D4t4)
in the Statement of Financial Position contingent upon the team’s
contribution to existing customer growth and the acquisition of new
customers for the CDP and FDP product groups, in the period from
acquisition to September 2023.
Earnings per share
Basic EPS for the year was 4.21p (2021: 6.88p) and diluted basic EPS
was 4.14p (2021: 6.75p). The basic figure has been calculated using the
weighted average number of shares in issue being 40,240,799 (2021:
40,235,856) and the diluted figure using 40,966,020 (2021: 41,007,252).
Adjusted basic EPS was 7.24p (2021: 9.72p) and adjusted diluted EPS
was 7.11p (2021: 9.53p) following adjustments for amortisation, share
based payments, exceptional items, foreign exchange expense and tax
on these adjustments.
24
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT
Q&A with Ash Mehta, CFO
Your business has traditionally been very second
half weighted. Is there an opportunity to balance
this out more?
Yes there is and we’re working on it. Historically, the H2
weighting has been due to our partners having December
year ends and closing deals in December, which is in our H2
(October to March). As we expand our direct sales efforts, the
phasing should spread out more than before. Having said that
potential customers with December year ends might wait until
a new budget year to sign with us in January to March, which
is still our H2. So, we’ll probably always have an H2 weighting
but in the long run we’d like to see the H1:H2 ratio move to be
around 40:60.
Why did you choose the key metrics you use?
For D4t4, the most important key metric is Annual Recurring
Revenue because it’s a commonly used metric for the
valuation of software companies. This year we’ve been able
to drive it up by 32% to £14 million. We define ARR as the total
of all live contracts and the annual license, maintenance and
hosting value of those contracts at a point in time; it is revenue
which we can generally depend upon as a baseline. The
ultimate aim is to get the cost base of the company covered
by ARR so that anything more in terms of professional services
effectively flows down to the profit line.
How far along are you on the journey to
transition your business to a more recurring
revenue model and what could be long-term
targets here?
We’ve made great progress this year, moving the percentage
of revenues which are ARR from 44% to 57%. That’s the first
time we’ve gone above 50% and we’re now aiming to get to at
least 65% in the long term.
How has the Prickly Cactus acquisition performed?
We’re very pleased with the acquisition. The Pricky Cactus
guys have not just helped us deepen relationships with
existing customers, they’ve also put in place processes for
that type of engagement to become the norm across all our
customer interactions. This results in closer relationships with
customers helping us ensure customer satisfaction, greater
engagement and more revenue opportunities, and that churn
levels remain very low.
What are your intentions for the group cash
balance?
The cash serves a number of purposes. As most of our
customers are large multinationals signing up for multi-year
contracts, it mitigates any vendor risk concerns they might
have. Secondly, we will continue to pay dividends as they
are expected by many of our shareholders. And thirdly, it is
available if we need it for acquisition opportunities.
How do you manage the balance between
increased investment and continued profitability?
This is a continuous discussion between me, and the board.
It’s a delicate balance between investing into initiatives that
will accelerate revenue growth, whilst also wanting to remain
profitable and cash generative. Unsurprisingly, as a business
we’re very data driven and so the new systems we implement
will help guide us in our decision making and getting the
balance right!
D4t4 Solutions plc Annual Report and Accounts 2022
25
25
D4t4 Solutions plc Annual Report and Accounts 2022 Principal risks and uncertainties
Undertaking insightful
risk management
D4t4 faces the normal economic, commercial and political risks facing a global technology
business with employees, customers and suppliers spread across the world.
To manage these risks, the Group has a Risk Committee with a regular and detailed process to address the identification of new risks and monitor
development of existing risks and their mitigation. This Committee is comprised of the Chief Technology Officer, Chief Financial Officer, the Chief
Security Officer, Director of Managed Services and the Manager of Information Security. Other employees of the Group are invited to Committee
meetings as required, depending upon the topic being discussed. Further detail on the structure, remit and reporting of the Group’s Risk
Committee is explained on page 62 of this Annual Report.
During the year, the risk level of a number of the principal risks and uncertainties mentioned below has changed from the last Annual Report for the
reasons given in the table. The Board is confident that it has the appropriate people, processes and reporting to continue to manage risks effectively.
Principle risks
The Group’s principal risks are
identified as those risks which have the
potential for the highest impact on the
Group. The Board reviews the principal
Global economy
Execution and scalability
Regulatory changes
risks annually along with the mitigation
Competition
Client or partner loss
Information and cyber security
People
Foreign exchange losses
measures in place.
26
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Decrease
Increase
No change
Global economy
Execution and scalability
Regulatory changes
Changes in the global economy can have
an impact on the business. The rate of
inflation has increased around the world,
and this has implications for costs in our
customers’ and prospective customers’
businesses. Consequently, they might be
slower to commit to new projects or renew
existing projects.
As the Group has a plan to accelerate
Sales and Revenue growth, there are risks
of not being able to achieve appropriate
Sales levels, as well as the risk of not being
able to deliver projects which are signed
up. There is also the risk of the Group’s
back-end infrastructure not being able to
support the growth.
The Group is exposed to the risks of
changing regulations for the collection of
consumer data. Some of these changes
may be positive, but others negative
which could impact on D4t4’s performance
and outlook.
Risk level
Risk level
This is a new risk after many years of low
inflation, and the full effects are not yet
known. Inflation could have an impact
on the Group’s cost base resulting in
lower profitability.
The plans for accelerated growth will
require every department to function
more effectively and this may cause
growing pains, resulting in lower quality of
execution and delivery.
Risk level
No change
Mitigation
Mitigation
Mitigation
The Group will monitor the market for
price sensitivity amongst prospective
customers and engage more closely with
existing customers to demonstrate value
for their spend on our products. It will also
engage with suppliers more closely to
manage cost increases.
The Group has increased the size and
capability of its Sales and Marketing
teams during the year. It is also investing
into internal systems to better manage
and support the business. Finally, we are
examining the possibility of appointing
delivery partners who could manage
project implementations.
D4t4 closely monitors the markets in which
it operates with enhanced collaboration
with our clients, suppliers and partners.
We then plan product, project or
operational changes to ensure we are
minimising the impact of changes. We
follow proposed regulatory changes
closely and where necessary adapt our
processes and policies.
Links to strategy
A B C D E F
Links to strategy
A B C D E F
Links to strategy
A B C D E F
Links to strategy
A
B
C
ARR
Building for scale
Culture
D
E
Grow CDP and FDP revenues
Innovate and differentiate
F Diversify revenue streams
Learn more about our strategy on pages 2 to 13
27
D4t4 Solutions plc Annual Report and Accounts 2022
Principal risks and uncertainties continued
Decrease
Increase
No change
Competition
Client or partner loss
Information and cyber security
New competitors or changes to existing
competitors’ products can significantly
alter the market dynamics, which in
turn risks the position and standing that
our own Intellectual Property has in the
financial and consumer marketplace.
The loss of a key client or significant sales
partner would impact the ability of the
Group to meet its key business objectives.
A significant IP, data loss, or security
breach could impact the brand and
reputation of the Group, as well as cause
the Group to spend a great deal of time in
rectifying the loss or breach.
Risk level
No change
Risk level
No change
Risk level
From our own assessments, along with
industry and governmental publications it
is clear that information and cybersecurity
risk is growing worldwide.
Mitigation
Mitigation
Mitigation
The Group continually scans the market
for potential technology threats and has
a development process in place to ensure
its own technology continues to evolve
to meet client needs. We are seeking to
develop technology that cannot be easily
disrupted, and which can be protected
by patents.
During the year we have deepened
relationships with existing partners. We
have also brought new partners on board
thereby reducing the dependence on any
single partner. Moreover, our efforts on
building a direct sales channel will, over
time, further reduce dependence on any
individual partner.
Following the year end we appointed a
Chief Security Officer, Tony Bennett, to
a new dedicated CSO role in the Group.
Mr Bennett is now a member of the
Operations Board to ensure that security is
high on the Group’s agenda.
In addition, we are certified to ISO 27001
and operate an information security
process that controls and minimises the
risks. This process is externally assessed
yearly. These risks are mitigated via
existing and established information
security controls.
Links to strategy
A B C D E F
Links to strategy
A B C D E F
Links to strategy
A B C D E F
28
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT
People
Foreign exchange losses
A loss of or failure to attract key personnel
could impact the ability of the Group to
execute on its strategy, causing adverse
reputational, operational and financial
challenges.
Significant changes in foreign exchange
rates can result in reduced profitability
due to cash collection values not
matching transaction values and an
increased potential for currency losses in
the income statement.
Risk level
Risk level
This is an increased risk due to the global
shortage of talent. This might make it
more difficult to recruit and retain talent to
support our growth plans.
In the last six months, there has been
increased volatility in currency markets.
As the Group reports in GBP but has a high
proportion of revenues in USD, this could
lead to financial losses on conversion of
USD to GBP.
Mitigation
Mitigation
D4t4 is acknowledged as a great place
to work.
Our staff are engaged, motivated and enjoy
working with market leading software, and
having responsibility they might not get in
larger companies. We have also enlarged
our benefits package during the year and
will continue to do so to ensure we remain
competitive on remuneration.
The Group has taken steps during the year
to mitigate risk. A new tighter Treasury
policy was adopted by the Board. There is
a monthly meeting to review and discuss
cashflows, which covers foreign exchange
exposure, as well as cash holdings,
deposits, funding of subsidiaries, and trade
debtor aging and bad debt risk.
Links to strategy
A B C D E F
Links to strategy
A B C D E F
Links to strategy
A
ARR
D
B
C
Building for scale
Culture
Grow CDP and FDP revenues
Innovate and differentiate
F Diversify revenue streams
E
Learn more about our strategy
on pages 2 to 13
29
D4t4 Solutions plc Annual Report and Accounts 2022 Stakeholder engagement
Connecting with our
key stakeholders
The Board considers the interests of its key stakeholders when making decisions. This
ensures that the Directors are fulfilling their duties under Section 172 (s.172) of the
Companies Act 2006, to ensure the long-term success of the Company.
These duties are summarised as follows;
A Director of a Company must act in a way they consider, in good faith,
These pages outline the priorities of customers, partners, employees
would be most likely to promote the success of the company for the
and shareholders, and how the Board engages with these groups.
benefit of its shareholders as a whole and, in doing so, have regard
Further information is available in the rest of this Strategic Report on
(amongst other matters) to:
• The likely consequences of any decisions in the long-term
• The interests of the Group’s employees
• The need to foster the Group’s business relationships with
suppliers, customers and others
• The impact of the Group’s operations on the community
and environment
• The desirability of the Group to maintain a reputation for
high standards of business conduct; and
• The need to act fairly as between shareholders of the Company.
pages 2 to 29 and Corporate Governance Report on pages 52 to 82.
Throughout the year, the Group Operations Board updated the Board
with information on important areas of business focus, and in particular
those relating to our key stakeholders as well as environmental, social
and governance (ESG) matters. This ensured that the Board had a
good understanding of the priorities of each stakeholder group to aid
decision making. More information on the Group’s ESG activities can
be found in the ESG report on pages 38 to 49. Topics considered by the
Board during the year are shown in the table on page 55.
From a stakeholder perspective the key considerations for the board
during the year were;
Stakeholder group
Consideration and action
The Group consulted widely with customers and partners on future development of our products. This assists
the board in ensuring that our products continue to meet customers’ ever growing needs to support their
stakeholders, whether end-customers, employees or shareholders. This consultation resulted in new features
in the CDP and FDP products as well as an enhanced customer and partner portal.
We consulted widely with employees on an ongoing basis about a post-Covid-19 hybrid working policy
to ensure that employees were able to maintain a balance between work and home life. For our ESG
programme, we also consulted them on their preferences for local charitable initiatives, and their choices for
our UN SDG objectives.
We have ongoing feedback from shareholders on the balance between financial investment for growth and
the healthy cash balance held by the Group. These considerations have led the board to continue strong
investment into growth, including an acquisition during the year, and investment into core systems, whilst
also being able to announce a 3.9% increase in the dividend and a special dividend.
Following other feedback from shareholders, the board decided to strengthen its focus on governance by
reshaping the board composition and adopting new Matters Reserved for the Board and Terms of Reference
for its committees.
Customers and Partners
Employees
Shareholders
30
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT
Mark Krebs
VP, Global Sales
For new business,
we are actively
simplifying our
approach to Sales
and putting the
automation in place
to build for scale in
partnership with
Marketing. For
existing customers,
our focus is on
listening to customer
needs and pain points
to build a value-based
story to drive growth
in our key accounts.
Customers
What is important to them
• Reliable technology that adds
value to their business
• Ongoing product development to
meet their future needs
• Customer satisfaction with our
products and support service
How we engage
• Good relationships as a
trusted supplier
• Integrations with key
technology
• Input into the future features of
the products
Customer Advisory Board (CAB)
Creation of a CAB with a global remit to ensure
Service reviews
Internal service reviews are conducted daily
proper flow of information from our key
based upon client communication and support
customers to our engineering teams. This is
requests, which are managed on a 24/7 basis for
also used to vet and adjust upcoming product
most customers. Regular service reviews with
roadmaps to ensure we are solving for the key
customers are held to ensure we continue to
issues in the marketplace, and also provides a
add value across our customer base.
sounding board for our CTO and Product Teams
as they evaluate various research projects and
roadmap items.
Customer and partner portal
Our Customer and Partner Portal has the goal of
streamlining communication, providing better
support, and offering a variety of self-service
options to customers and partners. This also
ensures we are able to communicate openly
and effectively, while also providing a central
location for all the latest information about
our products and services. Further plans are
Key resources
We make investments in key resources around
the globe to continue to support our growth
and existing customers.
Marketing and messaging
A primary focus of ours as part of our “go loud”
campaign is to provide our customers and
prospects with a better understanding of our
product, core use cases, and differentiators.
This will also further enhance our partner
engagement and onboarding as well as our
in place to enhance the portal and continue
direct sales initiatives.
to make this a key relationship driver for our
existing customers and partners.
Customer success meetings
Our Account Management teams regularly hold
Customer Success meetings with our existing
Case studies
Inclusion of key customer case studies as part of
our PR campaign to raise awareness of the value
of the Celebrus family of products. We have also
introduced PR bylines to exhibit expertise in our
customers and build strategic plans for existing
relevant fields for our key stakeholders.
customers that are reviewed quarterly. We also
ensure that all customers are communicated
with during the product updates that we
generally release twice annually.
31
D4t4 Solutions plc Annual Report and Accounts 2022 Stakeholder engagement continued
Partners
What is important to them
• Good sales and marketing support and
information regarding our products
• Understanding of our products and product
development pipeline
• Continued onboarding of front-line teams
and strategic account mapping
How we engage
• Strong relationships between our
sales teams and partners’ sales teams,
in order to work effectively with
mutual customers
Simon Burton
VP, Alliances
Alliances have always
relationships with partners, which are crucial to
to our success. As we continue to innovate our
Trusted partnerships
The Board is committed to building trusted
Partner portal
Partner onboarding and engagement is crucial
delivering many of our customer commitments
product, the Partner portal has better enabled
and growing the business. These partnerships
and engaged our partners around the globe
will continue to be expanded in the coming
for the Celebrus family of products. We will
year to ensure that our platform is getting the
continue to drive adoption of this as a core
recognition it deserves in the marketplace,
communication channel.
and we will continue to innovate our partner
messaging to drive more engagement from
the channel.
Engagement and communication
Our Global Partner team fosters a strong
relationship between our partners and our
field sales and account management teams.
The strategy is set annually, revisited quarterly,
and discussed weekly around the globe.
been important
for our business
and we continue
to innovate with
them in the market.
We are focused
on expanding our
existing partnerships,
building new
partnerships for both
the CDP and FDP, and
building out a new set
of consulting partners
to build for scale.
32
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Employees
What is important to them
• Feeling engaged with the business and its
overall purpose, especially during lockdown
and hybrid working, and understanding
their roles within the organisation clearly
Vicky Baker
Head of HR, People and Culture
How we engage
• Feeling valued, trusted and empowered
• Wellbeing and work-life balance
• Being fairly rewarded and incentivised for
their contribution
Making the business
scalable is a key
objective, and so the
HR team is engaging
with employees to
drive empowerment
and job satisfaction.
Employees tell us
D4t4 is a good place
to work and we’re
striving to make it
great!
Employee briefings
Bi-monthly Town Hall meetings are held
ESG
During the year we set up an ESG committee
enable colleagues to engage with the board
and sub-teams. This has proven to be very
and leadership team to ask questions, raise
valuable allowing employees to influence
issues and to be provided with updates on the
the Group’s and each location’s ESG activities
business. During the year, each non-executive
specially in relation to the Social aspects.
director gave a brief presentation of their role
and answered questions from employees.
Performance updates
Key performance information such as trading
Improved communication
During lockdown and more recently during
updates and financial results are always
promptly communicated to employees.
hybrid working we have effectively used
systems such as Microsoft Teams to not only
increase verbal communication but short
messaging reducing the number of emails.
Share schemes
The Group has in place Share Option Plans
to enable employees to become personally
These systems have also allowed us to share
invested as shareholders of the Group.
documents and build accessible repositories of
information, thereby improving efficiency.
33
D4t4 Solutions plc Annual Report and Accounts 2022 STRATEGIC REPORT
Stakeholder engagement continued
Shareholders
What is important to them
• Shareholder value
• Timely, clear and relevant communication
• Staying up to date with Group strategy and
• Understanding the remuneration policy and
business performance
management incentivisation
Ash Mehta
Chief Financial Officer
How we engage
Annual General Meeting (“AGM”)
The AGM is a key opportunity for engagement
Group website
Presentations and announcements and other
between the Board and shareholders.
key shareholder information is available on
the investor section of the Group’s website.
Analysts and investor meetings
The Executive directors hold broker, analyst
The investor section of the website has
recently been updated making it more
and investor roadshows meetings throughout
engaging and informative.
the year, particularly following the release of
the Group’s interim and full year results and
feedback from those meetings is shared with
the Board.
Annual Report and Accounts
The Group’s Annual Report and Accounts is
made available to all shareholders both online
and in hard copy where requested.
Capital Markets Day
This is an opportunity for investors to meet with
management and for management to go into
more detail about aspects of the business. An
event was held in December 2021 and the video
recording is available on the Group website.
We value our
engagement with
shareholders and so
we are increasing the
volume and quality of
our communication
by using investor
meeting tools, social
media as well as our
new investor website.
34
D4t4 Solutions plc Annual Report and Accounts 2022 What our partners
say about us...
“Celebrus' commitment to
development and investment in graph
technology, advanced machine learning and
extensive API capabilities underpins its ability to
operate at scale as part of a sophisticated customer
engagement, personalisation and decisioning
ecosystem of technologies. These combine with our
leading-edge business thinking and practice to
secure the huge value improvements
available. The partnership between Optima
Partners and Celebrus will go from
strength to strength."
Alan Crawley, CEO,
Optima Partners
“Our partnership with D4T4
is one of the strongest in our portfolio –
together Teradata and Celebrus have forged
a relationship to target the largest enterprises
in the world with a robust and powerful
enterprise offering.
The value delivered from this partnership
to our joint customers can be measured in
the billions of dollars across the very largest
enterprises in retail, financial services, telcos,
transportation and healthcare.”
Yasmeen Ahmad, SVP, WW Industry,
Teradata
“With EY as lead advisory
partner and D4t4/Celebrus as the
behavioural biometrics and analytics
technology vendor, we believe this approach
can disrupt existing fraud solutions that fail to
deliver effective and efficient outcomes, and
significantly enhance Financial Institutions’
capabilities to prevent scam fraud.”
Patrick Craig,
FSO UK Consulting Partner, EY
“In addition to better
insights in marketing spend and
the customer journey, our customers have
achieved substantial gain in conversion
and revenue/margin improvement due to
advanced personalisation. Celebrus’
unique tag-free collection mechanism
is the foundation for a unique
set of business applications.”
Gerard Brinkman, CEO,
Onmarc NL
“Accuracy and transparency
at scale in our view is only achievable
with true first-party solutions like Celebrus
that have a long and impressive history of
solving large, complex digital data problems.
Celebrus provides rich intent analysis from inside
Celebrus' internal analytics capabilities and
a constant stream of site analytics from which we can
build predictive, feature rich data models to better
deliver personalised experiences at
scale for our clients."
Nicholas Gent, CEO,
Future Proof AI
35
D4t4 Solutions plc Annual Report and Accounts 2022
STRATEGIC REPORT
Our people
A challenging environment
that feels like home
What have been your biggest accomplishments at D4t4?
We support one of the largest analytic environments at one of
the top tier financial institutions in North America. Our team has
taken the lead on the design and support of this environment,
I’m very proud of what we have built so far, and of the things to
come in the near future.
What aspirations do you have to develop further at D4t4?
New technologies excite me. We continue to update and
augment our customers environments with cloud and other
related technologies, to improve their value to our customers.
There is no shortage of things to learn and skills to develop.
What would you say to people who might be thinking about
wanting to work in data technology and at D4t4?
In larger companies you don’t always feel you make an impact.
