TRIAD GROUP PLC
Annual Report and Accounts
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/
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Godalming office:
Weyside Park
Catteshall Lane
Godalming
Surrey GU7 1XE
01483 860222
Milton Keynes office:
37 Sunningdale House
Caldecotte Lake Business Park
Milton Keynes MK7 8LF
01908 278450
triad.co.uk
Table of contents
Triad Group Plc | Annual report for the year ended 31 March 2015
02
07
10
14
19
22
Strategic report
Directors’ report
Corporate governance report
Directors’ remuneration report
Independent auditors’ report to
the members of Triad Group Plc
24
25
26
43
44
Statements of financial position
Statements of cash flows
Notes to the financial statements
Five year record
Shareholders’ information and
financial calendar
Statements of comprehensive
income and expense
45 Corporate information
23 Statements of changes in equity
Triad Group Plc Annual Report and Accounts 2015 | 01
Strategic Report
Financial highlights
• Revenue for the year ended 31 March 2015: £23.5m
(2014: £19.7m)
• Profit from operations: £0.46m (2014: £0.13m)
• Earnings before interest, tax, depreciation and amortisation
(EBITDA): £0.54m (2014: £0.20m)
• Profit after tax: £0.35m (2014: £0.01m)
• Gross profit as a percentage of revenue: 14.1%
(2014: 14.5%)
Chairman’s statement
Dr John Rigg, Executive Chairman
The Group’s results for the financial year ended 31 March
2015 demonstrate the significant progress made in all areas
of the business, and represent our strongest performance for
over 10 years. These years have been a particularly difficult
period for small and medium sized enterprises (SME’s), and
it is a testament to the resilience of the Group and its staff
that Triad has survived and is now looking forward to better
times ahead. The improvement in results has been achieved
by the effort and determination of Triad’s management and
staff to build a more focused and robust business, with Triad
teams winning and retaining projects across a wide range of
Government departments, as well as in a number of major
private sector accounts.
The unified business model introduced last year has
created real traction during the period, particularly in the
public sector. Triad’s presence on the G-Cloud and Digital
Services frameworks has enabled it to engage directly with
new and existing clients to provide a broad spectrum of
services including consultancy, business analysis, software
development and coaching.
Significant successes have been around the provision of
staff to support projects aligned to the Government’s Digital
agenda, with central government clients including Ministry
of Justice, Home Office and Cabinet Office. New clients
included Welsh Government, Companies House and Central &
North West London NHS Trust.
We were also very proud to have been able to support the Roll
of Honour at the Tower of London in our role as IT Solutions
Partner, playing a small part in the remembrance celebrations
in 2014. Elsewhere, we supported the National Trust in its own
commemoration activities, with our geospatial platform Zubed
being used to display locations of the Trust’s war memorials.
02 | Triad Group Plc Annual Report and Accounts 2015
In the private sector, Triad continued to provide consultancy,
development and resourcing services to a wide range of clients.
We supplied a team of consultants to help a leading energy
management provider redevelop its energy management
portal which is used by major players in the energy sector.
We also developed a platform to improve collaboration and
work-winning for one of the world’s foremost automotive
consultancy firms. We continued to excel as a Tier 1 supplier of
IT resources to one of the world’s largest banks.
Revenue and operating profit have increased across the
Group. Whilst we have been determined in our efforts to
drive margin upwards, a significant source of revenue growth
was with one particular account that has been operating at
a fixed, lower margin. This had the effect of diluting margin
improvements elsewhere, although progress was made on
this front in the last quarter of the period.
Improvement in a number of areas has driven the positive
performance in the Group. A concerted attempt to raise the
profile of the Group by promoting the facilities of G-Cloud and
Digital Services frameworks has helped to win more business
in the public sector. A more joined-up business has facilitated
the introduction of new areas of expertise to our clients, using
our resourcing capability to develop centres of excellence
around skillsets such as DevOps and User Experience.
Our focus on value and productivity has given clients the
confidence to extend and renew contracts, helping to improve
consultant utilisation rates in the process. Our agility as an
SME, combined with our heritage and experience of 27 years,
has allowed the Group to operate very responsively, setting
a standard that our clients have used as the benchmark
for other suppliers to achieve. The Group has worked very
successfully in multi-supplier environments, with numerous
examples of effective collaboration with suppliers both large
and small.
Board Appointment
The Board was strengthened in March 2015 with the
appointment of Adrian Leer as Executive Commercial Director.
Adrian has been with the Group for a number of years, and his
appointment reflects Triad’s commitment to organic growth.
Segmental Reporting
In practice, the group no longer operates on a segmental
basis. There is one management team. Opportunities are
developed centrally, and resourced according to client needs.
Efforts to create a single, seamless business have been
successful to the point where the separation of the business
into two segments for reporting purposes no longer makes
sense. Reporting for the next and subsequent periods will be
non-segmental.
Strategic Report
Outlook
A key focus going forward will be on efficiency and driving
profit. Recruitment of talented staff is essential to this
objective, particularly around the consultancy practice where
a number of positions in the previous reporting period have
been occupied by temporary staff.
The Group expects to improve its work-winning rate in
Government, exploiting further the major frameworks, and
utilising opportunities with key partners. The Group’s track record
of building solutions that generate efficiencies places Triad in a
strong position to help deliver the new Government’s agenda.