Smaller companies are a great place to learn all aspects of the
business. It also gives you a great sense of pride to be close
to the life blood of the organisation. Also, it’s nice to like the
people you work with!!!
Tell us something most people don’t know about you?
I have a 65 Gallon Saltwater fish tank (I love to scuba dive).
Tom Keefer
Senior Architect & pre-sales engineering, Cary, NC, USA
Joined D4t4 2018
What was your degree or initial qualification?
B.S. Computer Science
How did you get into data and tech?
Started my Career at NASA Langley Research as Unix
System Administrator
What attracted you to D4t4?
I was impressed with the knowledge and leadership of the
management. After working with them and their teams
while I was at a large bank, I wanted to work more closely
with them and their teams.
For more on our people see pages 11, 45 and 49
36
D4t4 Solutions plc Annual Report and Accounts 2022 Kumar Duvvuri
R & D Manager, Andhra Pradesh, India
Joined D4t4 2007
What was your degree or initial qualification?
Bachelor of Technology (Civil)
How did you get into data and tech?
I was always fascinated with Software development, and
started off by learning Unix, C, Oracle, and Java.
What attracted you to D4t4?
A D4t4 employee introduced me to the company in 2007.
For me, it was basically the technology and the projects
that interested me.
Thangam Natarajan
Professional Services Consultant, Chennai, India
Joined D4t4 2015
What was your degree or initial qualification?
Master Of Computer Applications
How did you get into data and tech?
While studying for my masters I had developed an interest in
data analytics and visualisation. It was so fascinating to see
how people bring insights & statistics from the raw data. That
made me hooked into data-science and related technologies.
What do you like about working at D4t4?
D4t4 has a friendly ecosystem with cultural diversity and most
welcoming place to work. I like the fact that D4t4 believes in
developing talent.
What have been your biggest accomplishments at D4t4?
Development and delivering the Celebrus Dashboard. This
work was especially fascinating due to the fact we started the
project from scratch using the latest technical building blocks.
How have you grown professionally while working at D4t4?
I have had the opportunity to work with various technologies
and applications at D4t4. I joined as a Senior developer and
moved on to become Tech Lead and Manager.
What would you say to people who might be thinking
about wanting to work in data and tech and at D4t4?
D4t4 is more jeans and tee-shirts, than suits and ties. We are
smart on the inside! People with the right skills are always
encouraged and supported.
Tell us something most people don’t know about you?
I am believer and practitioner of natural remedies.
What attracted you to D4t4?
My real passion is data and I also enjoy solving issues using
an analytical approach. I believe that my passion and skills
match the D4t4's drive and capabilities.
What do you like about working at D4t4?
The work culture is good across all the locations of D4t4.
Friendlier employees and the work-life balance here is
what attracted me the most, along with the opportunities it
provides to get exposed to multiple trending technologies.
How have you grown professionally while working at D4t4?
I joined D4t4 as a junior product support professional and
became a Technical leader of my team within 3 years.
Tell us something most people don’t know about you?
In spite of the appreciation for my quick turnaround at work,
I am an extremely slow person when it comes to cooking
and cleaning at home. Sometimes, I have my sparks of
inspiration for work things, while spending endless hours of
time in the kitchen.
37
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report
Conducting business to the
highest ethical standards
D4t4 conducts its business activities to the highest ethical standards
and expects clients and suppliers to embrace these same principles.
This report outlines how we conduct our activities and should be read
in conjunction with other sections of the Annual Report, notably the
Corporate Governance section.
Introduction and Overview
How we incorporate ESG into what we do
In last year’s report, we announced the formalisation of our ESG
Impact of the global pandemic
The coronavirus pandemic has had a dramatic impact on
efforts. At that time, as well as the involvement of an Executive
people’s lives and has caused us to consider more urgently
and a Non-Executive director we also had the engagement of nine
what we can do to support our employees and
colleagues from across our four locations. This initiative has clearly
our communities.
It has also highlighted, more than ever, the need for
businesses to operate in a socially responsible and
environmentally sustainable way and to look after their
staff by providing a safe operating environment, whether
in the office, while travelling, or working from home.
caught the imagination of our employees as we have had as many
as twenty colleagues involved in committee and sub-committee
meetings and many more engaging in our initiatives.
Therefore, on behalf of the board and all the employees who have
contributed and engaged with this initiative, we’re delighted to
present D4t4’s first ESG Report. The first section describes our
Environmental impact with data on our carbon usage and our
initiatives to reduce our impact on the environment.
The second section focusses on the social impact we have been able
to have on our communities but also on our employees and their
safety and wellbeing.
The third section discusses our approach and initiatives to being
a good corporate, and ensuring we treat all our stakeholders fairly,
including policies covering matters such as tax fairness, bribery
and whistleblowing.
38
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Environmental
D4t4 cares about the environment and fully supports,
and is committed to, the principles of promoting good
environmental practice and sustainability in the conduct of
its activities. The Group wants to ensure that any adverse
effects on the environment are kept to a minimum.
tCO2 comsumption
Scope 1 (2.4%)
Scope 2 (23.8%)
Scope 3 (73.8%)
It aims to do this by:
• wholly supporting the requirements of accepted international
standards and current EU environmental legislation and codes
of practice.
• minimising consumption through the reduction, reuse, or
recycling of materials as much as possible.
• encouraging efficient use of energy, utilities, and
natural resources.
• continually striving to improve environmental performance.
• communicating its environmental commitment to clients and
suppliers and encouraging their support.
Carbon Audit 2021
For the first time ever, D4t4 appointed an external consultant, Alectro
LLP, to perform a carbon audit for the calendar year 2021. Whilst there
are no comparisons with previous years, this report sets out a baseline
of understanding about the Group’s carbon impact and makes
recommendations for reducing our carbon impact.
During the year, the Group’s activities including our facilities, operations
and transport generated 334 tonnes of CO2 with Facilities and
Transport each accounting for 129t and Operations accounting for 76t.
These figures include Scope 1,2 and 3 emissions as defined under the
Greenhouse Gas (GHG) Protocol, and the breakdown is shown below;
Category
tCO2e
tCO2e per employee
% of total
Scope 1
Scope 2
Scope 3
Total
8.16
79.49
246.82
334.47
0.06
0.54
1.69
2.4%
23.8%
73.8%
Of the Facilities figure of 129t, an amount of 79t was due to purchased
electricity for the India offices. Whilst we have taken steps to move to
green electricity tariffs in our US and UK offices which produce no CO2,
this is more difficult to do in India where in the Chennai area 76% of
electricity is coal, diesel or gas, with 24% being nuclear, hydro or other
renewables, and no purely green tariffs are available.
On a positive note, over the last few years we have been working on
reducing our consumption of natural gas and this year, for the first
time, we brought it down to zero.
Due to the disruption of the pandemic, the report considered the
excess energy use caused by employees working from home. This
increases the emissions from facilities for two reasons:
• Not all employees use low-carbon/renewable electricity.
• Employees use natural gas for heating their home, and home
setups tend to be less optimized for working and cost-saving.
The additional working-from-home emissions are still comparatively
lower than the alternative of having all staff commute to the office five
days a week.
39
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report continued
Purchased
Electricity
79.49
FACILITIES
WFH
heating
23.46
WFH
electricity
12.47
Purchased
Goods
56.30
OPERATIONS
Employee
Commute
58.43
TRANSPORT
Business Travel
64.64
Emissions summary
Total emissions
334 tCO2e
Emissions per employee
2.29 tCO2e
Transport
129 tCO2e
38.64% of total
Facilities
334 tCO2e
38.48% of total
Operations
76 tCO2e
22.87% of total
Reproduced from a report produced by Alectro LLP
The Transport emissions of 129t were generated by business travel
Of the Operations figure of 76t, the largest component was Purchased
(64.6t) and employee commute (58.4t). Flying was a large contributor
goods, resulting from physical technology emissions (14% of overall),
as the total impact created by flights was 59.6 tonnes. Due to different
embodied emissions in vehicles and general purchased goods such
national lockdowns in the US, India and UK, working patterns were
as stationery and office items. There also were small amounts of
different in each country. The commute was lower than in a typical
stationery and home office equipment purchased for employees,
year because of these lockdowns, and so it only contributed to
but these are likely to have been one-off purchases made to support
the impact on days where staff came to the office. A proportion of
employees working from home during COVID.
employees did not travel to their respective office at all in 2021, and it
is expected in coming years there could be increased commuting and
higher emissions.
The impact from cloud infrastructure is largely low carbon, based
on the offsetting undertaken by Microsoft Azure, one of our cloud
computing suppliers. However, AWS isn’t as far along as Azure, and so
The impact of the employee commute will be considered in the
still contributes to the overall impact.
coming periods, as new working patterns are introduced in each of the
offices post-pandemic. Additionally, we recognise that flights will likely
be a large contributor to carbon footprint in the coming year, as with
the relaxing of lockdown rules we expect there to be more flights than
in the previous year.
40
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT 2020
177,533
2019
342,783
2018
275,041
3,692
39,673
99,227
Category
Electricity (kWh)
Impact (tCO2)
Gas (kWh)
Impact (tCO2)
Diesel (litres)
Impact (tCO2)
2021
311,472
79.5
0
0
747
2.0
Emissions per employee
Based on 146 full-time employees on average in 2021, the Group’s total impact of 334t results in a value of 2.29t CO2/employee. This is above an
interim target of 1.5t CO2e/employee needed to reach UK domestic targets by 2030. The largest single contributing factor to this high number is
the electricity usage in India, which will be a major area of focus for the Group in the coming year. However, making a significant reduction will be
difficult due to the lack of green energy in the Chennai region.
Waste and recycling
kg
IT recycling
General recycling
Total recycling
General waste
2021
710
563
1,273
1,804
2020
282
624
906
3,158
2019
480
922
1,402
3,664
2018
557
1,521
2,078
963
All our offices have recycling stations to recycle key materials such as glass, plastics, and paper.
UK waste and recycling data
In the UK the Group recycles IT hardware and other waste using a third-party company. The level fluctuates year to year but in 2021 1,077kg of
hardware was recycled ensuring that metals and plastics are not sent to landfill, and 563kg of general waste was recycled. This includes paper,
plastic, and glass. The amount of general waste in the UK was 1,804 kg. Data is not currently available for the US and India offices but will be
sought for future reports.
41
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report continued
Employee insights
As mentioned above, we have been delighted by the level of employee engagement in our ESG initiative. This engagement is based on the
shared beliefs amongst employees as evidence by an Environmental survey undertaken during the year, the results of which are shown in the
chart below.
Summary
1
2
3
4
5
Our climate is changing
2%
1%
5%
31%
61%
Humans have had an appreciable
contribution to climate change
2%
2%
13%
28%
55%
I’m confident in quantifying carbon
emissions resulting from my lifestyle
choices and actions
5%
15%
35%
29%
15%
Climate change is an important issue
in my life
5%
4%
25%
40%
26%
It is important for me to be working
for an organisation that takes
responsibility for its actions relating
to climate change
2%
4%
20%
37%
37%
Opinion categories: 1 = Strongly disagree, 2 = Disagree, 3 = Neutral, 4 = Agree, 5 =- Strongly agree
92%
of employees agree that
the climate is changing
44%
of employees agree that
they were confident
quantifying emissions
resulting from lifestyle
choices and actions
74%
of employees agree
that it’s important to be
working for a company
that takes responsibility
for its actions relating to
climate change
We were pleased with the suggestions received from employees for how we can reduce our carbon impact, and we will be considering these during
the current year. The suggestions included matters such as;
• A formalised Work From Home (“WFH”) policy to counter carbon emissions relating to daily commuting
• An electric car scheme and the installation of more electric chargers in
our UK office car park.
• Automatic lighting to be extended across the whole of the group offices.
• Workshops on how employees can reduce carbon emissions at home
as well as in the office.
42
We care about
the environment, fully
support and are committed
to, the principles of
promoting good
environmental practice
and sustainability
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT UN Sustainable Development Goals
As part of our ESG initiative, D4t4 will look to support the United
Future progress
The baseline created by the carbon audit provides useful pointers
Nations Sustainable Development Goals through carbon emission
for actions we can take in the coming year to manage our carbon
offsets. These are a blueprint to achieve a better and more sustainable
footprint. Some of the challenges we will face will be a likely increase
in travel and a lack of influence over the energy sources for our
Chennai office. However, we will continue to investigate our energy
efficiency and consumption, on matters such as:
• Employee education and supporting individual responsibility
• Office efficiencies eg. automatic sensor lighting
• Ongoing review of office supplies and consumables
Business travel will inevitably increase as our customers value face-
to-face engagement with our project and delivery teams. However,
we will test more rigorously the need to travel, especially by air,
and we will encourage the use of public transport whenever it is a
suitable mode of transport and consider hiring personnel closer to key
customer locations to reduce transcontinental flights.
We will aim to launch an electric car scheme and install more electric
car chargers in our offices where practical. In the UK, electric car lease
schemes are very attractive due to the use of salary sacrifice schemes
and the low tax rate on the car benefit.
future for all.
We asked employees to vote for their top three goals for guidance on
which projects to support. The top goals were SDG13 (Climate Action),
SDG3 (Good Health and Well-Being), SDG2 (Zero Hunger) and SDG4
(Quality Education). We will consider offset projects to best reflect
these choices.
2 Zero Hunger
End hunger, achieve food security
and improved nutrition and promote
sustainable agriculture.
3 Good Health and Well-Being
Ensure healthy lives and promote
well-being for all at all ages.
4 Quality Education
Ensure inclusive and equitable
quality education and promote
lifelong learning opportunities for all.
13 Climate Action
Take urgent action to combat climate
change and its impacts.
43
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report continued
Social
Our employees
As a technology business, the Group’s success is built on the intellectual
Inevitably, such changes take time to permeate through the
capital of our people, and the pride they feel in working for the Group.
organisation to change ways of working, but we have already
The aim of the leadership team and the HR function is to enable,
seen some very positive outcomes from improved employee
empower and strengthen this drive through the creation of a positive
communication and employee engagement.
working culture in which employees feel engaged and motivated.
Coronavirus
This has been assisted by the recent implementation of an HR portal
enabling employees to improve communication and relationships
amongst themselves, as well as manage their own personal
The most important employee aspect in the Group over the last two
development plans whilst being supported by their line managers.
years has been our response to COVID with a view to protecting our
employees and their families. Our leadership team and staff across
the world displayed outstanding commitment to the business and
the way they responded to the challenges of the pandemic. During
the closure of our offices at short notice, our staff have been able to
work from home with little interruption and have maintained the
highest levels of customer service. Whilst we are a technology driven
company, we are also a people led business and innovation is driven
from personal interaction across the firm and with customers, so
we look forward to returning to a more hybrid working model. We
envisage this as a combination of home and office working, whilst
Diversity of employee base, equal opportunities, inclusion
and treating people fairly
With employees in four countries and coming from many
different backgrounds, D4t4 is proud to have a diverse workforce.
Nevertheless, we recognise that more can always be done, and we
accept the need to ensure that the management team becomes
more diverse. During the year we have added more women into key
roles such as VP-Marketing, Head of Public Relations, and Head of
HR, People and Culture.
optimising opportunities for creative interaction, communication, and
We treat individuals openly and fairly with dignity and respect, and
efficient working.
we value their contribution towards providing a quality service to
our customers.
Resetting culture and values, and Appointment of Head of
HR, People and Culture
To support our ambitious growth plans and following a review of
Employee nationalities
company culture and values, the new CEO and CFO decided to
expand the HR role identifying a need for the culture to focus more
on accountability and empowerment, and to create a more vibrant
working environment.
In November 2021 we decided to expand the HR role and appointed
our first Head of HR, People and Culture, Vicky Baker. Vicky has a
British
Indian
American
Hungarian
Irish
Polish
strong background in technology companies and is putting in place
Portuguese
effective organisational structures and cultural change to facilitate
improved operational performance. She is engaging with all of our
employees to evolve our culture to one of individual empowerment,
openness and communication across all divisions and locations.
Romanian
Swedish
Australian
Czech
2%
2%
2%
1%
1%
1%
1%
1%
44%
32%
13%
44
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT
Our focus on diversity and inclusion extends to treating all our
employees and job applicants fairly and equally. It is our policy not to
discriminate based on gender or gender identity, sexual orientation,
marital or civil partner status, gender reassignment, race, religion or
belief, colour, nationality, ethnic or national origin, disability or age,
pregnancy, or trade union membership or the fact that they are a
part-time worker or a fixed-term employee. The equal opportunities
policy operated by the Group ensures all workers have a duty to act in
accordance with this.
As part of our investment into a new HR portal, we will be in a
stronger position to review HR analytics to be able to provide detailed
information regarding this in future ESG reports.
OUR PEOPLE
Esther Craddock-Taylor
Data Analytics Project Manager, London, UK
Joined D4t4 2020
What was your degree or initial qualification?
Sociology & Philosophy, University of Exeter (if only data
analytics was an option for a degree back then!).
How did you get into data and tech?
I got into this space when working at Nielsen (a global data
and measurement company) executing discrete choice
modelling, to analyse vast sets of market data to advise
leading CPG clients on how to optimise their Marketing,
Advertising, CRM, GoToMarket and Pricing & Promotion
strategies. I learnt early on in my career how much I love
working with the wonderful world of data and tech and I
would never want to divert away from this in my career.
What attracted you to D4t4?
The broad range of clients and industry leading software, as
well as the international presence working across a variety of
different teams. I also liked that I could work specifically within
the data analytics team as that is where my expertise lies.
What do you like about working at D4t4?
The people - I have a great team who are always supportive
and we have a great collaborative, non- hierarchical way of
working which encourages everyone to thrive. I really am not
just saying that - a day in the life at d4t4 is a great place to be!
I am a member of Richmond kayaking club and tennis club
and I also have a paddleboard which I use regularly, even in
the winter!!!
Tell us something most people don’t know about you?
I am studying for a degree in interior design for fun!
D4t4 Solutions plc Annual Report and Accounts 2022
45
45
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report continued
Employee Reward and Recognition
Health and Safety
The company recognises the need to reward and recognise our
It is our policy that all of the Group’s facilities, products and services
employees for their contribution to the Group’s success as well as
comply with applicable laws and regulations governing safety and
supporting their overall wellbeing. We provide an attractive range of
quality, so that we can maintain a safe working environment for our
benefits tailored to each location.
employees, customers, partners, and visitors.
In both the UK and the US, we offer a company pension contribution
During the year there were no major injuries reported under the
higher than the statutory minimum, and during the year we improved
Reporting of Injuries, Diseases, and Dangerous Occurrence Regulations.
our pension plan in the US, moving to a provider with lower costs for
employees whilst retaining a good range of investment choices.
Employee engagement
We also offer a company-funded healthcare scheme and in the UK we
Employee engagement is a critical feature to any successful business.
upgraded the scheme to include mental health, better cancer cover
During the past two years of substantial lockdown, it has been even
and 24/7 online access to a GP.
We also offer a comprehensive Employee Assistance Program to assist
employees with issues of any kind, including problems at home,
issues with work, housing concerns, legal problems etc. There is also
support for face-to-face counselling in complex cases, as well as online
live-chat counselling.
The group has an employee share option scheme to motivate and
retain key staff and allow them to share in the success of the Group.
Non-financial benefits include the ability to work on a hybrid basis
and on a flexible basis if required, allowing employees to work from
home on a regular basis to cater, for example, for family obligations
etc. This is a core component of building a culture of accountability
and empowerment throughout the organization with clear goals and
expectations for every role.
Employee development
In a technology business which prides itself on market-leading
technologies, it is essential that our employees stay up to date with
technical developments and we support them in doing that through
targeted training and on-the-job support. We are supplementing
more important. The principal tool of engagement has been our
quarterly Town Hall meetings at which all employees across four
time zones are invited to join a company update and hear from
management, meet new employees, and hear about business
progress and initiatives. Due to their success, we have now increased
their frequency to bi-monthly and have got considerably more
engagement from the team. We have also held “drop-in” meetings
under the Brew Monday initiative by the Samaritans in UK, and similar
get togethers during Mental Health Awareness Week.
Over this period, we have strongly encouraged staff to use Microsoft
Teams for internal communication, for video calls but also for
messaging and team discussions, enabling better relationship building
between colleagues, and reducing the stress of overflowing email
inboxes. We have also invested in conferencing tools and systems to
better connect our offices and remote employees around the globe.
We are increasing our engagement by commencing regular employee
surveys to identify areas for improvement across the various locations
and for granularity into different departments across the business.
Communities
this currently with greater business and line manager training. This
Charitable initiatives
is positive for employee development and satisfaction, but also
important for the Group as it continues to build the “infrastructure”
for scalable growth. We expect to add an e-learning platform to our
employee development tools in the coming year.
As part of our ESG initiatives, we undertook an employee survey around
community engagement and philanthropic causes. This showed that
employees were very keen on supporting local causes and initiatives,
and have collective participation in fundraising and volunteering, with
hands-on face-to-face interaction rather than behind the scenes.
46
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT Lands End to John O’Groats cycle ride
In November 2021, a team of UK employees cycled on Gym bikes or through local
neighbourhoods to raise funds in aid of Woking Hospice, a patient-led charity
providing palliative care and end of life care to people who have advanced life-limiting
illnesses. One of our colleagues spent time at this hospice before he passed away in
early 2021.
The original target was to cover the 1,748 miles distance from John O’Groats to Land’s
End and back again by Christmas.
The results were outstanding, with the team not only passing the target but then going
on to complete an amazing distance of 3,333 miles. That’s just short of cycling by road
from London to Cairo via Istanbul! This raised £1,637 for the hospice, in
memory of our colleague.
johno’groats
D4t4 TAKE ON A VIRTUAL
LANDS END
TO
JOHN 0’GROATS
and back again...
SPONSORED CYCLE
by 21st december
In memory of our dear friend and colleague
Russell Tewkesbury, the team are tackling a virtual
journey of over 1,700 miles to support the
Woking and Sam Beare Hospice
To sponsor the D4t4 team or to find out more
information please visit
https://www.justgiving.com/fundraising/d4t4Charityride
S
D
D
N
N
E
A
L
3,333
miles cycled
£1,637
raised for charity
Polio vaccination
UK food bank collection
A team from our Indian office collaborated with The Rotary
The recent increase in the cost of living and energy around the
Foundation in Chennai, India which gave us the opportunity
world prompted our UK Team to coordinate a collection for
to contribute towards administering polio vaccine to 3,347
a UK food bank run by the Trussell Trust. The company and
children across 14 booths. We called it “2 Dollars 2 Drops”
employees made financial donations and donations of daily
because it costs about 2 USD (150 INR or 1.50 GBP) to vaccinate
essential food and household products to the food bank for
a child. Thanks to our employees, we were able to collect
onward distribution to people squeezed by price rises. The total
10,250 INR for this cause and vaccinate 68 children.
sum raised was approx. £600.
10,250INR
collected for cause
68
children vaccinated
D4t4 have joined forces with the Rotary Club of Chennai
Titans to raise vital funds for the eradication of polio
As little as $2* can save a child from polio
2 Drops
Polio Stops.
£600
worth of daily
essential foods and
financial donations
Developments
This was a good start in the first year of our ESG initiative. The Group is in the process of
considering further initiatives including time-off for pro-bono and voluntary work. Each office
now has plans to complete a number of direct fundraising and volunteering initiatives across
the year including setting up an apprentice scheme, and community outreach to schools and
colleges to promote data analytics as a career option to young adults.
47
D4t4 Solutions plc Annual Report and Accounts 2022 ESG report continued
Governance
Corporate governance is described in detail on pages 50 to 83. The
Employee Code of conduct
section below outlines other aspects of governance and best practice
D4t4 has a Code of Conduct policy covering all internal and external
within the Group.
Tax fairness and COVID support schemes
D4t4 is committed to being a responsible taxpayer, acting in a fair
interactions by our employees covering work activities but also
activities in their private lives which might fall below the standards we
expect of our employees.
and legal manner at all times. During the year we implemented the
Bribery and corruption
final stage of our intragroup trading agreements ensuring that costs
D4t4 has an anti-bribery and corruption policy designed to ensure that
are passed into the tax jurisdiction to which they relate and out of
we conduct our business in an honest and ethical manner. We have
jurisdictions where there were originally incurred, typically in the UK
identified our principal risks as being corporate hospitality and gifts,
but for the benefit of our overseas operations. These agreements are
facilitation payments and operations in India. The policy covers all
made available to tax authorities as requested to support recharging
members of staff worldwide, and training is provided to all employees
between group companies and demonstrate that recharges are fair,
on an annual basis.
legitimate and reflect the commercial substance of the activities to
which they relate.
Modern slavery
In FY22, our total tax contribution was £4.7m (FY21: £4.3m). Taxes borne
D4t4 is committed to acting ethically and with integrity in all our
by the Group totalled £0.9m (FY21: £0.9m) and consist of corporation
business dealings and relationships, and ensuring that modern slavery
tax, employer’s NICs and stamp duty. Taxes collected by the Group
is not taking place anywhere in our own business or, as far as possible,
totalled £3.8m (FY21: 3.4m) and consist of PAYE deductions, employees’
in any companies in our supply chain. Our Modern Slavery Statement
NICs and net VAT collected.
Over the last two years of COVID-19, the Board has decided to not claim
is available on our website. We have a zero-tolerance approach to
modern slavery and expect the same high standards from all our
contractors and suppliers. All counterparties are notified of this policy
any COVID-19 grants, loans or furlough payments. This decision was
made on the basis that the business was not materially impacted by
on a regular basis.
the pandemic and whilst claims could have been made under various
scheme criteria this was not felt to be appropriate from the viewpoint of
Whistleblowing
business ethics.
Good Corporate Conduct
D4t4 has policies in place to help ensure that the company is a good
corporate citizen, in its own right and through the actions of its
employees. These policies are reviewed regularly and the next review
will be a comprehensive one to ensure consistency across our offices
and ensuring we are in line with current best practice. The key policies
are outlined below;
At D4t4, we are actively developing a more transparent and open
culture, which encourages our employees to speak up whenever they
have concerns about or encounter poor practice or wrongdoing in
our business. Our whistleblowing policy is vital to ensure we maintain
high ethical standards in our organisation and operations. We have an
internal anonymous reporting facility for employees to raise concerns
which are directed to the Group Company Secretary, who is not an
employee, to raise with the board.
Corporate governance is described in detail on pages 50 to 83
48
D4t4 Solutions plc Annual Report and Accounts 2022STRATEGIC REPORT OUR PEOPLE
Supplier code of conduct
Our Supplier Code of Conduct outlines what we expect of suppliers
and includes reference to our other policies such as those on Modern
Slavery and Fraud.
James Deadman
Account Executive, London, UK
Joined D4t4 2021
Data security
Data security is core to our business, with our multinational customers
How did you get into data and tech?
Initially through eLearning and then secure comms for
entrusting us with access to their data and information systems.
supporting IP based live broadcasting and situational
We handle this through a range of initiatives and we have recently
invested further into this critical function by the appointment of a
Chief Security Office. This is detailed in the Data security section on
pages 10 to 11.
awareness for first responders.
What attracted you to D4t4?
A friend’s recommendation, telling me that Celebrus was head
and shoulders above the rest of the market.
Executive remuneration
The board considers ESG to be an important part of its oversight and
activities and seeks to ensure that ESG is a consideration across the
whole business. Therefore, this year for the first time the remuneration
of the executive directors has a proportion related to the ESG
objectives. In the current year this relates to an element of their
What do you like about working at D4t4?
The team-work, depth of skill/knowledge and can do
attitude, and a collaborative approach.
The strength of the relationships with our partners and end
customers, we and Celebrus really add value and underpin all
variable remuneration being linked to the set-up and updating of our
other martech investments.
ESG infrastructure.
Future ESG developments
This first ESG report demonstrates the status and development of
ESG activities across the D4t4 business. Based on benchmarking
discussions with advisers and consultants we believe we are in a
strong position relative to our peer group of smaller quoted public
companies. Our efforts will continue and this coming year we expect
to make good progress across a number of areas. We look forward to
reporting on that progress periodically in results announcements and
on an ongoing basis through the ESG section of our website.
Ash Mehta
Chief Financial Officer
Monika Biddulph
Non-executive Director
Could you describe your typical day at D4t4?
Lots of partner and customer engagements, some of which
are beginning to be face to face which really helps with
building strong relationships.
What do you like to do when you’re not working?
Renovating a Grade II listed, Georgian town house.
Tell us something most people don’t know about you?
Had trials for the England rowing squad.
What would you say to people who might be thinking
about wanting to work in data and tech and at D4t4?
Don’t hesitate to join…it’s a great place to be.
What’s your favourite bit of tech or software?
Celebrus obviously...
D4t4 Solutions plc Annual Report and Accounts 2022
49
49
D4t4 Solutions plc Annual Report and Accounts 2022
Board of Directors
The D4t4 Solutions’
Board of Directors
is comprised of a
Non-executive
Chairman,
two Executive
Directors and two
independent Non-
executive Directors
Peter Simmonds
Non-executive chairman
Bill Bruno
Chief Executive Officer
Ash Mehta
Chief Financial Officer
APPOINTED
April 2015
APPOINTED
August 2021
APPOINTED
September 2021
BOARD COMMITTEES
BOARD COMMITTEES
BOARD COMMITTEES
A
N
Re
N
Ri
BIOGRAPHY
BIOGRAPHY
BIOGRAPHY
Peter was CEO of dotDigital
Bill joined D4t4 in 2018 as the VP
Ash is an experienced public
Group plc for eight years and
of North America and became
company finance director
a major contributor to their
CEO in October 2021. He has
having previously served on
success prior to stepping down.
over 19 years of experience in
the boards of a number of AIM
Peter is FCCA qualified and has
the media, data, and analytics
and full-list businesses. He has
45 years business experience in
sectors and has a passion for
also held senior financial roles
FMCG, insurance, banking and
fostering a culture of innovation
in a variety of private growth
software. He is also Chairman
while working with brands to
companies, as well as a number
of Gresham Technologies plc
drive transformational change.
of non-executive director roles.
and was Chairman of Cloudcall
Prior to D4t4, Bill spent many
Ash qualified as a chartered
Group plc until its sale to private
years as CEO (North America)
accountant with KPMG and has
equity in January 2022. Peter is
for an AIM listed company upon
extensive experience in investor
an advocate of high standards
leading his consulting business
relations, strategic finance,
of corporate governance In
through a successful acquisition
managing growth, fundraisings,
public companies and has been
by that company in 2013.
and M&A.
a deputy chair of the Quoted
Company Alliance since 2019.
50
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Board of Directors key
Executive
Non-executive
Board tenure
7-9 years: 1
4-6 years: 1
0-3 years: 3
Committee membership
A
N
Audit committee
Nominations committee
Monika Biddulph
Non-executive Director
Peter Whiting
Non-executive Director
APPOINTED
December 2019
APPOINTED
July 2018
BOARD COMMITTEES
BOARD COMMITTEES
A
N
Re
A
N
Re
BIOGRAPHY
BIOGRAPHY
Monika has a wide range
Over a 30-year career, Peter has
Re
Remunerations committee
of experience in both the
gained extensive financial and
commercial and technical
commercial experience. His core
aspects of an international
skills are centred around the
technology business. In over
financial services and technology
twenty years at ARM, Monika
industries; he has the proven
held various General Manager, IP
ability to quickly understand
licensing and technical roles in
complex technologies and their
the business. Currently Monika
applications and at the same
is also a Non-Executive Director
time successfully developed
on the board of Ilika plc. She
strong interpersonal and
was previously NED at Linaro
management skills which
Limited, and holds a PhD in High
have enabled him to build a
Ri
Risk sub-committee
Chair of committee
Summary of skills
Strategy
Change management
Growth companies
Energy Particle Physics from the
technology-led NED portfolio.
Corporate transactions
ETH Zurich.
He is currently Chair of Kooth plc
and a Non-Executive Director of
FDM Group plc.
Software and technology
Sales and marketing
Finance
HR, legal and insurance
Risk management
D4t4 Solutions plc Annual Report and Accounts 2022
51
51
D4t4 Solutions plc Annual Report and Accounts 2022 GOVERNANCE
Chairman’s introduction to governance
Corporate governance for
the next stage of growth
Dear Shareholder
I am pleased to report on the corporate governance procedures
Exceptions to the application of the QCA Code
The QCA Code requires the Board to have an appropriate balance
undertaken by D4t4 for the financial year 2022, and I’m particularly
between Executive and Non-Executive Directors. At the start of the year
pleased that this year’s report sees an increase in our reporting to
the board contained a majority of executive directors and the board
provide stakeholders with greater visibility into the workings of the
felt this was no longer the appropriate balance. The restructuring
board, its committees and the Group overall.
of the board in June 2021, to create a smaller board focussed on
corporate governance and strategy, means that we now have a
majority of non-executive directors on the board.
The QCA Code also requires the Board to contain the necessary mix
of experience, skills, personal qualities (including gender balance)
and capabilities to deliver the Group’s strategy over the medium to
long term. We believe our restructured board has a strong mix of
experience as evidenced in the table on page 51. In the technology
industry there is a longstanding gender bias which is changing slowly.
For our part, during the year we have appointed women in key roles
such as VP Marketing, Head of Fraud, Finance Director, and Head of
HR, People and Culture.
By order of the Board
Peter Simmonds
Non-executive Chairman
6 July 2022
The role of the board in good governance and
business success
The Board recognises the importance of high standards of corporate
governance for delivering long-term success to the Group and
acknowledges its role in setting the culture, values and ethics of the
Group (as outlined in Principle 8) and communicating these to all the
Group’s stakeholders. This requirement is set out formally on page 30.
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.
AIM Rule 26 requires 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.
The Board believes the Quoted Companies Alliance Corporate
Governance Code 2018 (“QCA Code”) is the most applicable set
of principles for governance considering the size, resource and
current development stage the Company is in. Board discussions are
conducted openly and transparently, which creates an environment
for sustainable and robust debate. In the year, the Board has
constructively and proactively challenged management on Group
strategies, proposals, operating performance and key decisions, as
part of its ongoing work to assess and safeguard the position and
prospects of the Group.
52
D4t4 Solutions plc Annual Report and Accounts 2022 Corporate governance statement
Board operation
The Board’s principal role is to provide effective leadership of the
Group and to establish and align the Group’s purpose, strategy,
values and culture. It is responsible to shareholders for delivering
to deal with those matters in detail and report back to the board
with their considerations and outputs. The Board has three principal
committees: the audit committee, the remuneration committee and
the nomination committee. Their responsibilities are set out in formal
terms of reference for each committee, which are reviewed annually
and are available on the Group’s website at www.d4t4solutions.com/
shareholder value by developing the overall strategy and supporting
investors/corporate-governance.
the development of the direction of the Group. The Board is also
responsible for overseeing the Group’s external financial and other
Audit committee
reporting and for ensuring that appropriate risk management and
internal control systems are implemented and maintained.
During the year we reviewed afresh the Matters Reserved for the Board
as well as the Terms of reference for our three board committees
covering Audit, Nominations and Remuneration.
The committee is responsible for overseeing the Group’s external
financial reporting and associated announcements, considering
risk management, internal controls procedures and the work of the
external and internal auditors. Full details of the work of the committee
are set out in the audit committee report on pages 68-69.
• Strategy and long-term objectives;
• Financial statements, dividend payments and accounting
policies and practices;
• Approval of the Group budget;
• Capital structure;
• Internal controls and risk management;
• Acquisitions and disposals;
• Major capital expenditure;
• Legal (including major contracts), health and safety and
insurance issues;
• Approval of policies adopted by the Group; and
• Board structure and the appointment of advisers.
These matters must come to the board for formal approval. However,
the board delegates certain powers to its committees allowing them
Nominations committee
The nomination committee is responsible for leading the Board
appointments process and for considering the size, structure and
composition of the Board. Full details of the work of the committee
are set out in the nomination committee report on pages 70-71.
Remuneration committee
The main role of the remuneration committee is to set the company’s
remuneration policy, determine each executive director’s total
individual remuneration package and set the targets for performance-
related pay, such as to be able to recruit, retain and motivate
individuals of the highest calibre. The details of the committee’s work
are set out on pages 72 to 73.
The Board meets as often as necessary to discharge its duties and the
number of Board meetings held during the year, together with the
Directors’ attendance records, is set out on page 49. Details on the
number of committee meetings held during the year together with the
Directors’ attendance records can be found on page 63.
53
D4t4 Solutions plc Annual Report and Accounts 2022
Corporate Governance Statement continued
Board meetings are in person at the company’s offices in Sunbury
whenever possible, or alternatively held by video conference.
The Directors have access to the advice and services of the Company
Secretary, James Thorne, who have over xx years’ experience, and
is responsible for ensuring that the Board and its committees’
procedures and applicable rules and regulations are met. The
Directors all have access to the Group’s key advisers. If required in
the performance of their duties, Directors may take independent
The Chair’s responsibilities include:
• chairing the Board, the nomination committee and
shareholder meetings (including the AGM);
• providing leadership of the Board and ensuring the
effectiveness of all aspects of the Board’s role;
• providing challenge to the Executive Directors and
working closely with the Chief Executive Officer on key
professional advice at the Company’s expense.
strategic decisions;
Appropriate insurance cover is in place in respect of legal action
against the Directors. The Group has adopted and maintained a share
dealing code for Directors and employees in accordance with the
Market Abuse Regulations.
• maintaining a dialogue with major shareholders on
governance and other strategic matters, as appropriate;
• setting the Board agenda and ensuring all Directors have
the opportunity to maximise their contribution to the Board
Board and committee papers are circulated approximately one week
by encouraging open and honest debate and constructive
in advance of meetings to enable the Board to review and consider the
challenge of the Executive Directors; and
materials provided.
The Chair ensures that input is sought and obtained from any Director
who is unable to attend a Board meeting and provides a verbal update
following the meeting to complement the minutes. There is ongoing
contact between the Chair, Executive Directors and Non-executive
Directors between Board meetings.
A Board calendar is prepared on an annual basis, and Operations
Board members and other staff are regularly invited to attend to
present an update on their areas of the business. This is highly
valuable in providing further detail to support strategic decisions. In
addition, the Board meets on an ad hoc basis as necessary to consider
specific issues, such as potential corporate activity, supported by
detailed Board papers circulated in advance analysing relevant
aspects of the topic under discussion.
Board Roles and Responsibilities
The roles of the Chair and the Chief Executive Officer are separate and
• undertaking the annual evaluation of the Board and the
Directors and building an effective Board.
The Chief Executive Officer and Chief Financial Officer are responsible
for the implementation of the approved strategic and financial
objectives of the Group.
The Chief Executive Officer’s responsibilities include:
• the day-to-day running of the business, accountable for the
Group’s financial and operational performance
• developing and reviewing the Group strategy;
• maintaining close contact with major customers, suppliers
and shareholders
• chairing the Group Operations Board to direct and
co-ordinate the management of the Group’s business
generally, including sales and marketing, customer delivery
defined in writing. This provides a clear division of responsibilities
and satisfaction and product development;
between the running of the Board and the executive responsibility for
running the business. The key responsibilities of the Chair, the Chief
Executive Officer and Non-executive Directors are set out below:
• with the Chief Financial Officer, approving the
divisional budgets;
• monitoring the performance of senior managers; and
54
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022
The Chief Financial Officer responsibilities include:
• Supports the Chief Executive in developing and implementing
the Group strategy;
Operations Board for managing the business on a day-to-day basis.
From 1st July 2021 the Board has been made up of a majority of
independent Non-executive Directors, and is comprised of the roles of
Chief Executive Officer, the Chief Financial Officer, the Non-Executive
• Produces the annual budget and long-term strategic and
Chairman, and two Non-Executive Directors.
financial plan; and
• Analyses operations and performance to ensure
maximisation of shareholder value over the long term
• Ensures effective financial reporting, processes and controls
are in place;
• Leads the finance and admin function;
• Monitoring the Group’s principal financial risks, and
safeguarding its assets.
• Oversees the Company’s relationships with the
investment community.
The Non-executive Directors provide independent, constructive
challenge and insight to the executive team forming an integral part
of the Board’s decision-making process together with the monitoring
of management and business performance. The Non-executive
Directors play a key role in developing and reviewing proposals on
strategy, actively participating in the regular strategy forums. They
strengthen governance through leading and participating in the Board
committees, providing a wide range of experience and independence.
This aids the Board in developing a broader understanding and in
evaluating the implications, risks and consequences of decisions.
Board effectiveness
The board undertakes a periodic assessment of its effectiveness.
Further information is shown under Principle 7 of the Corporate
Governance statement.
Board composition and changes
The Board is satisfied that the size of the Board and its committees
and the balance of Executive and Non-executive members is such
that no individual or small group of individuals can unduly influence
its decisions.
As mentioned in my statement on page 14 various Board changes
have occurred during the financial year. These changes gave us the
opportunity to streamline the main D4t4 Board to allow increased
focus on corporate governance, group strategy formulation as well
as investor and wider stakeholder relations, whilst creating a Group
When considering Board appointments, a wide variety of factors is taken
into account, including the balance of skills, experience, independence,
knowledge of the Group and diversity, including gender.
The directors have a broad range of international business knowledge
and experience, as well as specific skills in the digital technology,
growth companies, finance, corporate transactions, investor relations,
and risk management. A skills matrix reflecting this experience is
included in the Directors’ biographies on page 51.