Following a small number of successes in the NHS and Health
sector generally, the Group plans to increase its presence in
this area and capitalise on opportunities afforded by a more
localised approach to investment.
The Group expects to see more investment in the private
sector too, with increasing economic confidence and an
emphasis on productivity and innovation.
Employees
Principal objectives
The principal objectives of the Company are to;
• Provide clients with industry leading service in our core
skills.
• Achieve sustainable profitable growth across the business
and increase long term shareholder value.
The key elements of our strategy to achieve our objectives are;
To provide a range of specialist services relevant to our
clients business
• Our services include consultancy, change leadership,
project delivery, software development, mobility services
and business insights. Further capacity and expertise is
provided via our resourcing services.
• We continue to adopt a “business first, technology second”
approach to solving our clients’ problems. A cornerstone
of our service offer is our consultancy model, offering
advice and guidance to clients in terms of technology
investments.
On behalf of the Board I would like to thank all our staff for
their efforts during the past year.
To develop long term client relationships across a broad
client base
• Enduring client relationships fuel profitability. A hallmark of
our recent improvements has been the frequency of repeat
business, which itself has been a function of outstanding
delivery and proactive business development within existing
accounts.
• Our consistent track record in this regard is our major asset
when developing propositions for new clients, along with
the use of case studies and references.
• We have structured our service offering to enable clients
to engage early, thus enabling the building of trust and
confidence from the outset.
To work with partners
• Our strategy includes working with carefully chosen
partners operating under their client frameworks in addition
to the frameworks on which Triad is listed. This will expose
more opportunities whilst reducing the cost of sale.
John Rigg
Chairman
10 June 2015
Organisation overview
Triad Group Plc is engaged in the provision of IT resourcing,
consultancy and solutions services to the public and
private sectors. For the year to 31 March 2015 the Group
consisted of two operating segments, Triad Resourcing and
Triad Consulting & Solutions. From 1 April 2015 the Group
will consist of one operating segment as explained in the
Chairman’s Statement above.
Triad Group Plc Annual Report and Accounts 2015 | 03
Strategic Report
To leverage group capability and efficiency to increase
profitability
• We continue to develop synergies across the Group’s
activities both externally and internally, driving better
outcomes for clients whilst improving efficiency and
effectiveness. The management team sets objectives to
ensure that these synergies are exploited.
• We enable our clients to benefit from access to a full
range of ICT services, delivered through a single, easy
to access, point of sale. Our resourcing team provides
rapid, scalable capacity and skills to our consultancy and
development projects as demand dictates. Our consultants
offer expertise and experience to our resourcing team as
increasingly complex technical requirements emerge from
our clients.
• We will continue to strive to provide the highest quality
of service through the provision of niche resources using
market experts, and the supply of IT services though our
team of skilled consultants.
• We will strengthen our pipeline of work through the
development of fulfilling and productive client relationships.
Business model
The Group provides services to the public and private sectors
in the areas of IT resourcing (both contract and permanent),
and the provision of IT consultancy and solutions services,
including location intelligence services. For the year ended 31
March 2015 the Group consists of two operating segments,
Triad Resourcing and Triad Consulting & Solutions, both
operating in the United Kingdom from offices in Milton Keynes
and Godalming.
The resourcing business:
• Earns fees from the provision of independent contractors
on a time hire basis to clients. Contractors are paid on the
same basis at a lower rate. The difference in client and
contractor fee rates generates gross profit.
• Sources and selects candidates for permanent positions
with clients. A fee is earned from our client when they
successfully recruit a candidate.
The consultancy and solutions business earns fees from
charging the time of its employees to clients or delivering
projects to clients. In addition some income is earned from
licensing software that we have developed.
04 | Triad Group Plc Annual Report and Accounts 2015
From 1 April 2015 the Group will no longer be reporting
segmental results. This is to reflect the Group’s operating
model and management’s reporting and decision making
processes as explained in the Chairman’s Statement above.
Principal risks and uncertainties
As with any business in the UK IT services market the Group
faces a number of principal risks and uncertainties.
These are summarised as follows:
IT services market
The demand for IT services is affected by UK market
conditions. The continual development of the Group’s
business into new niches and sectors is important in
protecting the Group from fluctuations in market conditions.
Revenue visibility
The pipeline of contracted orders for time and materials
consultancy work is relatively short. The Board carefully
reviews forecasts to assess the level of risk arising from
business that is forecast to be won.
Availability of staff
The ability to recruit and retain staff, and access to a large,
appropriately skilled contractor resource are key to ensuring
the ability to win and deliver IT services to our clients. The
Group continues actively to recruit quality individuals, and
ensures the contractor database is constantly updated and
expanded.
Offshore competition
Offshore IT service companies, particularly those located
in Asia and Eastern Europe, continue to exert downward
pressure on fee rates. The Group continues to develop niche
markets and focus on delivering effective solutions where
close collaboration with the client is required.
Performance assessment, financial review
and outlook
Financial and non-financial key performance indicators
(KPIs) used by the Board to monitor progress are revenue,
profit from operations, gross margin, net borrowings and
headcount. Financial KPIs are discussed in more detail in the
Financial Review below.
Strategic Report
The KPIs are as follows;
Revenue
£23,482,000
£19,702,000
Profit from operations
£462,000
£125,000
2015
2014
£543,000
£200,000
Earnings before interest, tax,
depreciation and amortisation
(EBITDA)
Gross margin
Average headcount
Emission source:
Combustion of fuel
Electricity and heat purchased
for own use
14.1%
14.5%
Total
52
57
tCO2e per £1m revenue
2015
tCO2e*
2014
tCO2e*
25
109
134
5.7
41
86
127
6.4
*The calculation of tCO2e for each source has been prepared in
accordance with DEFRA guidelines for GHG reporting.
Financial review
Group performance
The Group reports significantly improved operating
performance for the financial year ended 31 March 2015.
Group revenue has increased to £23.5m (2014: £19.7m)
further to an increase in contractor numbers in the Resourcing
business and improved utilisation the Consulting business.
The Group reports an increase in profit from operations
to £0.46m (2014: £0.13m). Earnings before interest, tax,
depreciation and amortisation (EBITDA) is £0.54m (2014:
£0.20m). The Group reports a profit after tax of £0.35m (2014:
£0.01m).
Gross margin has decreased slightly to 14.1% (2014: 14.5%).
This is as a result of a higher proportion of Resourcing
business being conducted at lower margins when compared
to last year. Utilisation in the Consulting business has also
improved further to securing longer term client engagements.
Cash and cash equivalents at the year-end have increased to
£390,000 (2014: £4,000).
Operating segments
The Group presents its results across two segments,
Resourcing and Consulting & Solutions.
Corporate social responsibility
Our employees
The Group is committed to equal opportunities and operates
employment policies which are designed to attract, retain and
motivate high quality staff, regardless of sex, age, race, religion
or disability. The Group has a policy of supporting staff in long
term career development.
The Group recognises the importance of having effective
communication and consultation with, and of providing
leadership to, all its employees, who are critical to its
future success. The Group promotes the involvement of its
employees in understanding the aims and performance of the
business.
The following table shows the number of persons, by gender,
who at 31 March 2015 were directors, senior managers or
employees of the Company.
Directors
Senior managers
Employees
Male
Female
Total
5
1
36
42
-
1
14
15
5
2
50
57
Environment and greenhouse gas reporting
The Group is committed to ensuring that the actual and
potential environmental impact of its activities is understood
and managed effectively.
The annual quantity of Greenhouse Gas (GHG) Emissions for
the period 1 April 2014 to 31 March 2015 in tonnes of carbon
dioxide equivalents (tCO2e) is shown in the table below.
Triad Group Plc Annual Report and Accounts 2015 | 05
Strategic Report
Revenue for the financial year to 31 March 2015 in the
Resourcing business has increased to £19.8m (2014:
£17.0m). This increase is as a result of growth in long
standing, but lower margin, key accounts together with the
development of significant new accounts, particularly in the
public sector where Triad teams consisting of both contractors
and consultants are able to support a wider range of projects,
offering clients rapid access to specialist skills. The segment
reports a profit from operations of £0.4m (2014: £0.3m).
Whilst this represents a solid performance the average gross
margin percentage has been impacted by the relative increase
in lower margin business offsetting higher margins being
achieved elsewhere.
Revenue in the Consulting & Solutions segment has increased
to £3.6m (2014: £2.7m). Included in this figure is revenue
attributable to subcontractors where partner organisations
have been used to provide specialist services. During the
year, the amount paid to such organisations has increased to
£0.74m (2014: £0.13m).
The return of the Consulting business to profit marks a
significant achievement with the segment reporting a profit
from operations of £0.1m (2014: £0.2m loss). Consultant
utilisation has remained high throughout the year and day
rates have held up well.
Overheads
Administrative expenses for the year are £2.8m (2014: £2.7m).
Staff costs are unchanged at £3.4m (2014: £3.4m). The
average headcount for the year has reduced to 52 (2014: 57).
Cash flows
Cash and cash equivalents at 31 March 2015 stood at
£390,000 (2014: £4,000). There was a net cash inflow from
operating activities of £498,000 (2014: £320,000 outflow). The
net cash outflow from investing activities was £107,000 (2014:
£14,000).
Tangible assets
Tangible assets were purchased totalling £97,000
(2014: £20,000). This primarily relates to the fitting out
of a replacement office in Milton Keynes and associated
equipment.
Intangible assets
Amortisation relating to the internally developed software,
Zubed was £0.03m (2014: £0.03m). There were no
development costs capitalised during the year (2014: £nil).
Net assets
The net asset position of the Group at 31 March 2015 was
£839,000 (2014: £479,000). The increase over the year was
due to the profit for the year.
Share options
405,000 options were granted during the year. An expense
of £8,000 has been recognised in the year relating to options
granted in September 2011 and September 2014.
Outlook
Key to the advances made this year is that the Group’s
operations are being driven forward as one business, no
longer being run as two separate operating segments. The
business model now being adopted by the Group is able to
support steady growth in headcount in both contract resource
and permanent headcount. This is reflected in the reporting
to senior management and operating decisions subsequently
made. Consequently, from the start of the new financial year,
Triad will no longer be reporting its results across the current
operating segments. This will enable management to focus on
driving efficiency and achieving improved profitability.