KEY TOPICS CONSIDERED BY THE BOARD IN 2021/22
• Review, debate and challenge of the corporate strategy and plan
• Improvement to Management information and KPIs
• Presentations on product roadmap, information security,
tech strategy and cybersecurity
• Review of Marketing and relaunch of corporate and
product branding
• HR improvements including employee engagement and culture
• ESG Reporting and Carbon Footprint Audit
• Acquisition of Prickly Cactus
• Board restructuring and new organisation structure
• Approval of appointments of B Bruno and A Mehta
• Risk management and internal controls, including a robust
assessment of the principal risks
• Updated Treasury Policy
• Review and update or Matters Reserved for the Board and Terms
of Reference of board committees
• Group Business Plan and Budget
• Review of Covid status and hybrid policy to safeguard staff
• Financial results announcements, presentations, report and
accounts and market updates
• Investor engagement and analyst coverage
• The Group’s going concern statement, profitability and
dividend policy
• Change of auditor, and corporate lawyers
55
D4t4 Solutions plc Annual Report and Accounts 2022
Corporate Governance Statement continued
Group Operations Board
Following the restructuring of the plc board in June 2021, the Board
Internal control
The Board has ultimate responsibility for the Group’s internal
created a Group Operations Board to focus on day-to-day operations
control arrangements and for reviewing their effectiveness, which
and delivery. This meets weekly and is now comprised of the
guide and direct the Group’s activities to support delivery of its
following roles;
• Chief Executive Officer
• Chief Financial Officer
• Chief Technical Officer
• VP – Marketing
• VP – Global Sales
• Chief Security Officer
• Director of Managed Services
strategic, financial, operational and other objectives and safeguard
shareholders’ investment and the Group’s assets. The Board
recognises that a system of internal control reduces, but cannot
eliminate, the likelihood and impact of poor judgement in decision
making, human error, deliberate circumvention of control processes
by employees and others, management override of controls and the
occurrence of unforeseeable circumstances.
The Board sets policies and seeks and obtains on an ongoing basis,
both directly and through the audit committee, assurance regarding
the existence and operation of appropriate internal controls to
mitigate key strategic, financial, operational, compliance and
reputational risks.
Risk management
Key risks and uncertainties affecting the business are regularly
The Board and audit committee consider any significant control
matters raised in reports from management, and the external auditor
assessed and updated. The Board challenges management to ensure
and they monitor the progress of remedial actions.
appropriate risk mitigation measures are in place. An outline of the
Group’s key risks and uncertainties is shown on pages 26 to 29.
The key features of the Group’s overall control frameworks, all of which
were in place throughout the year and up to the date of approval of
In light of the new and emerging risks or uncertainties arising from the
this report, are set out below:
Group’s strategic growth plans and the wider economic, political and
market conditions, a rolling risk review process has been implemented
which seeks to ensure that risks are constantly monitored, assessed
• Delegated limits of authority in place;
• An appropriate finance function across the Group with suitably
and quantified, so that action may be prioritised by the Board
qualified and experienced professionals;
accordingly. This process is undertaken by the Risk Committee which
reports to the board on a monthly basis.
• Segregation of duties, authorisation limits and other key
internal controls are designed into both system-based and
The incidence of the global pandemic over the last two years, coupled
manual processes.
with increasing global economic and political volatility, has resulted
in unprecedented times. The Group continues to monitor closely risks
affecting the business and seeks to mitigate them as far as possible.
• A comprehensive monthly financial and operational performance
reporting system which covers, amongst other things, operating
results, cash flow, balance sheet information, forecasts and
comparisons against budgets;
• A risk committee meeting on a regular basis to review and monitor
risk and mitigating controls across the Group; and
• Regular updates to the Board from management on insurance,
litigation, human resources, sustainability and health and
safety matters.
56
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 These arrangements are reviewed periodically by management to
The Group whistleblowing procedures include a confidential reporting
ensure they remain appropriate.
The Group has extensive internal quality assurance processes in
critical areas of the business and there are functions within the Group
that provide assurance and advice covering specialist areas, such as
information security.
The Group’s businesses hold an ISO certifications for ISO 27001:
hotline operated by an external, independent service provider. The
policy and reporting hotline continue to be internally promoted. All
employees are required to acknowledge that they have read and
understood the policy and procedures.
Directors’ responsibilities
A statement of the Directors’ responsibilities in respect of the accounts
Information Security. Throughout 2021, the Group maintained the
is set out on page 83 of the Annual Report.
Stakeholder engagement
The Board continues to engage with stakeholders and welcomes
ongoing dialogue throughout the year. Further information is
contained in our Stakeholder Engagement report on pages 30 to 34.
Conflicts of interest
Directors have a legal duty to avoid conflicts of interest. Prior to
appointment, conflicts of interest are disclosed and assessed to
ensure that there are no matters which would prevent that person
from taking on the appointment. Disclosure of directors interests is
a standing item on the board meeting agenda and any new interests,
whether conflicting or not, are disclosed during that item.
If any potential conflict arises subsequently, the Articles of Association
permit the Board to authorise the conflict, subject to such conditions
or limitations as the Board may determine. In situations where a
potential conflict arises, the Director concerned will not be permitted
to remain present in any meeting or discussion concerning that
conflict, and all material in relation to that matter will be restricted,
including Board papers and minutes.
ISO certifications for all our UK, US and India locations. The Group
continues to review and make improvements to the implementation
of these standards.
Financial planning and monitoring
The Group sets annual budgets, which are subject to Board approval.
Financial information, including actual performance versus budget
and expected future performance, is provided to all Board members
as part of the Board papers. The monthly reporting cycle includes a
rolling forecast.
Policies, procedures and authorisation limits
The key policies and documented procedures in place include:
• Group delegated authority limits;
• Group treasury policy;
• Group share dealing code;
• Group anti-bribery and corruption policy;
• Group human resource and staff welfare policies;
• Group health, safety and environmental policies;
• Group code of ethics and standards of business conduct;
• Group data governance policy;
• Group information security policy;
• Group anti-fraud policy; and
• Group whistleblowing policy.
57
D4t4 Solutions plc Annual Report and Accounts 2022 Application of the QCA Corporate Governance Code
This section describes how D4t4 Solutions plc has applied and complied with the main and supporting principles of the QCA Corporate
Governance Code (2018).
In last year’s Statement of Corporate Governance there were two areas where the Group was not fully compliant with the ten key principles of the
QCA Code. These have been addressed as far as possible during the year. These are shown below followed by a review of each of the principles
in turn.
No significant corporate governance matters arose during the period covered by the Annual Report 2022, 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.
The following table summarises the specific areas within one of the principles where the Board considers that the Group did not fully comply, or
may be perceived as not fully complying, with the QCA Code, throughout the year.
Principle 5 -Maintain the Board as a well-functioning, balanced team led by the Chair
Application
Exceptions and explanations
The Board should have an appropriate
balance between Executive and Non-
Executive Directors.
At the start of the 2021/22 financial year, the Board consisted of seven members, three
Non-Executive (all of whom were considered independent) and four Executive. On 28
April 2021, C Irvine resigned from the Board. On 30 June 2021 J Dodkins and M Boxall
resigned from the Board. On 27 August 2021 and 01 September 2021, B Bruno and A Mehta
respectively were appointed to the board. On 31 March 2022, P Kear stepped down from
the board, which now consists of two Executive and three Non-Executive members, all of
whom are considered independent. The general expectation that at least half of a Board
should be independent Non-Executives has been satisfied since 1 July 2021.
Principle 6- Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities)
Application
Exceptions and explanations
The Board should contain the necessary
mix of experience, skills, personal qualities
(including gender balance) and capabilities
to deliver the Group’s strategy over the
medium to long term.
The male to female ratio on the Board is presently 4:1 and there are currently no female
Executive Directors. We believe that this reflects a strong gender bias in the technology
industry as a whole, and the Board remains confident both that the opportunities in the
Group are not excluded or limited by any diversity issues (including gender) and that the
Board nevertheless contains the necessary mix of experience, skills and other personal
qualities and capabilities necessary to deliver its strategy. This is better reflected amongst
the leadership team where we have women in key roles such as VP Marketing, Head
of Fraud, Finance Director, and Head of HR, People and Culture, and members of the
leadership team being located across all three of our main locations.
58
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 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, opportunities and strategy, and the values underpinning them, are detailed in
the Strategic Report within pages 4 to 49 of the Annual Report as follows:
• “Our products and services” (pages 4-5) explains what D4t4 Solutions’ services and products are.
• “Our strategy” (pages 6-7) describes how D4t4 Solutions seeks to transform the business to create shareholder value.
• “Strategy in action” (pages 12-13) illustrates, with case studies, how our customers use and benefit from our products and services.
The Group’s approach to delivering long-term value for shareholders is addressed in the Statement of the Chief Executive Officer on pages 16 to
19. Pages 26 to 29 (“Principal risks and uncertainties”) detail the key risks faced by the business and how these continue to be addressed. Pages
38 to 49 describe how we are embedding ESG into our business.
Principle 2 – Seek to understand and meet shareholder needs and expectations
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.
In the period from 1 April 2021 to the date of this corporate governance statement, the following activities and events with stakeholders have
been arranged 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.
Date
Description of engagement
Group Participants
Notes
June 2021
Preliminary results roadshow
P Kear, B Bruno
August 2021
AGM
Directors
Shareholders invited to attend online and in person
Q&A session
December 2021
Interim results roadshow
B Bruno, A Mehta
December 2021
Capital Markets Day
B Bruno, A Mehta
Various
Shareholder & potential
P Kear, B Bruno, A Mehta
shareholder meeting
59
D4t4 Solutions plc Annual Report and Accounts 2022 Application of the QCA Corporate Governance Code continued
The Board is kept informed of the views of shareholders and other stakeholders at each monthly Board meeting through a report from the Chief
Financial 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.
The Chairman, P Simmonds, is available to shareholders if they have concerns where contact through the normal channel of Chief Executive
Officer or Chief Financial Officer has failed to resolve or for which such contact is inappropriate. P Simmonds can be contacted through the UK
head office contact information shown on our website.
Constructive use of the AGM
The Board uses the AGM to communicate with private and institutional investors and welcomes their participation; all members of the Board are
usually present at the AGM.
Capital Markets Day
In December 2021, we held a Capital Markets Day alongside the release of our interim results. This was a good opportunity for our new Executive
team to meet with shareholders and vice versa. It was also an opportunity to showcase our Celebrus FDP fraud product and for shareholders to put
questions directly to our Head of Fraud, Serpil Hall and our Chief Technology Officer, Ant Philipps. A recording of the day is available on our website.
At all investor 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.
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 industry
We have identified our internal values in order to recruit and maintain talented
leading software and services
and motivated staff. These values form the basis of all communications which are
business is dependent upon
sought through internal appraisals and regular cross-functional meetings.
good communications within our
organisation.
There are also regular opportunities for the staff to engage with other parts of
the organisation and recognise the successes of others. Examples include staff
brunches and bi-monthly Group-wide “Town Hall” meetings, which are held to
provide staff with an operational and sales update on what is happening within the
business and ask any questions they may have of any of the leadership team.
Since the year-end we have launched an HR system which facilitates more effective
employee engagement and communication across our various locations. This is
particularly important in a world where, post-Covid, employees will probably never
return to being in the office every day. This system has already proven to be every
effective.
60
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Stakeholders
Reason for engagement
How we engage
Clients & Partners
Understanding current and
We have account managers and account directors whose primary responsibility is to
emerging requirements of clients
engage with our clients and partners to understand and develop our products and
enables us to develop new and
services so that we can work with them to exceed their requirements.
enhanced services, together with
software to support the fulfilment
of those services.
In relation to our own IP products we seek formal and informal feedback on product
roadmap and enhancements via our support offering and annual user group
meetings.
Suppliers
Our relationships with our suppliers
We treat all suppliers with respect and care, building long term collaborative
are key to the core success of our
relationships and where possible working within the local community, and ensuring
business.
ongoing communication so that feedback can be received and acted upon. We seek
to ensure that supplier invoices are processed and paid promptly.
Shareholders
As a public company it is vital that
This is achieved in several ways:
we build relationships with our
shareholders so that we can both
inform them of our successes and
listen to their guidance.
• Regulatory news releases
• Investor relations section of the Group’s website
• Annual and half-year reports and presentations
• AGM
• Capital Markets day 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.
Industry bodies
Information security is fundamental
We have an established information security management system which
to our business, clients, partners,
encompasses independently audited ISO27001 and PCI DSS controls, industry
suppliers and associated data
best practices, as well as latest regulatory requirements including General Data
subjects and so we ensure that our
Protection Regulations (GDPR) and the UK Data Protection Act (2018). Our experienced
policies and procedures provide
Information Security Committee ensure that governance, risk and compliance is
a cohesive approach to this
actively managed and that our policies and procedures evolve to meet ongoing
important area.
requirements.
Communities
We consider that it is important to
We look to recruit locally experienced staff and through the local universities, in all of
be a business that makes a positive
our locations. We employ local suppliers where possible and throughout the year, we
contribution to local economies and is
encourage staff to identify charities that they have an affiliation with for the Group as a
attractive as an employer and partner.
whole to support. Further information is available in the ESG Report on pages 38 to 49.
Environment
Irrespective of our status as a public
We endeavour to use technology wherever possible such that meetings with both
company, it is part of our ethos to
internal and external stakeholders can be held online, thus reducing the need for
conduct business operations that
travel. This further extends to allowing employees to work at home, further reducing
minimise any adverse impact on the
commuting costs on both economic and environmental grounds. In addition, our HQ
climate these may have.
at Sunbury uses the latest standards in insulation, lighting, heating and energy waste
reduction and is now fully powered using renewable resources. During the year we
appointed an external consultancy to conduct a carbon audit. Further details are given
in the ESG report on pages 38 to 49.
61
D4t4 Solutions plc Annual Report and Accounts 2022 Application of the QCA Corporate Governance Code continued
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 Annual Report at pages 26 to 29 (“Principal risks and
uncertainties”) and pages 52 to 57 outline the control environment the Board has put in place – as per Principles 8 and 9 of the QCA Code – to
promote a corporate culture based on ethical values and behaviours and to maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Directors and 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 Company has a Risk sub-Committee appointed by, and reporting directly to, the Board. It’s
membership includes the Chief Technology Officer, the Chief Financial Officer, the Director of Finance and the Chief Information Security Officer;
other members of the Company are 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, vulnerability to risks and recommendations for mitigation.
• A review of the risk register is included in the monthly Board pack
• A quarterly report provided to the Board
• A formal assessment of risks during the annual budget process]
The Risk Committee meets every two months, or more often as required, and on each occasion reviews two areas of the corporate risk register
in detail to assess the vulnerability of the Group to risks under consideration and how to mitigate such risks. Employees from with the relevant
areas of the business are invited to help provide a more informed opinion of which risks are key and how they can be managed. The Committee
report back to the Board with any changes in, or new areas of, vulnerability to risks and recommendations for mitigation. The global pandemic is
an example of an occasion when the Risk Committee has convened more frequently in order to review the register for any changes to the level of
risk due to the pandemic and the emergence of any new issues which may require mitigation.
Principle 5 – Maintain the Board as a well-functioning, balanced team led by the Chair
Composition
Directors’ biographies are shown both in the and on the Group’s website.
The Board is currently comprised of the Non-Executive Chairman, two Executive Directors and a further two Non-Executive Directors. At the date
of this corporate governance statement, all of the Non-Executive Directors are considered to be independent. The Board does not consider it
necessary to appoint an independent Director to a formal “Senior Independent Director” role.
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 any Non-Executive Director whose independence may be called into question is subject to re-election annually.
Both of the Executive Directors are full-time employees of the Group.
Operation of the Board
The Board is responsible to shareholders for the proper management of the Group. A statement of the Directors’ responsibilities in respect of the
financial statements is set out on page 83 and a statement of going concern is given on page 82.
The Board meets at least eleven times a year, and more often if required. The formal schedule of matters specifically reserved to it for decision
was reviewed and adopted by the Board on 24 May 2022 and is reviewed annually (see Group’s website).
62
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Other matters are delegated to the Executive Directors, supported
of which they are members. In addition, the Directors are expected to
by policies for reporting to the Board. Presentations are made to the
attend strategy and business planning meetings each year. The Non-
main Board at each monthly meeting by the Executive Directors and
Executive Directors are expected to make themselves available at all
also on regular occasions by operational management.
reasonable times for consultation by other members of the Board.
The Company Secretary is responsible for ensuring that Board
Prior to each monthly Board meeting the Directors receive a detailed
procedures are followed, and that applicable rules and regulations
pack which includes:
are complied with and for advising 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.
• Board meeting agenda
• Minutes from previous Board meeting
• Board pack which includes financial summary, update on each
part of the business, an operations update and risk assessment
The Non-Executive Chairman and Non-Executive Directors are able
update
to meet without Executives present prior to each Board meeting. The
agenda and relevant briefing papers are distributed in advance of each
• Papers as required for additional items requiring Board attention
Board meeting.
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 asked to provide a written statement to the Chairman for
circulation to the Board if there are any such concerns.
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 or online, and to attend all meetings of any Committee(s)**
Meetings and attendance
The following table summarises the number of Board, Audit
Committee, Nomination Committee and Remuneration Committee
meetings held during the period covered by the Annual Report 2022
and the attendance record of individual Directors at those meetings:
PA Simmonds
PF Whiting
M Biddulph
B Bruno (appointed 27 August 2021)
A Mehta (appointed 1 September 2021)
PJ Kear (resigned 31 March 2022)
JL Dodkins (resigned 30 June 2021)
MG Boxall (resigned 30 June 2021)
CC Irvine (resigned 28 April 2021)
Board
17/17
17/17
17/17
10/10*
10/10**
17/17
5/5
5/5
2/2
Audit
Remuneration
Nomination
3/3
3/3
3/3
–
–
–
–
–
–
4/4
4/4
4/4
–
–
–
–
–
–
5/5
5/5
5/5
1/1
–
2/4
–
–
–
* also attended 7 as an observer; ** also attended 1 as an observer
The Board met monthly as in prior years but also had additional ad-hoc meetings to discuss, amongst other matters, the global pandemic,
business strategy and board changes.
63
D4t4 Solutions plc Annual Report and Accounts 2022
Application of the QCA Corporate Governance Code continued
Principle 6 – Ensure that between them the Directors have
the necessary up-to-date experience, skills and capabilities
Principle 7 – Evaluate Board performance based on clear
and relevant objectives, seeking continuous improvement
The Annual Report 2022 includes, at pages 50-51, biographies of the
The Board periodically reviews the it’s own effectiveness, as well
current Board of Directors, details of their experience including a
as that of its Committees and individual Directors in the following
skills matrix.
manner:
This information is also on the Group’s website. The range of skills
(i) The role of the Committees is considered by the Executive
at the board is also considered by the Nominations Committee in its
Directors without the presence of the Non-Executive Directors.
assessment of board requirements.
(ii) The Chairman and CEO examine the contribution and
All Directors are expected to keep their skills up to date, and it is Board
effectiveness of the individual Directors with regard to their line
policy that Executive Directors receive suitable ongoing training for
role and contribution at Board meetings.
their position. The Chairman ensures that all 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 and Nominated Adviser on
changes to the AIM rules, requirements under the Companies Act and
other regulatory matters. Directors may consult with the Company
(iii) The whole Board examines its purpose and effectiveness with
regard to identified key areas.
(iv) The whole Board considers its structure, size and composition
with particular regard to the skills, knowledge and experience
of its members and otherwise as advised by the
Secretary or Nominated Adviser at any time on matters related to their
Nomination Committee.
role on the Board.
External advice
In addition, a formal Board effectiveness evaluation process is conducted
biannually. The process involves all Directors completing a detailed
No significant matters of a corporate governance nature arose during
individual evaluation of Board performance, which covers effectiveness
the period covered by the Annual Report 2022 nor subsequently to
in several areas including Board composition, Board information, Board
the date of this statement on which it was considered necessary for
process, internal control and risk management, Board accountability,
the Board or any of its committees to seek external advice. The Board
CEO/Senior management and Standards of conduct.
consults, on an ongoing basis, with its Nominated Adviser and other
professional advisers on routine matters arising in the ordinary course
of its business.
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, with progress on any actions arising monitored
at the monthly Board meetings.
The results of the last evaluation, carried out during early 2020, were
interpreted by M Biddulph and presented to the Board at the meeting
held in April 2020. Improvements in a number of areas were noted,
for example board composition and size, and risk management.
Areas were identified for action or closer monitoring, with a focus on
succession planning and long-term strategy.
As the business expands and as part of succession planning, the
Executive Directors have been challenged to identify potential internal
candidates who could potentially occupy Board positions and set out
development plans for these individuals and these are in progress.
64
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022
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
D4t4 Solutions is dedicated to the development of 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
D4t4 Solutions takes pride in its relationships with customers, working hard to understand their business needs and developing trust through
professional and responsive 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 our customers.
Pride
D4t4 Solutions will be a Group in which we can be proud of our achievements, delivering the highest standards of quality and being confident in
our ability to satisfy our customers’ needs.
Recognition
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.
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 the induction process.
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 believes that the Executive Directors represent these values and convey them effectively throughout the organisation.
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 Directors and senior management are committed to implementing
and enforcing effective systems throughout the organisation to prevent bribery in accordance with its obligations under the Bribery Act 2010.
65
D4t4 Solutions plc Annual Report and Accounts 2022 Application of the QCA Corporate Governance Code continued
Principle 9 – Maintain governance structures and processes that are fit for purpose and support good decision-making by
the Board
Roles and responsibilities of Directors
The Annual Report 2022 includes, at pages 50-51, descriptions of the individual roles and responsibilities of the Chairman, Chief Executive Officer
and other Directors.