By order of the Board
NE Burrows
Finance Director
10 June 2015
06 | Triad Group Plc Annual Report and Accounts 2015
Directors’ Report
The Directors present their Annual Report on the activities of
the Group, together with the financial statements for the year
ended 31 March 2015. The Board confirms that these, taken as
a whole, are fair, balanced and understandable, and that they
provide the information necessary for shareholders to assess
the company’s position and performance, business model
and strategy, and that the narrative sections of the report are
consistent with the financial statements and accurately reflect
the Group’s performance and financial position.
The Strategic Report provides information relating to the
Group’s activities, its business and strategy and the principal
risks and uncertainties faced by the business, including analysis
using financial and other KPIs where necessary. These sections,
together with the Directors’ Remuneration and Corporate
Governance Reports, provide an overview of the Group,
including environmental and employee matters and give an
indication of future developments in the Group’s business, so
providing a balanced assessment of the Group’s position and
prospects, in accordance with the latest narrative reporting
requirements. The Group’s principal subsidiary undertakings are
disclosed in the notes to the financial statements.
Corporate Governance disclosures required with the Directors’
Report have been included within our Corporate Governance
Report beginning on page 10.
Share capital and substantial shareholdings
Share capital
As at 31 March 2015, the Company’s issued share capital
comprised a single class of shares referred to as ordinary
shares. Details of the ordinary share capital can be found in
note 19 to these financial statements.
Voting rights
The Group’s articles provide that on a show of hands at a
general meeting of the Company every member who (being
an individual) is present in person and entitled to vote shall
have one vote and on a poll, every member who is present in
person or by proxy shall have one vote for every share held.
The notice of the Annual General Meeting specifies deadlines
for exercising voting rights and appointing a proxy or proxies
to vote in relation to resolutions to be passed at the Annual
General Meeting.
Transfer of shares
There are no restrictions on the transfer of ordinary shares in
the Company other than as contained in the Articles:
• The Board may, in its absolute discretion, and without
giving any reason for its decision, refuse to register any
transfer of a share which is not fully paid up (but not so
as to prevent dealing in listed shares from taking place)
and on which the Company has a lien. The Board may
also refuse to register any transfer unless it is in respect
of only one class of shares, in favour of no more than
four transferees, lodged at the Registered office, or such
other place as the Board may decide, for registration,
accompanied by a certificate for the shares to be
transferred (except where the shares are registered in the
name of a market nominee and no certificate has been
issued for them) and such other evidence as the Board
may reasonably require to prove the title of the intending
transferor or his right to transfer the shares.
Certain restrictions may from time to time be imposed by laws
and regulations, for example:
• Insider trading laws; and
• The Listing Rules of the Financial Conduct Authority
whereby certain employees of the Group require the
approval of the Company to deal in the Company’s ordinary
shares.
Appointment and replacement of directors
The Board may appoint Directors. Any Directors so appointed
shall retire from office at the next Annual General Meeting of
the Company, but shall then be eligible for re-appointment.
The current Articles require that at the Annual General
Meeting one third of the Directors shall retire from office but
shall be eligible for re-appointment. The Directors to retire
by rotation at each Annual General Meeting shall include
any Director who wishes to retire and not offer himself for
re-election and otherwise shall be the Directors who, at the
date of the meeting, have been longest in office since their last
appointment or re-appointment.
A Director may be removed from office by the service of a
notice to that effect signed by at least three quarters of all the
other Directors.
Triad Group Plc Annual Report and Accounts 2015 | 07
Directors’ Report
Amendment of the Company’s Articles of Association
Disclosure of information to auditors
All of the current Directors have taken all the steps that
they ought to have taken to make themselves aware of
any information needed by the Company’s auditors for the
purposes of their audit and to establish that the auditors are
aware of that information. The directors are not aware of any
relevant audit information of which the auditors are unaware.
Forward-looking statements
The Strategic Report contains forward-looking statements.
Due to the inherent uncertainties, including both economic
and business risk factors, underlying such forward-looking
information, the actual results of operations, financial position
and liquidity may differ materially from those expressed or
implied by these forward-looking statements.
Going concern
The Group’s business activities, together with the factors likely
to affect its future development, performance and position,
are set out in the Strategic Report. The financial position of
the Group, its cash flows, liquidity position and borrowing
facilities are described in the Strategic Report, and in note
17 to the financial statements. In addition note 3 to the
financial statements includes the Group’s objectives, policies
and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and
hedging activities, and its exposure to credit risk and liquidity
risk. As highlighted in note 17 to the financial statements,
the Group meets its day to day working capital requirements
through an invoice finance facility.
The Group’s projections, taking account of reasonably
possible changes in trading performance, show that the
Group should be able to operate within the level of its current
facility. The facility may be terminated by either party with
one month’s written notice. The Board receives regular cash
flow and working capital projections to enable it to monitor
its available headroom under this facility. These projections
indicate that the Group expects to have sufficient resources to
meet its reasonably expected obligations. The bank has not
drawn to the attention of the Group any matters to suggest
that this facility will not be continued on acceptable terms.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
The Company’s Articles may only be amended by a special
resolution passed at a general meeting of shareholders.
Substantial shareholdings
In addition to the disclosure on page 17 of the interests of
Directors who held office at the end of the financial year, the
Company is aware of the following holdings of 3% or more of
the share capital of the Company at 31 March 2015 and no
changes have been disclosed to the Company between this
date and 1 June 2015:
M Makar
Liontrust Investment Services Ltd
The Chatham Trust
Percentage of issued
share capital
29.76%
9.61%
4.46%
Dividends
The Directors have neither declared an interim dividend nor do
they recommend that a final dividend be paid in respect of the
year ended 31 March 2015 (2014: nil per 1p ordinary share).
Financial instruments
The Board reviews and agrees policies for managing financial
risk. These policies, together with an analysis of the Group’s
exposure to financial risks are summarised in note 3 of these
financial statements.
Research and development activity
Research and development activities are undertaken with
the prospect of gaining new technical knowledge and
understanding, and developing new software.
Directors’ interests in contracts
Directors’ interests in contracts are shown in note 22 to the
accounts.
Directors’ insurance and indemnities
The Company maintains directors’ and officers’ liability
insurance which gives appropriate cover for any legal action
brought against its directors and officers. The directors also
have the benefit of the indemnity provisions contained in the
Company’s Articles of Association. These provisions, which
are qualifying third-party indemnity provisions as defined
by Section 236 of the Companies Act 2006, were in force
throughout the year and are currently in force.
08 | Triad Group Plc Annual Report and Accounts 2015
Directors’ Report
Auditors
BDO LLP have indicated their willingness to continue in office.
Accordingly, a resolution to reappoint BDO LLP as auditors
of the Company will be proposed at the next Annual General
Meeting.
Environment and greenhouse gas reporting
Carbon dioxide emissions data, is contained in the Corporate
Social Responsibility section of the Strategic Report, due to its
strategic importance.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors are required to prepare the Group financial
statements and have elected to prepare the Company
financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union. 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
Company and of the profit or loss for the Group and Company
for that period.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any
material departures disclosed and explained in the financial
statements;
• prepare a Directors’ Report, Strategic Report and Director’s
Remuneration Report which comply with the requirements
of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on the
company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of
financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
The Directors confirm to the best of their knowledge:
• The Group financial statements have been prepared
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and
Article 4 of the IAS Regulation and give a true and fair view
of the assets, liabilities, financial position and profit and loss
of the Group.
• The annual report includes a fair review of the development
and performance of the business and the financial position
of the Group and the Parent Company, together with the
description of the principal risks and uncertainties that they
face.
By order of the Board
NE Burrows
Company Secretary
10 June 2015
Triad Group Plc Annual Report and Accounts 2015 | 09
Corporate governance report
The Board has considered the principles and provisions of the
UK Corporate Governance Code 2012 (“the Code”) as set out
in the Listing Rules of the UK Listing Authority and applicable
for this financial period. The following statement sets out the
Group’s application of the principles of the Code and the
extent of compliance with the Code’s provisions, made in
accordance with the requirements of the Listing Rules.
The Board
The Directors who held office during the financial year were:
Executive Directors
John Rigg, Chairman
Nick Burrows, Finance Director
Adrian Leer, Commercial Director (appointed 3 March 2015)
Independent non-executive Directors
Alistair Fulton, senior independent non-executive Director
Steven Sanderson
John Rigg is Chairman. He is a Chartered Accountant. He
was a founder of Marcol Group Plc and was its Managing
Director from 1983 until 1988. Marcol was floated on the
Unlisted Securities Market in 1987. He was Chairman of Vega
Group plc from 1989 until 1996, holding the post of Chief
Executive for much of this period. Vega floated on the main
market in 1992. He was a founder shareholder of Triad and
served as the Chairman of the Company from 1988 up to
just before its flotation in 1996, when he resigned to develop
new business interests overseas. He was appointed as non-
executive Chairman in June 1999: in May 2004 he became
part-time executive Chairman. Between 4 February 2005 and
5 September 2007 John was acting Group Chief Executive.
Alistair Fulton is a non-executive Director. He is a Chartered
Engineer and member of the British Computer Society. He
was the founding Managing Director of Triad. He continued in
this role until February 1997 when he became non-executive
Chairman, a position he retained until June 1999, when he
took up his present position.
Steven Sanderson is a non-executive Director. He
is a Chartered Accountant. He was appointed non-
executive Director in January 2007. He has extensive
experience at executive director level in the IT services and
telecommunications sectors. His background includes public
flotations, plc directorship, fund raising, acquisition and
disposal activities.
Nick Burrows is the Finance Director. He is a Chartered
Accountant who joined Triad in 2001 as Financial Controller
of the Consulting & Solutions business. He was appointed
Company Secretary in 2008 and executive Finance Director in
October 2009.
Adrian Leer was appointed to the Board as Commercial
Director on 3 March 2015. He initially joined Triad in 2009
10 | Triad Group Plc Annual Report and Accounts 2015
in a consultative capacity, providing advice to the business
regarding its fledgling geospatial product, Zubed, and helping
to secure significant wins with major clients. In 2010, Adrian
became General Manager of Zubed Geospatial. In 2012 Adrian
became Commercial Director of Triad Consulting & Solutions.
Before joining Triad, Adrian was Group IT Director for the
Pettifer Group of Companies, and prior to that he held a
number of leadership roles at the global FMCG business,
Avon Products. This included being their IT Director for the
Western Europe, Middle East & Africa regions and Head of the
UK Distribution Centre.
The Board exercise full and effective control of the Group and
has a formal schedule of matters specifically reserved to it for
decision, including responsibility for formulating, reviewing and
approving Group strategy, budgets and major items of capital
expenditure.