The Board and its Committee composition
The Board is currently comprised of the Non-Executive Chairman, two Executive Directors and a further 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.
The Company Secretary is J Thorne, a solicitor of over 25 years standing, who was appointed to the role on 27 July 2017. He is not a Director of
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 68 of the Annual Report 2022. The Chair of each Committee reports to the Board
on the activities of that Committee.
The terms of reference for each of the Audit, Remuneration, Nomination can be found on the Group’s website.
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 monitors 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 last year that an additional sub-committee should be formed to focus on ESG
(environmental, social & governance). This committee is comprised mainly of staff members who volunteered for the role due to a particular
interest in driving the Group’s ESG agenda. In March 2021, the first sitting of this ESG Committee took place.
The Committee was predominantly formed to focus on the Group’s environmental and social initiatives, as governance is clearly a focus of the
whole Board and all committees.
As the Group continues to grow the Board fully recognises both the importance and the need of the governance framework to continue to evolve.
This has been evidenced over the last two years by the formation of the Risk and ESG sub-committees and the external advice sought regarding
the new executive LTIP scheme.
66
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Principle 10 – Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
A range of forums 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.
Board Committees
A description of the work of the Board’s Committees in the financial year to 31 March 2022, including a report from each of the Audit,
Remuneration and Nomination Committees, is set out at pages 68 to 73 of the Annual Report 2022.
Votes at General Meetings
All resolutions put to the AGM held on 26 August 2021 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 years and notices of all General Meetings, can be found on the Group’s website.
67
D4t4 Solutions plc Annual Report and Accounts 2022 Report of the audit committee
Reviewing of financial
performance and controls
Dear Shareholder
I am pleased to present the report of the Audit Committee for the year
ended 31 March 2022.
The Audit Committee comprises three Non-Executive Directors of the
Company, all of whom served for the entirety of the year. By invitation,
the meetings are also attended by the CEO and CFO of the Company.
The Audit Committee includes one financially qualified member as
recognised by the Consultative Committee of Accountancy Bodies, but
all Audit Committee members are expected to be financially literate.
The Committee is chaired by myself and met three times during the
year under review. It operates under formal terms of reference, which
were reviewed and updated during the year and are now available on
our website.
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.
68
The Audit Committee advises the Board on the appointment of
external auditors and on their remuneration and independence, both
for audit and non-audit work, and discusses the nature and scope
of their audit. If required, the Audit Committee meets the auditors at
least once a year without any Executive Directors present. 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.
With RSM UK Audit LLP and its predecessor firms having been in the
role since 2010, during the year the Committee undertook a thorough
review of the auditor function and ran a selection process for the
auditor role for the Group. The process identified five audit firms that
were invited to submit proposals and the Committee proposed to the
Board that Haysmacintyre LLP (“Haysmacintyre”) be appointed as the
Group’s new auditor.
Haysmacintyre acts for a number of public companies, both fully
listed and AIM, operating across a number of sectors, and has a strong
presence in the technology sector. The Committee was very impressed
throughout the process with the Haysmacintyre account team,
their approach, and their references. I’d like to thank RSM for their
work over the last ten years. RSM have confirmed that there are no
circumstances which they consider should be brought to the attention
of shareholders.
I am satisfied that the Committee has satisfactorily discharged its
duties in the year in accordance with its terms of reference.
The Audit Committee has recommended to the Board that
Haysmacintyre LLP is re-appointed at the forthcoming AGM.
Peter Simmonds
Chair of the audit committee
6 July 2022
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 COMMITTEE MEMBERS
Peter Simmonds (Chair)
Monika Biddulph
Peter Whiting
Key issues considered during the recent audit
Revenue recognition
• This is a key issue in all audits due to historic misstatement by companies over the years.
The Committee review the Group’s revenue recognition policies to ensure they are
compliant with current accounting standards and applied consistently.
Carrying value of goodwill
• The Committee monitors the intangible carrying value in the Group for any indications
of impairment and undertakes impairment test calculations to support decisions to not
impair goodwill.
Management override of controls
• This is the risk of misappropriation of assets and the risks of misrepresentation of
financial information, in particular in relation to revenue and associated asset and
Valuation of share options
liability accounts.
• The Committee receives updates on internal controls and any instances of
management override.
• This is the risk of incorrect pricing of share options vesting under market conditions,
non-market conditions and LTIP schemes, and hence an incorrect charge being made to
the income statement. This is a complex area and so the Group appointed the Valuations
department of RSM UK Corporate Finance LLP to value the share options under a Black-
Scholes and a Monte Carlo basis.
Capitalisation of development costs
• This is the risk of incorrect capitalisation of research and development costs which do
not fall in line with IAS 38. The Committee reviewed the basis and assumptions for the
capitalisation.
Accounting for the acquisition of
Prickly Cactus Limited
• This is the risk of incorrect accounting for the acquisition of Prickly Cactus Limited, including
the recognition of contingent consideration and subsequent goodwill under IFRS 3.
• The Committee reviewed the calculations and is satisfied that the contingent
consideration will become payable and therefore should be recognised in the
Consolidated statement of financial position.
D4t4 Solutions plc Annual Report and Accounts 2022
69
69
D4t4 Solutions plc Annual Report and Accounts 2022 Report of the nomination committee
A focus on succession
planning
Dear Shareholder
I am pleased to present the report of the Nomination Committee for
the year ended 31 March 2022.
The Nomination Committee comprises four Directors: three Non-
Executives Directors (myself, Peter Simmonds and Peter Whiting) and
one Executive Director, which was Peter Kear until February 2022,
Bill and Peter had been working closely together over the first six
months of the financial year and in October 2021, Bill was appointed
CEO, with Peter moving to the role of Deputy CEO and providing
continuing support until June 2022. I would like to thank Peter Kear for
his dedication and continuing support during the transition.
and Bill Bruno from February 2022. In the performance of its duties,
In addition to CEO succession, the nomination committee actively
the Committee held three meetings in the year. The principal activity
engaged in the CFO succession, where a specialist recruiter was
of the Nomination Committee in the year was overseeing the CEO
used to assemble a high calibre shortlist. Following a thorough
transition, the appointment of a CFO successor as well as succession
interview process and deliberations, in September 2021 Ash Mehta
planning , and board composition.
was appointed as CFO. Ash is an experienced public company
I’m delighted to report that in April 2021, following a thorough
selection process, Bill Bruno was appointed as CEO designate to
succeed Peter Kear. Bill has an in-depth understanding of the digital
data industry and has played an active role in shaping the future
finance director and has extensive experience in investor relations,
strategic finance, managing growth, fundraisings, and M&A. Myself, the
Nomination Committee and the Board are very pleased having Ash on
board and look forward to working with him!
strategy at D4t4 since he joined the Group in 2018. He is well placed to
The Nomination Committee further considers the Board composition
drive D4t4’s next phase of growth.
70
and the balance between Non-Executive and Executive Directors
as well as the mix of skills amongst the independent Non-Executive
Directors and decide on appropriate actions to be taken.
Following on from the CEO and CFO appointments, and as a result of
the main Board reorganisation, Mark Boxall, Chief Operating Officer
and Jim Dodkins, Chief Technology Officer, stepped down from the
main Board in June 2021 to serve D4t4 on the new Group Operations
Board below the main D4t4 Board. The Group Operations Board will be
focused entirely on the execution and delivery of Group strategy, and
will, in addition to the CEO, CFO, COO and CTO, include a small number
of other senior individuals. On behalf of the Nominations Committee
and the board I would like to thank Jim and Mark for their many years
of service on the board. I am confident that the new Group Operations
Board will provide added focus and efficiency for the delivery of
shareholder returns.
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 COMMITTEE MEMBERS
Monika Biddulph (Chair)
Peter Kear +
Bill Bruno ++
Peter Simmonds
Peter Whiting
+ Peter Kear left from the Committee on 24 February 2022
++ Bill Bruno joined the Committee on 24 February 2022
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 20% of Board membership.
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 recommendations.
This is designed to ensure that they have sufficient time to meet what
is expected of them and keeps any changes to these commitments
under review.
I am satisfied that the Nomination Committee has satisfactorily
discharged its duties in the year in accordance with its terms of
reference, which are reviewed on an annual basis.
Monika Biddulph
Chair of the nomination committee
6 July 2022
D4t4 Solutions plc Annual Report and Accounts 2022
71
71
D4t4 Solutions plc Annual Report and Accounts 2022 Report of the remuneration committee
Determining executive
remuneration
Dear Shareholder
I am pleased to introduce the Directors’ Remuneration Report for the
year ended 31 March 2022.
The Committee has consisted throughout the entire year of three Non-
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.
Executive Directors; Peter Simmonds, Monika Biddulph and me.
For the financial year to 31 March 2022, the Remuneration Committee
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 2022. 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
has continued to operate a remuneration structure made up of
basic salary, pensions and benefits, annual performance-related
bonuses, and a long-term incentive plan (LTIP). As in prior years, a
significant proportion of executive remuneration has been based
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 against the targets set a
year ago, set performance targets for the following financial year and
made recommendations to the Board on the overall packages for the
Executive Directors.
The committee believes that a combination of Total Shareholder
Return (TSR) and growth in EPS provides an optimal alignment with
shareholders over the medium term, and these remain the basis of the
vesting criteria of the LTIP grants made during the year.
A significant management transition took place during the year, with
the roles of both the Chief Executive Officer and Chief Financial Officer
being assumed by new incumbents, namely Bill Bruno and Ash Mehta
respectively. In the case of Bill, this was by internal promotion, whilst
Ash was recruited externally. The Remuneration Committee worked
72
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 closely with the Nomination Committee and the wider Board during
the period of selection and thereafter. In particular, we wished to
ensure that the packages offered to Bill and Ash were appropriate to
the nature and complexity of the specific roles, align with the wider
COMMITTEE MEMBERS
Peter Whiting (Chair)
recruitment market, and encourage the building-up of meaningful
Peter Simmonds
shareholdings in the Group. We also set personal objectives for all of
the executive directors including retiring CEO Peter Kear designed to
Monika Biddulph
ensure that the transition of internal reporting lines and external client
and supplier relationships took place as smoothly as possible.
I am satisfied that the Committee has appropriately discharged
its duties in the year in accordance with its responsibilities and
encourage you to read the Directors Remuneration Report on the
following pages.
Peter Whiting
Chair of the remuneration committee
6 July 2022
D4t4 Solutions plc Annual Report and Accounts 2022
73
73
D4t4 Solutions plc Annual Report and Accounts 2022 Directors’ remuneration report
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 Group’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 2022.
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 or
deliver on the Company
1 April.
responsibility. In deciding appropriate levels, the
strategy in the interest of the
shareholders.
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
comprise private healthcare
benefits, premiums are paid by the Company to an
high-quality Executives to
and death in service insurance.
external broker to arrange cover, in line with other
deliver on the Company
strategy in the interest of the
shareholders.
Group employees. These benefits are standard for all
Group employees.
The Company offers company cars / car allowances to
a number of employees across the organisation.
Annual bonus
Rewards and incentivises the
The Committee sets annual
The Remuneration Committee sets bonus plans for
Executive Directors
performance targets, linked to
Executive Directors based upon achieving a number
for achievement of strategic
strategic objectives
of pre-defined growth targets including ARR and
objectives.
and risk management. Bonus
Adjusted Profit before tax.
payments in respect of a year
are made in June, or later if
any element is deferred.
74
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Element of remuneration
Link to Group strategy
Operation
Framework
Share option plan (LTIP)
Aligns the interests of the
The Remuneration Committee
The share option plans are subject to rules and
Executive Directors with the
has discretion to make
limits approved by shareholders in general meeting.
interest of the long term
option grants to Executive
Any exercise is subject to satisfaction of the specified
shareholders.
Directors and other staff,
performance conditions.
subject to the scheme rules,
and to determine appropriate
performance conditions.
Pension
Ensures that the Company
Pension contributions are
Executive Directors are members of the Company
can recruit and retain high-
made by the Company to a
Money Purchase pension scheme.
quality Executives to deliver
defined contribution scheme
on the Group strategy in the
operated by third party
interest of the shareholders.
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 their salary
by way of salary sacrifice. There are no unfunded
pension promises or similar arrangements for
Directors. There were 3 Directors in the scheme in
2022 (2021: 4).
Chairman and Non-
Executive Director fees
Ensures that the Group can
Fees for Non-Executive
A basic fee is set for normal duties, commensurate
recruit and retain a high-
Directors are set by the Board
with fees paid for similar roles in other similar
quality Chairman and Non-
(excluding Non- Executive
companies, taking account of the time commitment,
Executive Directors to deliver
Directors). Fees are paid
responsibilities, and committee position(s).
on the Group strategy in the
monthly or quarterly.
Supplementary fees are paid for any additional
interest of the shareholders.
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.
Loss of office payments
In the event of early termination, all of the Directors' contracts provide for compensation up to a maximum of basic salary 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.
75
D4t4 Solutions plc Annual Report and Accounts 2022 Directors’ remuneration report continued
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.
Service contracts and letters of appointment
It is the Company’s policy that Executive Directors should have contracts with an indefinite term providing for a maximum of one year’s notice.
Executive Directors
Bill Bruno has a Directors’ service agreement dated 27 August 2021 which can be terminated on six months’ notice. Ash Mehta has a Directors’
service agreement dated 12 May 2021 which can be terminated on three months’ notice.
Non-Executive Directors
P Simmonds, P Whiting and M Biddulph 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.
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
76
£000
2022
1,232
39
1,271
537
129
1,937
2021
1,352
39
1,391
194
183
1,768
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022
Single figure for the total remuneration (audited)
31 March 2022
Fees/basic
Benefits
Bonus
Sub total
Pension
Executives
Bill Bruno (appointed 27 August 2021)
Ash Mehta (appointed 1 September 2021)
Peter Kear (resigned 31 March 2022)
Mark Boxall (resigned 30 June 2021)
Jim Dodkins (resigned 30 June 2021)
Charlie Irvine (resigned 28 April 2021)
Non-Executives
Peter Simmonds
Peter Whiting
Monika Biddulph
John Lythall (resigned 31 March 2021)
Total
salary
£000
149
100
229
46
41
11
69
48
47
–
740
£000
£000
£000
£000
3
1
6
1
4
1
–
–
–
–
270
131
75
–
–
–
–
–
–
–
422
232
310
47
45
12
69
48
47
–
9
6
10
3
10
1
–
–
–
–
Total
2022
£000
431 –
238
320
50
55
13
69
48
47
–
Total
2021
£000
–
422
345
318
146
50
45
40
25
16
476
1,232
39
1,271
1,391
Remuneration of highest paid Director
Remuneration
Company contributions to money purchase pension schemes
2022
422
9
431
2021
412
10
422
Emoluments for the highest paid Director for the year ended 31 March 2022 and 31 March 2021 are included in the table above. The highest paid
Director exercised no share options during the year (2021: nil options exercised).
Annual bonus payments for executive directors are typically paid 70% in cash and 30% in shares deferred for two years. To ensure a period of
ongoing alignment with shareholders beyond his retirement date, the committee considered it appropriate to pay Peter Kear's bonus for the year
entirely in shares deferred for one year.
77
D4t4 Solutions plc Annual Report and Accounts 2022
Directors’ remuneration report continued
Directors share options
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:
B Bruno
A Mehta
P Kear
J Dodkins
M Boxall
Number at
Number at
31 March 2021
31 March 2022
Option price
Expiry date
Exercisable from
54,000
–
–
138,591
105,593
118,792
166,666
54,000
115,823
58,290
138,591
–
–
–
2.0p
2.0p
2.0p
2.0p
2.0p
2.0p
8 January 2031
15 July 2023
28 October 2031
28 October 2024
28 October 2031
28 October 2024
10 August 2030
10 August 2023
10 August 2030
10 August 2023
10 August 2030
10 August 2023
149.0p
13 August 2038
1 July 2021
The awards made during the year were made in two tranches as set out below under the terms of the D4t4 Long Term Incentive Plan (“LTIP”).
These awards have been made following the recent appointment of the two directors to their respective roles:
Director/PDMR
Position
Tranche A (Shares)
Tranche B (Shares)
B Bruno
A Mehta
Chief Executive Officer
Chief Financial Officer
66,185
34,974
49,638
23,316
The awards are all exercisable at a price of two pence per Share and
No directors (2021: one) exercised options during the year (2021:
will vest three years after the grant date of 28 October 2021, subject to
166,667) with gains on exercise of share options during the year totalling
the continued employment of the relevant director.
£nil (2021: £227,000). No director’s options lapsed during the year.
Vesting of awards in Tranche A is also subject to the satisfaction over
The market price of the shares at 31 March 2022 was 262.5p (31 March
the three-year period from the date of grant of specified performance
2021: 302.5p) and the range in the period under review was 262p to 400p.
conditions, based on the Company’s relative Total Shareholder Return
(TSR) in respect of half of the award, and growth in Annual Recurring
Revenue (ARR) in respect of the other half. Vesting criteria have been
set as follows:
• 15% compound growth in ARR to achieve minimum award
vesting, with a sliding scale above this level, up to full vesting at
27.5% compound growth; and
• TSR of no less than median performance against the selected
benchmark for minimum vesting, with a sliding scale above this
level, up to full vesting for top-quartile performance.
There have been no variations to the terms and conditions or
performance criteria for share options during the financial year.
Directors shareholdings and dividends paid to Directors are disclosed
in the Directors’ Report on page 79.
Advisers
The Committee receives independent advice from FIT Remuneration
Consultants LLP when required.
Tranche B represents a one-off award, without performance conditions.
P Simmonds, C Irvine, P Whiting and M Biddulph did not hold any
share options during the year.
Peter Whiting
Chair of the remuneration committee
78
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022
Directors’ report
The Directors present their annual report and the audited financial
At the AGM, P A Simmonds will offer himself for re-appointment in
statements for the year ended 31 March 2022, which should be
accordance with the Articles. Additionally, B Bruno and
read in conjunction with the Strategic Report on pages 4 to 49. The
A Mehta will be proposed for re-appointment, each having been
Corporate Governance Statement set out on pages 50 to 78 forms
appointed a Director since the last Annual General Meeting.
part of this report.
Incorporation
D4t4 Solutions Plc is a company incorporated in the United Kingdom
under the Companies Act 1985.
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:
Adoption of new Articles of Association
The Articles may be amended by special resolution of the
shareholders. At the forthcoming Annual General Meeting, a special
resolution will be proposed to adopt new Articles of Association. This
is to update the Articles in line with best practice.
B Bruno
A Mehta
P A Simmons
P Whiting
M Biddulph
* or date of appointment if later
Interest at
Interest at
31 March 2022
31 March 2021*
13,000
80,000
346,500
22,000
–
–
24,000
346,500
22,000
–
Directors and Directors’ Interests
The Directors who held office during the year and to the date of
signing, unless otherwise stated, were as follows:
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 78.
B Bruno
(appointed 27 August 2021)
A Mehta
(appointed 01 September 2021)
P A Simmonds
P Whiting
M Biddulph
P J Kear
(resigned 31 March 2022)
J L Dodkins
(resigned 30 June 2021)
M G Boxall
(resigned 30 June 2021)
C C Irvine
(resigned 28 Apr 2021)
With regard to the appointment and replacement of Directors, the
Company is governed by its Articles of Association, the Companies
Acts and related legislation. Such appointments are overseen by the
Nominations Committee. The powers of Directors are described in
the Main Board Terms of Reference, copies of which are available on
request, and in the Corporate Governance Statement on page 52.
In accordance with our Articles of Association and to the extent
permitted by law, Directors are granted an indemnity from the
Company in respect of liability incurred as a result of their office. In
addition, we maintained a Directors’ and officers’ liability insurance
policy throughout the year. Neither our indemnity nor the insurance
provides cover in the event that a Director is proven to have acted
dishonestly or fraudulently.
79
D4t4 Solutions plc Annual Report and Accounts 2022
Directors’ report continued
Capital structure
Under its Articles of Association, the Company has authority to issue
No person has any special rights of control over the Company’s share
50,000,000 ordinary shares. Details of the authorised and issued share
capital and all issued shares are fully paid.
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 and an
entitlement to any dividend announced by the board.
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. None of these are considered to be
significant in terms of their likely impact on the business of the
Group as a whole. Furthermore, the Directors are not aware of any
There are no specific restrictions on the size of a holding nor on the
agreements between the Company and its Directors or employees
transfer of shares, which are both governed by the general provisions
that provide for compensation for loss of office or employment that
of the Articles of Association and prevailing legislation. The Directors
occurs because of a takeover bid.
are not aware of any agreements between holders of the Company’s
shares that may result in restrictions on the transfer of securities or on
voting rights.
Substantial holdings
As far as the Directors are aware, as at 6 July 2022, the only holdings of 3% or more of the Company’s issued share capital were the following:
Canaccord Genuity Wealth Management
Ennismore Fund Management
Herald Investment Management
Investec Wealth & Management
Chelverton Asset Management
P Kear Esq
Number of ordinary shares
7,491,155
3,641,798
2,974,800
2,816,511
2,065,000
1,270,752
%
18.64
9.06
7.40
7.01
5.14
3.16
Acquisition of the Company’s own shares
At the end of the year, the Directors had authority, under the
Treasury shares are ordinary 2p shares purchased in order to satisfy
shareholders’ resolution of 26 August 2021, to purchase through the
outstanding option obligations. Sales from Treasury shares are the shares
market up to 4,023,342 of the Company’s shares at a maximum price
issued to option holders on exercise of their options. The maximum
of 105% of the average middle market price for the five business days
number of own shares held in the year was 224,932 (2021: 199,113),
immediately preceding the date of purchase and a minimum price of
which represents 0.56% (2021: 0.49%) of the issued share capital.
2p per share. This authority expires at the AGM to be held on 03 August
2022. 120,934 shares were purchased and 87,500 shares were sold in
the year ending 31 March 2022, as shown in note 23.
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GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022
Share option schemes
The Company operates share option Schemes which are open
Research and Development
The Group has continued to attach a high priority to research and
to employees. The three current Schemes are the D4t4 Solutions
development throughout the year aimed at the development of new
Employee Share Options ‘A’ Scheme, the D4t4 Solutions EMI Share
products and maintaining the technological excellence of existing
Options Scheme, and the D4t4 Long Term Incentive Plan. Details of the
products.
share options are laid out on page 117 within note 27 to the accounts.
Dividends
The Directors recommend a final dividend of 2.07p (2021: 2.0p) per
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.
ordinary share to be paid this year. Thr directors also recommend a
Bank relationships are maintained to ensure that sufficient cash and
special dividend of 12.50p (2021:nil) per ordinary share to be paid later
unutilised facilities are available to the Group. The Group also has
this year.
exposure to foreign currency rate fluctuations and undertakes hedging
contracts to mitigate potential currency losses.
Financial instruments
The Group’s financial risk management objectives and policies are
discussed on page 120 within note 30 to the accounts.
Branch operations
The Group has branch operations located in Chennai, India.
Political and Charitable contributions
The Group made no political contributions during the year (2021: nil),
and charitable donations of £625 (2021: nil).
Sustainability
Information about the Company’s approach to sustainability risks
and opportunities is set out on pages 38 to 49. Also included on these
pages are details of our greenhouse gas emissions.
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.
System of risk management and internal control
The Board is responsible for maintaining a risk management and
internal control system and for managing principal risks faced by the
Group. Such a system is designed to manage rather than eliminate
business risks and can only provide reasonable and not absolute
assurance against material mistreatment or loss. In accordance with
the Companies Act s414 c(11) information in relation to the business
and risks is shown in the Strategic Report.
Supplier Payment Policy
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 2022 the Company had 25 days
(2021: 40 days) of outstanding liabilities to creditors.
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D4t4 Solutions plc Annual Report and Accounts 2022 Directors’ report continued
Auditor
During the year, Haysmacintyre LLP was appointed as auditor
Going Concern
The Group’s business activities, together with the factors likely to affect
following a thorough review and RFP process of the auditor role
its future development, performance and position are set out above
for the Group, involving five audit firms that were invited to submit
and the risks and uncertainties summarised. The Group and Company
proposals. RSM UK Audit LLP and its predecessor firms had been in
has sufficient financial resources to cover budgeted future cash-flows
the role since 2010.
In accordance with Section 489 of the Companies Act 2006, a resolution
for the re-appointment of Haysmacintyre LLP as the auditor of the
Company is to be proposed at the forthcoming Annual General Meeting.
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:
and has contracts in place with 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 statements.
• 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
By order of the Board
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.
Bill Bruno
Chief Executive Officer
Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, TW16 7EF
This confirmation is given and should be interpreted in accordance
6 July 2022
with the provisions of s418 of the Companies Act 2006.
Future outlook
The Group’s future outlook and opportunities are referred to in the
Chief Executive Officer report on page 16.
82
GOVERNANCED4t4 Solutions plc Annual Report and Accounts 2022 Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report, the
d. prepare the financial statements on the going concern basis
Directors’ Report and the Financial Statements in accordance with
unless it is inappropriate to presume that the group and the
applicable law and regulations.
company will continue in business.
Company law requires the Directors to prepare group and company
The Directors are responsible for keeping adequate accounting
financial statements for each financial year. The Directors have
records that are sufficient to show and explain the group’s and the
elected under company law and the AIM Rules of the London Stock
company’s transactions and disclose with reasonable accuracy at
Exchange to prepare the group financial statements in accordance
any time the financial position of the group and the company and
with international accounting standards in conformity with the
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006 and to prepare the company
requirements of the Companies Act 2006. They are also responsible for
financial statements in accordance with international accounting
safeguarding the assets of the group and the company and hence for
standards in conformity with the requirements of the Companies Act
taking reasonable steps for the prevention and detection of fraud and
2006 and applicable law.
other irregularities.
The group and company financial statements are required by law
The Directors are responsible for the maintenance and integrity of the
and international accounting standards in conformity with the
corporate and financial information included on the D4t4 Solutions
requirements of the Companies Act 2006 to present fairly the financial
plc website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
By order of the Board
Bill Bruno
Chief Executive Officer
Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, TW16 7EF
6 July 2022
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 each of 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 international accounting standards in conformity with the
requirements of the Companies Act 2006;
83
D4t4 Solutions plc Annual Report and Accounts 2022
Independent auditor’s report
to the members of D4t4 Solutions plc
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 2022 which comprise the consolidated statement of comprehensive loss, the consolidated statement of financial position, the parent
company statement of financial position, the consolidated statement of changing in equity, the parent company statement of changes in equity,
the consolidated statement of cash flows 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/ UK adopted international accounting standards.
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 2022 and of the group’s loss for the year
then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union/ UK adopted international accounting standards;
and
• 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 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 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.
An overview of the scope of our audit
Our audit scope included all components and was performed to component materiality. Our audit work therefore covered 100% of Group profit
and total Group assets and liabilities. It was performed to the materiality levels set out below.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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 financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
84
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Key Audit Matter
Revenue Recognition
Included in the Group Statement of Comprehensive Income is
revenue of £24.459m.
Revenue is derived from the sale of own IP, the sale of 3rd party IP, the
provision of delivery services and of support and maintenance.
How our scope addressed the matter
We agreed a number of revenue transactions to cash receipts and
appropriate evidence of customer acceptance in order to gain comfort
over occurrence, completeness and satisfaction of the performance
obligations per the underlying revenue agreements.
We have reviewed and challenged management’s judgment in
applying relevant requirements of IFRS 15, specifically around the
See revenue accounting policy note for further details around revenue
timing of software license sales.
recognition.
As a result of our procedures we conclude that the Group’s revenue is
There is a risk that revenue has not been recognised in line with IFRS
stated accurately in all material aspects.
15 in relation to ongoing contracts with customers.
Our application of materiality
We apply the concept of materiality both in planning and performing
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
our audit, and in evaluating the effect of misstatements on our audit
director's use of the going concern basis of accounting in the
and on the financial statements. For the purposes of determining
preparation of the financial statements is appropriate. Our evaluation
whether the financial statements are free from material misstatement
of the director’s assessment of the entity’s ability to continue to adopt
we define materiality as the magnitude of misstatement that makes it
the going concern basis of accounting included:
probable that the economic decisions of a reasonably knowledgeable
person, relying on the financial statements, would be changed or
influenced. We determined overall materiality for the Group financial
statements as a whole to be £250,000 being 8.75% of adjusted EBITDA
for the year. We considered it appropriate to determine our materiality
based on adjusted EBITDA as we consider this to be the key metric in
assessing the financial performance and position of the Group given
its primary purpose is to generate positive EBITDA for the Groups
shareholders. On the basis of our risk assessments, together with our
assessment of the overall control environment, we apply a different
• We reviewed cash flow forecasts prepared by management and
assessed their adequacy, and also challenged the assumptions
and judgements inherent within them.
• We have corroborated cash levels after the reporting date to
consider whether they are in line with forecasts and investigated
the reasons for any significant discrepancies.
• We reviewed prior period budgets and forecasts against actual
performance to consider management’s ability to accurately
level of materiality, performance materiality, to determine the extent
forecast and budget.
of our testing and this was set at 75% of the overall audit financial
statements’ materiality, being £187,500.
• We have considered pipeline income and contracts to understand
the uncertainty in management’s budgets.
We agreed with management that we would report to the Audit
Committee all audit differences in excess of £12,500 as well as
differences below that threshold that, in our view, warranted reporting
on qualitative grounds. We also report to the Audit Committee on
disclosure matters that we identified when assessing the overall
presentation of the financial statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s
ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.
85
D4t4 Solutions plc Annual Report and Accounts 2022 Independent auditor’s report continued
Other information
The directors are responsible for the other information. The other
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
information comprises the information included in the annual report,
received from branches not visited by us; or
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,
• 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
consider whether the other information is materially inconsistent
require for our audit.
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 its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the directors’ report.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set
out on page 83, 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
We have nothing to report in respect of the following matters in relation
influence the economic decisions of users taken on the basis of these
to which the Companies Act 2006 requires us to report to you if, in our
financial statements.
opinion:
86
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022 Irregularities, including fraud, are instances of non-compliance with laws
of instances of non-compliance. The risk is also greater regarding
and regulations. We design procedures in line with our responsibilities,
irregularities occurring due to fraud rather than error, as fraud
outlined above, to detect material misstatements in respect of
involves intentional concealment, forgery, collusion, omission or
irregularities, including fraud. The extent to which our procedures are
misrepresentation.
capable of detecting irregularities, including fraud is detailed below:
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to regulatory requirements for the company. We considered the
extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations
that have a direct impact on the preparation of the financial statements
such as the Companies Act 2006, income tax and payroll taxes.
We evaluated management’s incentives and opportunities for
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
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
fraudulent manipulation of the financial statements (including the
permitted by law, we do not accept or assume responsibility to anyone
risk of override of controls), and determined that the principal risks
other than the company and the company's members as a body, for our
were related to posting inappropriate journal entries to areas subject
audit work, for this report, or for the opinions we have formed.
to significant judgement and management bias through accounting
estimates. Audit procedures performed by the engagement team
included:
• Discussions with management including consideration of
known or suspected instances of non-compliance with laws and
regulation and fraud;
Jon Dawson
Senior Statutory Auditor
For and on behalf of Haysmacintyre LLP, Statutory Auditors
6 July 2022
• Evaluating management’s controls designed to prevent and detect
10 Queen Street Place, London, EC4R 1AG
irregularities;
• Identifying and testing journals, in particular journal entries
posted with large values, round sum values, significant impact on
profit, dated ahead of the date which they were posted and posted
to suspense accounts;
• Challenging assumptions and judgements made by management
in their critical accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we
will not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law
or regulation is removed from the events and transactions reflected
in the financial statements, as we will be less likely to become aware
87
D4t4 Solutions plc Annual Report and Accounts 2022 Group statement of comprehensive income
for the year ended 31 March 2022
Continuing operations
Revenue
Cost of sales
Gross profit
Administration expenses
Other operating income
Profit from operations
Finance income
Financing costs
Profit before tax
Tax
Notes
4,5
7
8
9
9
10
Attributable to equity holders of the parent
Earnings per share from continuing operations attributable to the equity holders of the parent
13
Statutory
Basic
Diluted
2022
£’000
2021
£’000
24, 459
(11,755)
12,704
(11,000)
58
1,762
22
(21)
1,763
(68)
1,695
22,792
(8,566)
14,226
(11,234)
58
3,050
25
(32)
3,043
(274)
2,769
4.21p
4.14p
6.88p
6.75p
Group statement of comprehensive income
for the year ended 31 March 2022
Attributable to equity holders of the parent
Other comprehensive income:
Items that will not be reclassified to profit or loss
Gains on property revaluation
Exchange differences on translation of foreign operations
Total comprehensive income for the year attributable to equity holders of the parent
The notes on pages 94 to 123 form part of these financial statements.
Notes
16
2022
£’000
1,695
2021
£’000
2,769
70
(21)
70
(11)
1,744
2,828
88
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Group statement of financial position
as at 31 March 2022
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax assets
Current assets
Trade and other receivables
Tax receivables
Inventories
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease obligations
Non-current liabilites
Lease obligations
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Revaluation reserve
Treasury shares
Retained earnings
Notes
14
15
16
11
18
19
20
21
21
11
22
22
24
25
23
Attributable to equity holders of the parent
These financial statements were approved by the Board of Directors and authorised for issue on 6 July 2022 and
were signed on its behalf by:
Bill Bruno
Director
Company registration number: 01892751 (England and Wales)
The notes on pages 94 to 123 form part of these financial statements.
2022
£’000
9,446
808
4,012
232 –
2021
£’000
8,696
872
4,141
14,498
13,709
27,385
13,362
573
–
11,430
39,388
53,886
414
129
14,241
28,146
41,855
(21,344)
(10,691)
(54)
(83)
(21,398)
(10,774)
(146)
(457)
(603)
(22,001)
31,885
809
3,365
6,031
1,310
(670)
21,040
31,885
(194)
(1)
(195)
(10,969)
30,886
808
3,365
5,981
1,240
(542)
20,034
30,886
89
D4t4 Solutions plc Annual Report and Accounts 2022
Group statement of changes in equity
for the year ended 31 March 2022
Share
capital
Share
premium
Merger
reserve
Revaluation Treasury
shares
reserve
Retained
earnings
Total
£’000
Notes
808
3,365
5,981
1,170
(340)
18,280
29,264
Balance at 1 April 2020
Dividends paid
Purchase of own shares
Issue of new shares - exercise of share options
Settlement of share-based payments
Share-based payment charge
Transactions with equity holders
Profit for the year
Other comprehensive income
Total comprehensive income
Balance at 1 April 2021
Dividends paid
Purchase of own shares
12
23
22
27
12
23
Issue of new shares - exercise of share options 22, 24
Settlement of share-based payments
Share-based payment charge
27
Transactions with equity holders
Profit for the year
Other comprehensive income
Total comprehensive income
Balance at 31 March 2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
70
70
–
(1,090)
(1,090)
(868)
–
666
–
–
–
(262)
276
(868)
–
404
276
(202)
(1,076)
(1,278)
–
–
–
2,769
2,769
61
131
2,830
2,900
808
3,365
5,981
1,240
(542)
20,034
30,886
–
–
1
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
50
–
–
50
–
–
–
–
–
–
–
–
–
–
70
70
–
(1,147)
(1,147)
(377)
–
249
–
(128)
–
–
–
–
–
(140)
619
(668)
(377)
51
109
619
(745)
1,695
1,695
(21)
49
1,674
1,744
809
3,365
6,031
1,310
(670)
21,126
31,885
The notes on pages 94 to 123 form part of these financial statements.
90
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Group statement of cash flow
for the year ended 31 March 2022
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
Increase in receivables
Decrease in inventories
Increase in payables
Cash (used in)/generated from operations
Tax received
Net cash (used in)/generated from operating activities
Investing activities
Interest received
Purchase of property, plant and equipment
Acquisition of subsidiary, net of cash acquired
Capitalisation of development costs
Net cash used in investing activities
Financing activities
Dividends paid
Lease repayments
Interest paid
Purchase of own shares
Exercise of share options
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Notes
2022
£’000
2021
£’000
1,763
3,043
391
306
(22)
21
619
–
(16)
3,062
(14,023)
129
10,671
(661)
1
(660)
22
(197)
(200) –
(242)
(617)
395
279
(25)
32
276
42
(8)
4,034
(3,225)
1,137
1,312
3,258
80
3,338
25
(34)
(195)
(204)
(1,147)
(1,090)
(98)
(21)
(377)
109
(1,534)
(2,811)
14,241
11,430
(79)
(32)
(868)
404
(1,665)
1,469
12,772
14,241
30
30
91
D4t4 Solutions plc Annual Report and Accounts 2022
Company statement of financial position
as at 31 March 2022
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investment in subsidiaries
Deferred tax assets
Current assets
Trade and other receivables
Tax receivables
Inventories
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease obligations
Non-current liabilites
Lease obligations
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Revaluation reserve
Treasury shares
Retained earnings
Attributable to equity holders of the parent
The Company’s profit for the year was £0.8m (2021: £2.0m).
Notes
14
15
16
17
11
18
19
20
21
21
11
22
22
24
25
23
2022
£’000
8,696
808
3,996
1,023
232 –
2021
£’000
8,696
872
4,100
273
14,755
13,941
25,754
322
– 4
11,387
37,463
52,218
13,835
414
14,133
28,386
42,327
(20,335)
(11,193)
(48)
(45)
(20,383)
(11,238)
(145)
(457)
(602)
(20,985)
31,233
809
3,365
6,031
1,310
(670)
20,388
31,233
(191)
(34)
(225)
(11,463)
30,864
808
3,365
5,981
1,240
(542)
20,012
30,864
These financial statements were approved by the Board of Directors and authorised for issue on 6 July 2022 and
were signed on its behalf by:
Bill Bruno
Director
Company registration number: 01892751 (England and Wales)
92
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Company statement of changes in equity
for the year ended 31 March 2022
Share
capital
Share
premium
Merger
reserve
Revaluation
reserve
Own
shares
Retained
earnings
Total
£’000
Notes
808
3,365
5,981
1,170
(340)
19,117
30,101
Balance at 1 April 2020
Dividends paid
Purchase of own shares
Issue of new shares - exercise of share options
Settlement of share-based payments
Share-based payment charge
Deferred tax on outstanding share options
Transactions with equity holders
Profit for the year
Other comprehensive income
Total comprehensive income
Balance at 1 April 2021
Dividends paid
Purchase of own shares
12
23
22
27
11
12
23
Issue of new shares - exercise of share options 22, 24
Settlement of share-based payments
Share-based payment charge
27
Transactions with equity holders
Profit for the year
Other comprehensive income
Total comprehensive income
Balance at 31 March 2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
70
70
–
(1,090)
(1,090)
(868)
–
666
–
–
–
–
(262)
276
–
(868)
–
404
276
–
(202)
(1,076)
(1,278)
–
–
–
1,988
1,988
–
70
1,988
2,058
808
3,365
5,981
1,240
(542)
20,012
30,864
–
–
1
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
50
–
–
50
–
–
–
–
–
–
–
–
–
–
70
70
–
(1,147)
(1,147)
(377)
–
249
–
(128)
–
–
–
–
–
(140)
619
(668)
(377)
51
109
619
(745)
1,065
1,065
(21)
49
1,044
1,114
809
3,365
6,031
1,310
(670)
20,388
31,233
The notes on pages 94 to 123 form part of these financial statements.
93
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements
for the year ended 31 March 2022
1. General information
D4t4 Solutions plc is a public limited company incorporated and
The Directors have reviewed stress tests for future cashflows over
the 18 months to 30 September 2023 to ensure there are sufficient
domiciled in England and Wales and quoted on the AIM Market. There
financial resources, together with income from existing contracts with
is no ultimate controlling party.
a number of customers, to cover budgeted future cashflows.
Details of substantial shareholdings are shown in the Directors’ report
On this basis, the Directors have adopted the going concern basis in
on page 79.
preparing these accounts.
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 2022 were authorised and
issued by the Board of Directors on 6 July 2022 and the Consolidated
Statement of Financial Position was signed on the Board’s behalf by
Bill Bruno.
2. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance with
International Accounting Standards adopted by the Companies
Act 2006 applicable to companies reporting under International
Accounting Standards.
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
Adoption of new and revised standards
The only new accounting standard applied during the year is shown
below. There was no material impact to the accounts.
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest
Rate Benchmark Reform – Phase 2 (issued on 27 August 2020 and
effective for years commencing on or after from 1 January 2021)
Standards, amendments and interpretations to existing standards
that have not been early adopted by the Group:
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 March 2022 reporting periods
and have not been early adopted by the Group. These standards –
outlined below – are not expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable
future transactions.
• Amendments to IFRS 3 Business Combinations; IAS 16 Property,
Plant and Equipment; IAS 37 Provisions, Contingent Liabilities
and Contingent Assets; and Annual Improvements 2018-2020 (all
issued on 14 May 2020 and effective for years commencing on or
after 1 January 2022)
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries made up to the
reporting date.
factors likely to affect its future development, performance and
Investee companies are classified as subsidiaries where the Company
position and the risks and uncertainties are presented in the Strategic
has control, which is achieved where the Company has the power
Report on pages 2 to 49.
The Group and Company have considered these risks and
uncertainties along with any impact from the global economic
situation and any further impact of coronavirus.
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.
94
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022 The consolidated financial statements incorporate the results of
Acquisitions
business combinations using the acquisition method. In the statement
On the acquisition of a business, net fair values are attributed to
of financial position, the acquiree’s identifiable assets and liabilities
the identifiable assets and liabilities acquired. Where the cost of
are initially recognised at their fair values at acquisition date. The
acquisition exceeds this net fair value, the difference is treated as
results of acquired entities are included in the Consolidated Statement
purchased goodwill and capitalised in the Group Statement of
of Comprehensive Income from the date at which control is obtained
Financial Position in the year of acquisition. If a subsidiary’s assets
and are deconsolidated from the date control ceases.
are subsequently hived up into the parent then the corresponding
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
at the foot of the Company Statement of Financial Position and
Statement of Changes in Equity for the year.