Regularly the Board will consider and discuss matters which
include, but are not limited to:
• Strategy;
• Financial performance and forecast;
• Human resources; and
• City and compliance matters.
The Executive Chairman, John Rigg, is responsible for the
leadership and efficient operation of the Board. This entails
ensuring that Board meetings are held in an open manner,
and allow sufficient time for agenda points to be discussed.
It also entails the regular appraisal of each director, providing
feedback and reviewing any training or development needs.
The Board meets regularly with senior management to discuss
operational matters. The Non-Executive Directors must
satisfy themselves on the integrity of financial information and
that financial controls and systems of risk management are
robust. Following presentations by senior management and
a disciplined process of review and challenge by the Board,
clear decisions on the policy or strategy are adopted. The
responsibility for implementing Board decisions is delegated
to management on a structured basis and monitored at
subsequent meetings.
During the period under review, and to date, the Executive
Chairman has not held any significant commitments outside
the Group.
Alistair Fulton is the nominated senior independent non-
executive Director. He has long standing industry experience.
He is also free from any business or other relationship which
could materially interfere with the exercise of his independent
judgement. The Board benefits from this experience and
independence, when he brings his individual judgement to
Board decisions. He has been a non-executive Director for
eighteen years but the Board consider that he continues to
remain independent for the reasons stated above.
Corporate governance report
The Group has a procedure for Directors to take independent
professional advice in connection with the affairs of the Group
and the discharge of their duties as Directors.
The Board has an Audit Committee, comprised of the
Executive Chairman John Rigg, and the independent non-
executive Directors, Alistair Fulton and Steven Sanderson.
The Committee is chaired by Alistair Fulton.
The Board has a Remuneration Committee, comprised of the
Executive Chairman John Rigg, and the independent non-
executive Directors, Alistair Fulton and Steven Sanderson.
The Committee is chaired by Alistair Fulton.
The following table shows the attendance of Directors at
scheduled meetings of the Board and Audit and Remuneration
Committees during the year ended 31 March 2015 and
shows that the Board are able to allocate sufficient time to the
company to discharge their responsibilities effectively.
Audit
Remuneration
Board Committee Committee
Number of meetings held
13
1
2
Number of meetings attended
Executive Directors:
John Rigg (Chairman)
Nick Burrows
Adrian Leer
(appointed 3 March 2015)
Non-executive Directors:
Alistair Fulton
Steven Sanderson
13
12
-
12
13
1
n/a
n/a
1
1
2
n/a
n/a
2
2
Audit Committee
The members of the Audit Committee are shown above.
The Board believe that John Rigg and Steven Sanderson,
both Chartered Accountants with broad experience of the
IT industry, and Alistair Fulton, who has been a Director of
companies in the IT sector for over 20 years, have recent and
relevant financial experience, as required by the Code.
The Audit Committee is responsible for reviewing the
Group’s annual and interim financial statements and other
announcements. It is also responsible for reviewing the
Group’s internal financial controls and its internal control and
risk management systems. It considers the appointment and
fees of external auditors, and discusses the audit scope and
findings arising from audits. The Committee is also responsible
for assessing the Group’s need for an internal audit function.
Consideration of significant Issues in relation to the
financial statements
The Audit Committee have considered the following significant
issues in relation to the preparation of these financial
statements;
Revenue recognition: The Committee has considered
revenue recognised in consultancy and development projects
active at the end of the financial year, and software licence
revenues earned during the year, to ensure revenue has been
recognised correctly.
Onerous lease provision: The Committee has reviewed the
cash flows and discount rate used in the calculation of the
vacant property provision.
Going concern: The Committee has reviewed budgets and
cash flow projections against borrowing facilities available to
the Group to ensure the going concern basis of preparation of
the results remains appropriate.
Meetings with auditors and senior finance team
The Audit Committee met with the auditors prior to
commencement of the year end audit to discuss;
• Audit scope, strategy and objectives
• Key audit and accounting matters
• Independence and audit fee
Further meetings were held following completion of the audit
with the senior finance team and the auditors to assess the
effectiveness of the audit and discuss audit findings.
Effectiveness of external audit process
The Committee conducts an annual review of the
effectiveness of the annual report process. Inputs into the
review include feedback from the finance team, planning
and scope of the audit process and identification of risk, the
execution of the audit, communication by the auditor with the
Committee, how the audit adds value and a review of auditor
independence and objectivity. Feedback is provided to the
external auditor and management by the Committee, with any
actions reviewed by the Committee.
Auditor independence and objectivity
The Committee has procedures in place to ensure that
independence and objectivity is not impaired. These
include restrictions on the types of services which the
external Auditor can provide, in line with the FRC Ethical
Standards on Auditing. The external auditors themselves
have safeguards in place to ensure that objectivity and
independence is maintained and the Committee regularly
reviews independence taking into consideration relevant
UK professional and regulatory requirements. The external
auditors are required to rotate audit partners responsible for
the Group audit every five years.
Triad Group Plc Annual Report and Accounts 2015 | 11
Corporate governance report
Non-audit fees
The Committee reviews all non-audit work to ensure it is
appropriate and the fees justified. In relation to the non-audit
services provided by BDO LLP during the year, the Committee
reviewed and approved management’s reasons for selecting
BDO LLP as the best placed adviser on a case-by-case basis.