Property, plant and equipment
amount of goodwill is capitalised in the Company Statement of
Financial Position.
Goodwill
Capitalised goodwill is shown in the Statement of Financial Position.
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
The carrying value of these assets is stated at cost or valuation, less
subject to being tested annually for impairment.
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
Goodwill has arisen on the acquisition of Speed-Trap Holdings Limited
and Prickly Cactus Limited.
and buildings were last valued professionally at 31 March 2018 but are
Investments in subsidiaries
reviewed by the Directors on an annual basis. The carrying values are
considered for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
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 Group makes provision for depreciation so that the cost
less estimated residual value of each asset is written off by equal
the investment.
instalments over its estimated useful economic life as follows:
Other intangible assets Intellectual Property Rights (IPR)
Buildings
- up to 35 years
Leasehold improvements
- up to 10 years
Fixtures and equipment
- up to 4 years
Motor vehicles
- up to 5 years
The directors have assessed that no impairment is required in the
current period.
Revaluation gains/losses are shown in the Statement of
Comprehensive Income and recognised in Other comprehensive
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 eight 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.
income. Where losses are greater than previously recognised gains,
Trade names
these are taken to the income statement.
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 ten years.
95
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
Impairment of intangibles is reviewed annually with reference to
Similarly, for translation of foreign operations, transactions are
future cash flows from the specific cash generating units to which the
recorded at an approximation of the exchange rate ruling in the period
intangible asset has been allocated.
of consolidation.
Inventory
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.
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 Other comprehensive income.
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 Other
comprehensive income.
Expenditure on the research phase is recognised as an expense when
Leases and Lease commitments
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;
Leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by
the Group. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the income statement
over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset’s useful
life and the lease term on a straight-line basis. Assets and liabilities
arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease
e. the availability of sufficient resources to complete the
payments:
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.
• fixed payments (including in-substance fixed payments), less any
lease incentives receivable
• variable lease payment that are based on an index or a rate
• amounts expected to be payable by the lessee under residual
value guarantees
The useful economic life of development costs capitalised is deemed
to be 8 years and capitalised costs are amortised over 8 years.
• the exercise price of a purchase option if the lessee is reasonably
certain to exercise that option, and
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.
• payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value
in a similar economic environment with similar terms and conditions.
96
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Right-of-use assets are measured at cost comprising the following:
Treasury shares
• the amount of the initial measurement of lease
• any lease payments made at or before the
• date less any lease incentives received • any initial direct costs, and
• restoration costs.
Payments associated with short-term leases and leases of low- value
assets are recognised on a straight-line basis as an expense in the
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.
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
income statement. Short-term leases are leases with a lease term of 12
represents the contributions payable to the scheme in respect of the
months or less.
accounting period.
Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions. The lease agreements do not
Taxation
impose any covenants, but leased assets may not be used as security
for borrowing purposes.
Dividends
Final dividend and special 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.
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
Interim and prior period dividends paid are included in the Statement
that it is probable that taxable profits will be available to utilise it. It is
of Changes in Equity.
Share-based payments
reviewed annually.
Revenue recognition
Periodically the Group offers share options to employees. The
Revenue is measured at the transaction price received or receivable
Group has conformed with the requirements of IFRS 2 “Share Based
from the sale of goods and services in the ordinary course of the
Payment” for share options issued after 7 November 2002 and
Group’s activities. Revenue is shown net of value added tax, rebates
unvested at 31 March 2022. Those options are measured at fair value
and discounts and after the elimination of intercompany transactions
(using the Black-Scholes model and management’s best estimates)
within the Group.
and are expensed on a straight-line basis over their vesting period.
Options with market-based performance conditions, such as Total
Shareholder Performance compared to a peer group of companies,
are fair valued using a Monte Carlo model and also 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.
The Group recognises revenue as it satisfies its performance obligations
by transferring contracted goods and services to its customers.
The principle revenue streams are described below:
Products – Own IP
D4t4 creates, authors, markets and sells software products within the
Celebrus family of products (e.g., CDP, FDP, and CDM).
The Group’s products are licensed predominantly on a term basis and
revenue is recognised on an annual basis for each year of that term, upon
delivery of the license(s) to the customer, for the whole year in the month
of sale or on each successive anniversary for multi-year contracts.
97
D4t4 Solutions plc Annual Report and Accounts 2022 Notes to the financial statements continued
for the year ended 31 March 2022
Perpetual licence revenue is recognised in full upon delivery as the
are evenly spread over the term of the hosting period. Therefore, a
company has no further obligations to the customer once the non-
proportion of the fees for hosting are recognised during the set-up phase,
refundable licences have been delivered. Any upgrade to the software
with the balance being recognised evenly over the term of the period.
on a perpetual basis will be supplied as part of an ongoing maintenance
contract that the customer may make. This maintenance contract is
covered under the ‘Support and maintenance’ section below.
Products – 3rd Party
Partnerships with third party organisations
The Company sells both directly to the customer and via partnerships.
The Company acts as principal in the sale to the partner. The partner
then uses the products and services purchased from the Company
D4t4 also provides services that are focused on delivering data
as part of their sale to their customer. The revenue will consist of a
management solutions using public and private cloud infrastructure
combination of licence, delivery and support and maintenance as
which is securely designed to ensure our clients can operationalise
defined in the revenue recognition policy above, and recognised as
data within their organisation.
defined in those sections.
D4t4 design and build performant platforms for critical business,
analytics, compliance, risk, marketing and artificial intelligence
applications. Customer Data Management platform solutions may
include both third-party hardware and software (as well as our own IP
software described above).
The revenue for each component of the product is recognised when
Initial and subsequent measurement of financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
other short-term deposits held by the Group with maturities of less
the full performance obligation has been satisfied. Typically, this is
than four months.
when the hardware is delivered to the customers designated premises,
and for the software upon delivery to the customer.
Delivery Services
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
For fixed-price delivery services work, revenue is recognised over time
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.
by comparing how much of the project has been completed versus total
expected time required and also with reference to the completion of
specific milestones. 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, revenue is recognised based on time
spent on a project at an agreed rate on a monthly basis.
Support and maintenance
Support and maintenance is typically of a recurring nature, over the
term of a license, and is made up of hosting, support services and
product maintenance.
For 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. This reflects the even nature of the Group’s
obligations to the customer over the duration of the agreement.
In the case of hosting, an amount of effort is required up front to
create the environment for hosting. Thereafter, the Group’s obligations
98
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022 Financial liabilities and equity
The probability of default and expected amounts recoverable are
Financial liabilities and equity instruments are classified according to
assessed using reasonable and supportable past and forward- looking
the substance of the contractual arrangements entered into. An equity
information that is available without undue cost or effort. The expected
instrument is any contract that evidences a residual interest in the
credit loss is a probability-weighted amount determined from a range
assets of the company after deducting all of its liabilities.
of outcomes and takes into account the time value of money.
Initial and subsequent measurement of financial liabilities
Trade and other receivables
Trade, Group and other payables
For trade receivables, expected credit losses are measured by applying
Trade, Group and other payables are initially measured at fair value,
an expected loss rate to the gross carrying amount. The expected loss
net of direct transaction costs and subsequently measured at
rate comprises the risk of a default occurring and the expected cash
amortised cost.
Equity instruments
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,
Equity instruments issued by the Company are recorded at fair value
expected credit losses are based on the assumption that repayment
on initial recognition net of transaction costs.
of the loan is demanded at the reporting date. If the subsidiary does
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 the income statement.
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.
Related party transactions
These are disclosed in note 29 of the financial statements.
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
A financial liability (or part thereof) is derecognised when the
during the year. However, the nature of estimations means that actual
obligation specified in the contract is discharged, cancelled or expires.
outcomes could differ from those estimates. These judgements are
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.
reviewed on an ongoing basis, and recognise revisions to accounting
estimates in the period in which the Directors revise the estimate and
in any future periods affected. It is considered that all judgements
have an element of estimation.
a. Judgements
Capitalisation of development costs
The Group is required by accounting rules to capitalise certain
development costs. However, the Group almost always expenses a
significant percentage of research and development in the period it
is incurred.
99
D4t4 Solutions plc Annual Report and Accounts 2022 Notes to the financial statements continued
for the year ended 31 March 2022
Internal activities are continually undertaken to enhance and
Directors. This review was based on the valuation per square foot
maintain our products in a bid to stay ahead of our competition.
of similar office buildings, as well as the valuation based on a rental
Whether this expenditure is an internally generated intangible asset
income and yield basis for the Group’s property. The result of the
requires management to make judgements, especially with respect
review was that the valuation as at 31 March 2022 was not materially
to whether the asset created will generate future economic benefit.
different to the carrying value.
This is a key judgement in this respect as the time between
development and any income can be considerable and often the
income-generating asset may have considerably evolved from the
asset originally created.
b. 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.
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 management team to
allocate resources to the segments and assess their performance.
Whilst having three product groups, the Group operates the business
as a single business with no separation into divisions or allocation
or people or assets to a particular division. The management team
is responsible for all three product groups with no individual having
responsibility for a particular product group. This is consistent with
the internal reporting for management purposes. Management does
Share-based compensation
however monitor revenues by revenue type.
Information is presented to the Board on the revenue analysis below:
• Product - Own IP
• Product - 3rd party
• Delivery services
• Support and maintenance
The revenue analysis set out below is consistent with that provided to
the Board of Directors.
Management believes that there will not be only one acceptable
choice for estimating the fair value of share based payment
arrangements. The judgements and estimates that management
apply in determination of the share-based compensation are detailed
further in note 27.
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 unit to which the goodwill has been allocated. This is
disclosed in note 14.
Lease accounting
Lease payment accounting rules require lease payments to be
discounted using the lessee’s incremental borrowing rate as required
by IFRS 16 “Leases”. The Group’s incremental borrowing rate has been
based on local commercial or bank loan rates. Therefore, the specific
cost of borrowing has been applied to each lease as this reflects the
different economic conditions within each geography and is therefore
more representative of the funding facilities available in those countries.
Valuation of freehold land and building
The valuation of freehold land and buildings is reviewed by the
Directors on an annual basis. During the year, no professional
valuation was undertaken, and so a review was undertaken by the
100
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022 Continuing oprations 2022
Products - Own IP
Products - 3rd party
Delivery services
Support and maintenance
Revenue
Major customers (partners) over 10% of revenue
Products - Own IP
Products - 3rd party
Delivery services
Support & maintenance
Total revenue
Group
2021
£’000
9,005
4,403
2,886
6,498
2022
£’000
6,137
7,001
4,194
7,127
24,459
22,792
2022
£’000
2022
£’000
2021
£’000
2021
£’000
Customer 1 Customer 2
Customer 1
Customer 2
2,086
7,001
2,337
2,538
13,962
1,577
–
17
1,159
2,753
3,682
3,775
769
2,764
10,990
1,154
–
–
1,663
2,817
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 2.
5. Revenue
Geographical information
United Kingdom
Rest of Europe
United States of America
Others
Group
2021
£’000
2,983
2,396
16,699
714
22,792
2022
£’000
3,962
2,421
16,859
1,217
24,459
The geographical revenue analysis is determined by the domicile of the external customer.
Non current assets, including Property, Plant & Equipment, Goodwill and Intangibles, are all located in the United Kingdom.
101
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
Analysis of revenue
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 & maintenance
Contract balances
Receivables included within Trade and other receivables
Contract assets
Contract liabilities
Group
2021
£’000
5,964
16,828
22,792
Group
2021
£’000
9,005
4,403
2,886
2022
£’000
5,548
18,911
24,459
2022
£’000
6,137
7,001
4,194
7,127
24,459
6,498
22,792
Group
2022
£’000
24,452
1,657
14,200
2021
£’000
10,165
2,554
6,288
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.
Contract liabilities relate to consideration received from customers in advance of work being completed.
Adjustments to profit before tax
Group
Profit before tax
Amortisation of intangible assets
Share-based payment
Net foreign exchange differences
Costs related to acquisition during the year
Restructuring costs
Adjusted profit before tax
102
2022
£’000
1,763
306
678
93
36 –
390
3,266
2021
£’000
3,043
279
318
746
58
4,444
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
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 and equipment (see note 16)
Gain on disposal of property, plant and equipment
Auditor’s remuneration
- for audit services (Group and Company, the Company fee is not separately quantifiable)
- for other services
Impairment of trade receivables
Operating leases
Net foreign exchange loss
Other expenses
Total cost of sales and administration expenses
2022
£’000
2021
£’000
12,036
11,393
306
1,743
2,049
279
913
1,192
391
(16)
375
85
–
85
–
–
93
8,117
22,755
395
(8)
387
57
–
57
–
–
746
6,025
19,800
7. Staff costs
The average number of employees (including directors) during the year was:
Number
Number
Number
Number
Group
Company
2022
2021
2022
2021
Product and support
Distribution
Administration
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Defined contribution costs
Share-based payments: equity settled
99
33
17
149
£’000
9,953
951
455
677
94
30
15
139
£’000
9,632
1,025
418
318
88
27
16
131
£’000
7,678
833
367
677
86
25
15
126
£’000
7,924
924
359
318
12,036
11,393
9,555
9,525
Included in staff costs is £242k (2021: £195k) which were not recognised through the statement of profit and loss, but rather capitalised and
form part of development costs.
103
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
Key management personnel consist of the Board of Directors and their remuneration (included in the totals above) was as follows:
Emoluments
Social security costs
Defined contribution costs
Share-based payments: equity settled
Group & Company
2022
£’000
1,315
129
38
537
2021
£’000
1,352
183
39
194
2,019
1,768
Details of Directors remuneration required by the Companies Act are set out in the audited information included in the Directors Remuneration
report on pages 74 to 78.
Other related party transactions including loans and dividends, involving Directors are disclosed in the Directors’ report on pages 79 to 82.
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
Other
Analysis of finance costs
Lease interest
Other
104
Group
2022
£’000
58
58
2021
£’000
58
58
Group
2022
£’000
2021
£’000
22
–
22
(20)
(1)
(21)
23
2
25
(24)
(8)
(32)
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
10. Taxation
Current UK tax
Foreign tax
Less: double taxation relief
Over provision in prior year
Deferred tax
- change in rate
- temporary differences
- US tax charge / (credit)
2022
£’000
–
67
–
(225)
(158)
55
138
33
226
2021
£’000
101
109
(3)
–
207
22
(196)
241
67
Corporation tax
68
274
The charge for the year can be reconciled to the reported profit as follows:
Profit before tax
UK corporation tax at 19% (2021:19%)
Research and development credit
Patent Box
Exercise of share options
Shore-based payments
Difference between writing-down allowances and depreciation
Amortisation of intangibles - ineligible
Other non-deductible expenses
Effect of different rates in other jurisdictions
Movement in US tax losses
Over provision in prior year
Effect of change in tax rates on deferred tax opening balance
Foreign tax charge - India
Foreign tax charge - USA
Double tax relief brought forward - India
Current year loss carried forward
Tax charge as above
1,763
335
(431)
–
(32)
131 –
3
183
33
(132)
33
(225)
55
9
58
–
48 -
68
3,043
578
(225)
(70)
(182)
24
(3)
(14)
–
38
–
22
60
49
(3)
274
105
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
11. Deferred tax
Other timing
differences
Equity Share based
payments
reserve
Tax losses
Intangibles
Total
£’000
£’000
£’000
£’000
£’000
£’000
Group
Balance at 1 April 2020
Recognised within the Statement of Changes in Equity
(Charge) / credit to income statement
Balance at 1 April 2021
(Charge) / credit to income statement
Balance at 31 March 2022
Company
Balance at 1 April 2020
Recognised within the Statement of Changes in Equity
(Charge) / credit to income statement
Balance at 1 April 2021
(Charge) / credit to income statement
Balance at 31 March 2022
Comprised of:
Deferred tax assets
Deferred tax liabilites
A deferred tax rate of 25% (2021: 19%) has been used.
(55)
–
10
(45)
(21)
(66)
(55)
–
10
(45)
(21)
(66)
–
–
–
–
–
–
–
–
–
–
–
–
10
–
166
176
53
229
10
–
166
176
53
229
273
–
(240)
33
(33)
–
–
–
–
–
–
–
(162)
–
(3)
(165)
(223)
(388)
66
–
(67)
(1)
(224)
(225)
(162)
(207)
–
(3)
(165)
(223)
(388)
–
173
(34)
(191)
(225)
232
(457)
(225)
The financial statements include a deferred tax asset of nil (2021: £33k) in respect of trading losses in the Group’s US subsidiary.
12. Dividends
Amounts recognised as distributions to equity holders
Final dividend for the year ended 31 March 2021 of 2.0p (for the year ended 31 March 2020: 1.9p) per share
Interim dividend for the year ended 31 March 2022 of 0.85p (31 March 2021: 0.81p) per share
2022
£’000
805
342
1,147
2021
£’000
765
325
1,090
There is a proposed final dividend for the year ended 31 March 2022 of 2.07p, and a special dividend of 12.50p
The proposed final dividend, and special dividend are subject to shareholders’ approval at the AGM and have not been included as a liability in these
financial statements.
106
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
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 the market price of the Company’s ordinary
shares at the year end.
Details of the adjusted earnings per share are set out below:
Profit attributable to owners of the parent
Amortisation of intangible assets
Share-based payment
Net foreign exchange differences
Costs related to acquisition during the year
Restructuring costs
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
Basic Earnings per share
Diluted Earnings per share
Adjusted Basic Earnings per share
Adjusted Diluted Earnings per share
2022
£’000
1,695
306
677
93
36
390
(284)
2,913
2022
No.
2021
£’000
2,769
279
318
746
–
58
(260)
3,910
2021
No.
40,240,799
40,235,856
725,221
771,396
40,966,020
41,007,252
2022
pence per
share
2021
pence per
share
4.21
4.14
7.24
7.11
6.88
6.75
9.72
9.54
107
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
14. Goodwill
Cost of goodwill
Balance at 1 April 2020 and 31 March 2021
Goodwill acquired on acquisition of subsidiary (see note 26)
Cost at 31 March 2022
Accumulated impairment charges
Balance at 1 April 2020, 31 March 2021 and 31 March 2022
Carrying amount at year end
Allocation of goodwill
Speed-Trap
Prickly Cactus (see note 26)
Balance at 1 April 2020 and 31 March 2021
Balance at 31 March 2022
Group
£’000
Company
£’000
10,952
750
10,608
–
11,702
10,608
2,256
9,446
1,912
8,696
8,696
749
8,696
9,446
8,696
–
8,696
8,696
Goodwill acquired in a business combination is allocated at acquisition to the cash-generating units (CGUs) that are expected to benefit from that
business combination.
Goodwill is not amortised but tested annually for impairment with the recoverable amount being determined from value in use calculations. The
key assumptions for the value in use calculations are those regarding the discount rate, growth rates, pre-tax cash flow and forecasts of income
and costs.
The Group assessed whether the carrying value of goodwill was supported by the discounted cash flow forecasts of the Group based on financial
forecasts approved by management covering a one-year period, taking into account both past performance and expectations for future market
developments.
Management estimates the discount rate using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to each separate business unit if applicable. The impairment charge was £nil (2021: £nil). The recoverable amount of the CGU is
determined from value in use calculations.
Key assumptions used for the value-in-use calculations
Value in use was determined by discounting future cash flows generated from the continuing use of the titles and was based on the following
most sensitive assumptions:
• cash flows for 2022/23 were projected based on the forecast for 2022/23, using the budget as a base and sensitising in light of the
current environment;
• forecasts based on current customer contracts and gross margins being achieved;
• cash flows for year ending 31 March 2023 were projected based on the Group forecast for that year based on the current economic
environment in respect of the global pandemic. For years ending 31 March 2024 onwards, cash flows were prepared using underlying growth
rates of 2% based on a conservative view;
• cash flows were discounted using the CGU’s pre-tax discount rate of 14.7% (2021: 11.6%).
108
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Based on the above sensitivity assumptions the calculations disclosed headroom against the carrying value of goodwill for the CGU.
Management carried out several sensitivity scenarios on the data. These were based on best estimates under the current economic environment
created by the global pandemic.
Sensitivity to changes in assumptions
The margins achieved are based on actual margins, the forecast revenues are based on budget for the current year and an ongoing 2% growth rate.
The discount rate is considered to be the variable with the maximum impact. Varying this by 20% would still allow the recoverable amount to
exceed the carrying value. Therefore management is confident in the assumptions used.
Management has considered the growth rates used in light of the global pandemic and macroeconomic conditions, and remains confident that
they are reasonable.
Management are satisfied that a reasonable change in the key assumptions used in assessing the recoverable amounts of the cash generating
unit would not give rise to the recoverable amount exceeding the carrying value.
15. Other intangible assets
Group and Company
Cost
Balance at 1 April 2020
Additions
Balance at 1 April 2021
Additions
Balance at 31 March 2022
Accumulated amortisation
Balance at 1 April 2020
Amortisation
Balance at 1 April 2021
Amortisation
Balance at 31 March 2022
Carrying amount
Balance at 1 April 2020
Balance at 31 March 2021
Balance at 31 March 2022
Development
costs
Iternally
generated IPR
Purchased
IPR
£’000
£’000
£’000
188
195
383
242
625
–
33
33
59
92
188
350
533
56
–
56
–
56
56
–
56
–
56
–
–
–
1,858
–
1,858
–
1,858
1,161
232
1,393
233
1,626
697
465
232
Trade
name
£’000
142
–
142
–
142
71
14
85
14
99
71
57
43
The amortisation charge for the year is booked to administration expenses.
Development Costs are amortised over 8 years.
The remaining amortisation period for the Purchased IPR is 1 year (2021: 2 years) and for the Trade name is 3 years (2021: 4 years).
Total
£’000
2,244
195
2,439
242
2,681
1,288
279
1,567
306
1,873
956
872
808
109
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
16. Property, plant and equipment
Group
Cost or valuation
Balance at 1 April 2020
Additions
Disposals
Balance at 1 April 2021
Additions
Disposals
Balance at 31 March 2022
Depreciation
Balance at 1 April 2020
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 1 April 2021
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 31 March 2022
Carrying amount
Balance at 1 April 2020
Balance at 31 March 2021
Balance at 31 March 2022
Allocation of depreciation charge
Cost of sales
Adminstration expenses
Charge for year
Tangible Assets held at valuation
Land &
buildings
Fixtures &
equipment
£’000
£’000
Motor
vehicles
£’000
Right of
use assets
£’000
3,300
–
–
3,300
–
–
3,300
–
70
(70)
–
–
70
(70)
–
–
3,300
3,300
3,300
1,907
34
(1)
1,940
197
(790)
1,347
1,129
241
–
–
1,370
229
–
(790)
809
778
570
538
111
–
(46)
65
–
(65)
–
90
10
–
(46)
54
6
–
(60)
–
21
11
–
–
334
–
334
–
–
334
–
74
–
–
74
86
–
–
160
–
260
174
2022
£’000
37
354
391
Total
£’000
5,318
368
(47)
5,639
197
(855)
4,981
1,219
395
(70)
(46)
1,498
391
(70)
(850)
969
4,099
4,141
4,012
2021
£’000
51
344
395
In respect of tangible assets held at valuation, the comparable carrying amount that would have been recognised if the assets had been carried
under the historical cost model are as follows:
Land & buildings
2022
£’000
1,753
2021
£’000
1,753
Included in land & buildings (valued in 2018) is freehold land at £1,230,000 (2021: £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 30.
110
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
Company
Cost or valuation
Balance at 1 April 2020
Additions
Disposals
Balance at 1 April 2021
Additions
Disposals
Balance at 31 March 2022
Depreciation
Balance at 1 April 2020
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 1 April 2021
Depreciation charge
Revaluation
Eliminated on disposals
Balance at 31 March 2022
Carrying amount
Balance at 1 April 2020
Balance at 31 March 2021
Balance at 31 March 2022
Land &
buildings
Fixtures &
equipment
£’000
£’000
Motor
vehicles
£’000
Right of
use assets
£’000
3,300
–
–
3,300
–
–
3,300
–
70
(70)
–
–
70
(70)
–
–
3,300
3,300
3,300
1,907
33
–
1,940
186
(790)
1,336
1,129
241
–
–
1,370
228
–
(790)
808
778
570
528
111
–
(46)
65
–
(65)
–
90
10
–
(46)
54
6
–
(60)
–
21
11
–
–
264
–
264
–
–
264
–
45
–
–
45
51
–
–
96
–
219
168
Total
£’000
5,318
297
(46)
5,569
186
(855)
4,900
1,219
365
(70)
(46)
1,469
355
(70)
(850)
904
4,099
4,100
3,996
111
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
17. Investment in subsidiaries
Cost of investment
Balance at 1 April 2021 and 1 April 2020
Additions in year (see Note 26)
Balance at 31 March 2022 and 31 March 2021
Accumulated provision for impairment
Balance at 1 April 2021 and 1 April 2020
Carrying amount at year end
IS Solutions Limited (formerly Celebrus Limited)†
Celebrus Technologies Limited*†
Chapter26 Limited†
D4t4 Solutions Inc§
D4t4 Solutions Pty Limited‡
Internet Service Solutions Limited†
Internet Systems Solutions Limited†
Internet Site Solutions Limited†
Magiq Limited*†
Prickly Cactus Limited
Speed-Trap Holdings Limited†
Company
2022
£’000
273
750 –
1,023
–
1,023
2021
£’000
273
273
–
273
Nature of business
Proportion of ownership of
ordinary shares
Country of
Incorporation
England & Wales
England & Wales
England & Wales
Dormant
Dormant
Dormant
USA
Software & services
Australia
Software & services
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
* Owned by Speed-Trap Holdings Limited
† Registered address - Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, TW16 7EF, UK
§ Registered address - 215 E Chatham Street, Suite 215, Cary, North Carolina 27511, USA
‡ Incorporated 12 January 2021. Registered address - Level 19, 207 Kent Street, Sydney, NSW 2000, Australia
All UK subsidiaries individually prepare and file their own financial statements.
The principal place of business is considered to be the registered address.
112
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
18. Trade and other receivables
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
Group
Company
2022
£’000
24,992
–
66
670
1,657
27,385
2,699
52
14
22,227
24,992
2021
£’000
10,165
–
48
595
2,554
13,362
7,070
126
2,099
870
10,165
2022
£’000
23,782
–
63
666
1,243
25,754
1,500
28
2
22,252
23,782
2021
£’000
9,553
1,096
40
592
2,554
13,835
6,458
126
2,099
870
9,553
The average credit period taken on sales of goods and services was 111 days (2021: 80 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% 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 Group 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.
113
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
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. During the year, no trade receivables were considered impaired (2021: none) and there was
a charge of £nil to the Income Statement as shown in Note 6 (2021: £nil).
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 30.
19. Inventories
Finished goods and goods for resale
There was no write-down in the recognised value of inventories (2021:nil).
Group
Company
2022
£’000
–
2021
£’000
129
2022
£’000
–
2021
£’000
4
20. Trade and other payables
Trade payables
Amounts owed to Group undertakings
Other taxes and social security
Other creditors
Contingent consideration
Accruals
Deferred income
Group
Company
2022
£’000
840
–
396
1,239
500
4,169
14,200
21,344
2021
£’000
1,450
–
274
36
–
2,643
6,288
10,691
2022
£’000
403
3,163
356
1,236
– –
1,565
13,612
20,335
2021
£’000
588
1932
242
36
2,216
6,179
11,193
There is no material difference between the fair value of payables and their carrying value.
Trade payables comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is
25 days (2021: 40 days). Their carrying value approximates to their fair value.
Contingent consideration relates to the acquisition of Prickly Cactus Limited as described in note 26.
114
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
21. Lease Liabilities
Lease obligations
Opening Balance
Additions during the period
Interest expense
Repaid during the year
Closing Balance
Repayable within one year
Repayable within more than one year
Group
Company
2022
£’000
200
200
2021
£’000
277
277
2022
£’000
193
193
2021
£’000
236
236
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
277
–
21
(98)
200
54
146
–
333
23
(79)
277
83
194
236
–
20
(63)
193
48
145
–
264
22
(50)
236
45
191
At 31 March 2022 there were no undrawn facilities (2021: nil).
The Group applied IFRS 16 Leases for the first time for the year commencing 1 April 2020.
22. Share capital
Ordinary shares of 2p each
Authorised
Issued and fully paid up
Balance at 1 April 2021
Issued during year
Balance at 31 March 2022
Share
capital
£’000
2022
Share
premium
£’000
Shares
Share
capital
£’000
2021
Share
premium
£’000
Shares
50,000,000
1,000
50,000,000
1,000
40,417,556
13,897
40,431,453
808
1
809
3,365
40,417,556
–
–
3,365
40,417,556
808
–
808
3,365
–
3,365
The Company issued 13,897 (2021: nil) Ordinary shares during the year which constituted part of the consideration to be paid for the acquisition
of Prickly Cactus Limited. These were issued in one tranche at a price of 359.8p. This increased the share premium account by nil (2021: nil).
Costs associated with the issue of new shares were nil (2021: less than £1k) and are recognised in professional fees.
115
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
23. Own shares
At the year end the Company held 224,932 (2021: 191,498) ordinary shares in Treasury, with fair value of £590,447 (2021: £579,281). Details of
purchases and sales are shown below.
Balance of own shares at 1 April 2020
Shares acquired into Treasury reserve
Shares sold out of Treasury reserve
Balance of own shares at 31 March 2021
Total consideration paid in ye 31 March 2021
Shares acquired into Treasury reserve
Shares sold out of Treasury reserve
Balance of own shares at 31 March 2022
Total consideration paid in ye 31 March 2022
Number of
own shares
Share price at point
of transaction in pence
159,133
335,032
(302,667)
191,498
120,934
(87,500)
224,932
219.27 - 285.00
230.00 - 285.00
260.00 - 340.00
295.00 - 340.00
£’000
868
(666)
868
377
(249)
377
In the Statement of Changes in Equity (page 90) 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.
24. Merger reserve
The merger reserve originally 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 in the year of £50k are a result of the issue of shares as
part consideration for the acquisition of Prickly Cactus Limited.
25. Revaluation reserve
This represents the gains on revaluation of the property in line with market valuations. The property was last professionally revalued as at March
2018. During the year, a valuation review was undertaken by the directors, as described on page 123. The gain on revaluation was £70k (2021:
£70k). This is a non-distributable reserve as it represents unrealised profits on the revalued assets.
26. Acquisition of Prickly Cactus Limited
On 2 August 2021, the Group acquired Prickly Cactus Limited (“Prickly Cactus”). Prickly Cactus provides digital transformation consulting to
companies across the globe and has had a strategic relationship with D4t4 for some time.
The Prickly Cactus team are experienced in product management and customer relationships, and have previously worked with several of D4t4’s
partners and customers. Within D4t4, they are focused on driving customer success in the key markets of Financial Services, Telecoms and
Insurance and building a stable of new Celebrus customers via partners and direct relationships.
The acquisition was part of D4t4’s investment in specialist resources to capitalise on the market opportunity for both its Celebrus Customer Data
Platform (CDP) and Fraud Data Platform (FDP). The addition of the Prickly Cactus team was to have a positive impact on the Group’s performance
in the coming periods.
116
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
The total consideration comprised an initial consideration of £0.25 million which was satisfied by £0.2 million in cash (funded from current cash
reserves) and by the allotment of 13,897 new ordinary shares of 2p each in D4t4 and an earn-out of up to approximately £0.5 million over the
period to 31 December 2023 tied to both existing customer growth and the acquisition of new customers for the CDP and FDP. The earn-out will
also be satisfied by a mixture of cash and shares at the Company’s election.
Details of the fair value of identifiable assets and liabilities acquired, and the purchase consideration are as follows:
Balance sheet
on acquisition
£’000
Fair value
adjustment
£’000
Fair value of assets
and liabilities acquired
£’000
Trade receivables and other assets
Net assets acquired
Amount settled and to be settled in cash and shares to the sellers
1
1
(1)
(1)
Total consideration
Goodwill
–
–
750
750
Prickly Cactus contributed £nil to Group revenues and £275,000 to Group loss between the date of acquisition and 31 March 2022.
27. Share-based payments
The Company has share option schemes for various 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 typically 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
Number of
Weighted average
Number of
Weighted average
share options
exercise price
share options
exercise price
2022
2021
1,026,342
191,113
(267,736)
(87,500)
862,219
57.65p
2.00p
–
124.12p
23.52p
733,833
595,176
–
(302,667)
1,026,342
134.01p
2.00p
–
133.34p
57.65p
Exercisable at year end
152,000
112.92p
119,750
120.02p
The weighted average share price at the exercise date of the exercised options was £3.364 (2021: £2.660). The weighted average contractual life of
the outstanding options was 8 years (2021: 9 years), exercisable in the range 2.00p to 205.00p.
87,500 share options were exercised in the year, by way of issue of shares from Treasury.
117
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
A summary of the option price ranges is as follows:
Exercisable price range
Number of share options
2022
2.00p
90.50p - 114.00p
205.00p
701,886
152,000
8,333
862,219
The Group recognised £6777k (2021: £318k) of expense related to equity-settled share-based payments in the year. This comprised £619k (2021:
£276k) as share-based payments and £58k (2021: £42k) as Ers NI.
The fair value of options granted during the year is determined by applying the Monte Carlo 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 models in respect of options granted this year are as follows:
Date of Grant
28-Oct-21
28-Oct-21
Model Type
Monte Carlo Black Scholes
Vesting Date
28-Oct-24
28-Oct-24
Number of
options granted
Share price at
date of grant
Exercise price
Option life in years
Risk-free rate
118,159
72,954
383.50p
383.50p
2.00p
10
0.61%
2.00p
10
0.61%
44.40%
Expected volatility
44.40%
Expected dividend
yield
0.00%
0.00%
Fair value of options
650.00p
382.00p
The inputs into the models of options previously granted which have contributed to the share based payment arising this year are:
Date of Grant
13-Aug-18
14-Jan-20
14-Jan-20
10-Aug-20
08-Jan-21
08-Jan-21
08-Jan-21
25-Jan-21
Model Type
Black Scholes Black Scholes Black Scholes Monte Carlo Monte Carlo Monte Carlo Monte Carlo Black Scholes
Vesting Date
01-Jul-21
14-Jan-22
14-Jan-23
09-Aug-23
15-Jul-22
15-Jul-23
15-Jul-24
10-Aug-23
166,666
8,333
8,333
362,976
59,400
59,400
59,400
54,000
205.00p
205.00p
10
3.25%
38.50%
1.17%
46.33p
205.00p
205.00p
10
3.25%
38.50%
1.17%
56.36p
302.5p
2.00p
10
0.01%
47.50%
302.5p
2.00p
10
0.01%
46.50%
302.5p
2.00p
10
0.01%
43.90%
302.5p
2.00p
10
0.01%
47.30%
0.00%
1.00%
1.00%
1.00%
392.00p
150.00p
151.00p
152.00p
302.5p
2.00p
10
0.01%
44.60%
0.00%
283.00p
Number of
options granted
Share price at
date of grant
Exercise price
Option life in years
Risk-free rate
149.00p
149.00p
3
3.18%
Expected volatility
40.90%
Expected dividend
yield
2.11%
Fair value of options
40.37p
118
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
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 lessor
Lease receipts recognised as an 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.
2022
£’000
58
2021
£’000
58
29. Related party transactions
During the year the Company undertook the following transactions with D4t4 Solutions Inc., a wholly owned US subsidiary:
Sales to D4t4 Solutions Inc.
Purchases from D4t4 Solutions Inc.
Management charge to cover services provided (from D4t4 Solutions plc to D4t4 Solutions Inc.)
Management charge to cover services provided (from D4t4 Solutions Inc. to D4t4 Solutions plc)
Interest charged on Intercompany loan (from D4t4 Solutions plc to D4t4 Solutions Inc.)
Payments made by D4t4 Solutions plc on behalf of D4t4 Solutions Inc.
2022
£’000
116
6,129
47
1,936
42
5,545
During the year the Company undertook the following transactions with D4t4 Solutions Pty Ltd, a wholly owned Australian subsidiary:
Management charge to cover services provided (from D4t4 Solutions Pty Ltd. to D4t4 Solutions plc)
Interest charged on Intercompany loan (from D4t4 Solutions plc to D4t4 Solutions Pty Ltd.)
Payments made by D4t4 Solutions plc on behalf of D4t4 Solutions Pty Ltd.
Details of any intercompany balances outstanding are shown in Notes 18 and 20.
2022
£’000
164
2
152
2021
£’000
1
3,837
30
2,481
67
5,517
2021
£’000
–
–
–
The Group incurred costs with CV & Background Check Limited, a business controlled by the wife of Peter Kear, a director of the Company
during the year and previous year. During that time, the Group made purchases of services totalling £9,000 (FY21: £6,000). At 31 March 2022, CV &
Background Check Limited was no longer a related party. The Group has assessed that the terms of these transactions took place at arm’s length.
At the end of the year, the Company entered into an arm’s length transaction with J Dodkins, who had served as a director in the year, relating to the
disposal of a vehicle. The Company had the asset valued at £13k and it was sold to J Dodkins for £13k. The Company had fully depreciated the asset
to £nil on the date of the transaction. The balance outstanding on this transaction at the year end is £13k and is included within Other Debtors.
Other than the payment of remuneration, there have been no related party transactions with the Directors.
119
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
30. 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 its 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 to 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 (2021: nil).
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
120
Group
Company
2022
£’000
11,430
11,430
2021
£’000
14,241
13,964
2022
£’000
11,387
11,387
2021
£’000
14,133
13,897
Group
Company
2022
£’000
11,430
26,715
2021
£’000
14,241
12,767
2022
£’000
11,387
25,088
2021
£’000
14,133
13,243
6,663
4,084
6,283
4,772
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
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.
Carrying amounts of the Group’s financial assets and liabilities denominated in foreign currencies was as follows:
Categories of financial instruments
US Dollars
- cash
- receivables
- payables
Euros
- cash
- receivables
- payables
Australian Dollars
- cash
- receivables
- payables
Liabilities
Assets
2022
£’000
–
–
437
–
–
29
–
–
2
2021
£’000
–
–
1,511
–
–
35
–
–
–
2022
£’000
1,115
24,224
–
86
36
–
– –
– –
– –
2021
£’000
530
8,903
–
178
36
–
The value of foreign currency hedge instruments outstanding at the year end was US$21,500,000 (2021: US$6,000,000).
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.
As at 31 March 2022
Impact on profit / equity for the year
As at 31 March 2021
Impact on profit / equity for the year
USD $
£’000
(1,226)
(377)
€
£’000
AUD $
£’000
(4)
(9)
–
–
Total
£’000
(1,230)
(386)
121
D4t4 Solutions plc Annual Report and Accounts 2022
Notes to the financial statements continued
for the year ended 31 March 2022
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.
As at 31 March 2022
Impact on profit / equity for the year
Aa at 31 March 2021
Impact on profit / equity for the year
USD $
£’000
1,226
417
€
£’000
AUD $
£’000
5
9
–
–
Total
£’000
1,271
426
Credit risk management
The Group uses credit reference agencies to determine and monitor the credit limits of new and existing customers. At the end of the year
partners owed a total of £22.334m (2021: two partners owed £9.020m) and no expected credit loss provision has been made in relation to this
balance (2021: nil). 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 2022 (2021: 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:
In less than one year:
Trade payables
Amounts owed to Group undertakings
Other creditors
Accruals
122
Group
Company
2022
£’000
840
–
1,239
4,584
6,663
2021
£’000
1,450
–
36
2,598
4,084
2022
£’000
403
3,163
1,236
1,481
6,283
2021
£’000
2,055
465
36
2,171
4,772
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022
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 there were no borrowings 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 2022.
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 Directors have considered the impact of Covid-19 and the global economic situation whether they have had any impact on the value of the
land and buildings of the Group. In their opinion, the property has not suffered any reduction in value on account of it’s accessibility, location
and the internal refurbishment works which commenced three years ago and which were not therefore not fully incorporated into the 2018
revaluation. The building is also considered to be suitably arranged internally such that any modifications required to the workplace in order to
allow for safe working in light of the Covid 19 pandemic can be readily implemented.
The fair value of the freehold land and buildings were determined based on two tests. Firstly, a market approach based on three properties
of broadly similar size available for purchase in the same area, and secondly a yield-based valuation based on the current rental value of one
quarter of the property which is currently available for let, divided by the average yield for office buildings in the area. Both tests indicated that
the current carrying value of the property was still appropriate as at 31 March 2022.
The Directors are satisfied that the assumptions applied in the professional valuation at 31 March 2018 are still valid at 31 March 2022, and as
such have revalued the land and buildings in line with the 2018 valuation.
123
D4t4 Solutions plc Annual Report and Accounts 2022
Shareholder information
REGISTRAR
SLC Registrars Limited
Highdown House
Yeoman Way
Worthing
West Sussex, BN99 3HH
NOMINATED ADVISOR
AND JOINT BROKER
finnCap
1 Bartholomew Close
London, EC1A 7BL
JOINT BROKER
Canaccord Genuity Limited
88 Wood Street
London, EC2V 7QR
BANK
HSBC Bank plc
54 Clarence Street
Kingston Upon Thames
Surrey, KT1 1NS
SOLICITOR
Shakespeare Martineau LLP
1 Colmore Square
Birmingham, B4 6AA
AUDITOR
Haysmacintyre LLP
10 Queen Street Place
London, EC4R 1AG
OFFICES
UK HQ and Registered office
D4t4 Solutions plc
Windmill House
91-93 Windmill Road
Sunbury-on-Thames, TW16 7EF
US office
D4t4 Solutions Inc.
215 E Chatham Street
Suite 115
Cary
North Carolina 27511, USA
India office
D4t4 Solutions plc
First Floor, RR Tower IV
T.V.K. Industrial Estate
Guindy, Chennai – 600 032
Tamil Nadu, India
COMPANY REGISTERED NUMBER
01892751
124
FINANCIAL STATEMENTSD4t4 Solutions plc Annual Report and Accounts 2022