This decision was typically based on the merit of using BDO’s
existing knowledge of the Group.
Appointment of external auditor
BDO LLP was appointed external auditor in 2006 following a
tendering process.
BDO LLP has confirmed to the Committee that they remain
independent and have maintained internal safeguards to
ensure that the objectivity of the engagement partner and
audit staff is not impaired.
The Committee has considered the level of non-audit fees and
the nature of non-audit services provided and is satisfied that
auditor independence has been maintained.
Internal audit
The Audit Committee has considered the need for a separate
internal audit function this year but does not consider it
appropriate in view of the above controls, and in light of the
size of the Group. The Group is certified to ISO 9001: 2008.
Internal controls and risk management
The Board has applied the internal control and risk
management provisions of the Code by establishing a
continuous process for identifying, evaluating and managing
the significant risks faced by the Group. The Board regularly
reviews the process, which has been in place from the start
of the year to the date of approval of this report and which
is in accordance with Internal Control: Revised Guidance for
Directors on the Combined Code. The Board is responsible
for the Group’s system of internal control and for reviewing its
effectiveness. Such a system is designed to manage rather
than eliminate risk of failure to achieve business objectives,
and can only provide reasonable and not absolute assurance
against misstatement or loss.
In compliance with the Code, the Audit Committee regularly
reviews the effectiveness of the Group’s systems of internal
financial control and risk management. The Board’s monitoring
covers all controls, including financial, operational and
compliance controls and risk management. It is based
principally on reviewing reports from management to consider
whether significant weaknesses and risks are effectively
managed and, if applicable, considering the need for more
extensive monitoring.
The Board has also performed a specific assessment for the
purpose of this annual report. This assessment considers all
significant aspects of internal control and risk management
arising during the period covered by the report.
12 | Triad Group Plc Annual Report and Accounts 2015
The key elements of the internal control and risk management
systems are described below:
• Clearly documented procedures contained in a series of
manuals covering Group operations and management,
which are subject to internal project audit and external audit
as well as regular Board review.
• An appropriate budgeting process where the business
prepares budgets for the coming year, which are approved
by the Board.
• Close involvement in the day to day management of the
business by the executive Directors.
• Regular meetings between the executive Chairman,
executive Director and senior managers to discuss and
monitor potential risks to the business, and to implement
mitigation plans to address them.
Remuneration Committee
The Remuneration Committee is responsible for setting
remuneration for executive directors and the Chairman in
accordance with the remuneration policy below. In addition, the
Committee is responsible for recommending and monitoring the
level and structure of remuneration for senior management.
The Group’s Remuneration Committee is authorised to take
appropriate counsel to enable it to discharge its duty to make
recommendations to the Board in respect of all aspects of the
remuneration package of Directors.
The Directors Remuneration Report can be found on page 14.
Whistleblowing
Staff may contact the senior independent non-executive
Director, in confidence, to raise genuine concerns of possible
improprieties in financial reporting or other matters.
Directors’ training
Any new Board members are made fully aware of their duties
and responsibilities as Directors of listed companies, and are
supported in understanding and applying these by established
and more experienced Directors. Further training is available
for any Director at the Group’s expense should the Board
consider it appropriate in the interests of the Group.
Relations with shareholders
Substantial time and effort is spent by Board members on
meetings with and presentations to existing and prospective
investors. The views of shareholders derived from such
meetings are disseminated by the Chairman to other Board
members.
Private shareholders are invited to attend and participate at
the Annual General Meeting.
Corporate governance report
Terms of reference
B.2.3
The terms of reference of the Audit and Remuneration
Committees are available on request from the Company
Secretary.
Statement of compliance
The Board considers that it has been compliant with the
provisions of the Code for the whole of the period, except as
detailed below:
B.7.1
A.2.1
The roles of chairman and chief executive should
not be exercised by the same individual. John Rigg
is the Executive Chairman. The Board currently has
no plans to recruit a Chief Executive Officer, as it
considers that the duties are being satisfactorily
covered by members of the Executive Board and
the Group’s senior management.
B2.1/2.4 There should be a nominations committee which
should lead the process for board appointments
and make recommendations to the board. The
Board considers that because of its size, the whole
Board should be involved in Board appointments.
B.6
The board should undertake a formal and rigorous
annual evaluation of its own performance and that
of its committees and individual directors. There is
a process of continuous informal evaluation, due to
the small size of the Board.
Non-executive directors should be appointed for
specified terms subject to re-election. Although not
appointed for fixed terms, Non-executive Directors
are subject to re-election in accordance with the
Company’s Articles of Association at the Annual
General Meeting. Their contracts are subject to a
notice period that does not exceed one month.
Non-executive directors who have served longer
than nine years should be subject to annual re-
election. The Board consider that because of its
size, re-election by rotation in accordance with the
Company’s Articles of Association at the Annual
General Meeting is sufficient.
By order of the Board
NE Burrows
Company Secretary
10 June 2015
Triad Group Plc Annual Report and Accounts 2015 | 13
Directors’ Remuneration report
On the following pages we set out the Remuneration Report for the year ended 31 March 2015. The members of the Remuneration
Committee are shown in the Corporate Governance Report on page 10.
This report has been prepared in accordance with the Companies Act 2006 and the new requirements of the Large and Medium
Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2014, and is split into two sections as follows;
1. The Directors’ remuneration policy. This will be subject to a binding shareholder vote at this years’ Annual General Meeting.
2. The Annual report on remuneration. This will be subject to an advisory shareholder vote at this years’ Annual General Meeting.
No major decisions or changes were made to Directors’ remuneration during the year.
Directors’ remuneration policy
The remuneration policy sets out the framework within which the Company remunerates its Directors. The Company’s remuneration
policy was put to a shareholder vote at the 2014 Annual General Meeting of the Company and was approved by 100% of
shareholders. There is no requirement to vote on the policy in 2015 unless any changes to the policy are proposed, and the
Committee does not intend making any changes to the policy at this time.
Policy table – executive Directors
Element
Base salary
Benefits in kind
Pension
Share option scheme
Relevance to short
and long term
strategic objectives
Reflects the individual’s
skills, responsibilities
and experience.
Supports the
recruitment and
retention of Executive
Directors.
Protects the well-
being of directors
and provides fair and
reasonable market
competitive benefits.
Provides competitive
post-retirement
benefits to support
the recruitment and
retention of Executive
Directors.
Encourages share
ownership amongst
employees and aligns
their interests with the
shareholders.
Operation
Maximum payable
Performance
metrics
Reviewed annually
taking into
consideration individual
and companywide
performance and the
wider employee pay
review.
Benefits in kind include
company cars or
allowances, private
medical insurance, life
cover and permanent
health insurance.
Benefits are reviewed
periodically.
The Company pays
contributions into
a personal pension
scheme or cash
alternative.
Ordinarily, salary
increases will be in
line with average
increases awarded to
other employees in the
Company.
None, although
individual performance
is considered when
setting salary levels.
None.
Benefits are set at a
level considered to
be appropriate taking
into account individual
circumstances
The Company matches
individual contributions
up to a maximum of 5%.
None.
The Company operates
an EMI share option
scheme. Discretionary
awards are made in
accordance with the
scheme rules.
The potential value of
options held rises as
the Company’s share
price increases.
Specific performance
criteria are specified at
the time of awarding
the share options
to ensure alignment
with the interests of
shareholders.
14 | Triad Group Plc Annual Report and Accounts 2015
Directors’ Remuneration report
The award of share options is at the discretion of the Remuneration Committee: there is no scheme providing entitlement to share
options, and there is no long-term incentive scheme. The Group does not believe that performance related bonuses are appropriate
at the present time. The Executive Directors’ existing interests in shares and share options are expected to align their interests with
those of shareholders.
Policy table – non-executive Directors
Element
Fees
Relevance to short
and long term
strategic objectives
Competitive fees to
attract experienced
directors
Operation
Maximum payable
Reviewed annually
In general the level
of fee increase for
the non-executive
directors will be set
taking account of
any change in
responsibility.
Performance
metrics
Not applicable.
The remuneration of the non-executive Directors is agreed by the Board. However no Director is involved in deciding their own
remuneration.
Approach to recruitment remuneration
The Group’s remuneration policy is to provide remuneration packages which secure and retain management of the highest quality.
Therefore when determining the remuneration packages of new executive Directors, the Remuneration Committee will structure a
package in accordance with the general policy for executive Directors as shown above. In doing so the Committee will consider a
number of factors including:
• the salaries and benefits available to executive Directors of comparable companies;
• the need to ensure executive Directors’ commitment to the continued success of the Group;
• the experience of each executive Director; and
• the nature and complexity of the work of each executive Director.
Directors’ service contracts and policy
The details of the Directors’ contracts are summarised as follows:
J C Rigg
A M Fulton
S M Sanderson
N E Burrows
A Leer
Date of contract
Notice period
01/07/1999
19/02/1997
01/01/2007
03/03/2015
03/03/2015
1 month
1 month
1 month
6 months
6 months
All contracts are for an indefinite period. No contract has any provision for the payment of compensation upon the termination of that contract.
Illustrations of application of remuneration policy
As there are currently no performance related or variable elements of executive director remuneration it is not appropriate to prepare
illustrations required under the legislation.
Triad Group Plc Annual Report and Accounts 2015 | 15
Directors’ Remuneration report
Policy on payment for loss of office
It is the Group’s policy in relation to Directors’ contracts that:
• executive Directors should have contracts with an indefinite term providing for a maximum of six months’ notice by either party.
• non-executive Directors should have terms of engagement for an indefinite term providing for one month notice by either party.
• there is no provision for termination payments to Directors.
Consideration of employment conditions elsewhere in group
In setting the executive Directors’ remuneration the Committee takes into account the pay and employment conditions applicable
across the Group in the reported period. In common with the fact that there were no general pay increases for employees
elsewhere in the Group, no increases were made in the period to Directors’ remuneration terms since the prior year. No consultation
has been held with employees in respect of executive Directors’ remuneration.
Consideration of shareholders views
The policy is unchanged from the previous year as endorsed by the unanimous vote in favour of the approval of the Directors’
Remuneration Report at the Annual General Meeting in August 2014.
Annual report on remuneration (audited)
Directors’ remuneration - single total figure of remuneration
The remuneration of each of the Directors for the period they served as a Director are set out below:
Director
Executive
J C Rigg
N E Burrows
A Leer (appointed 3 March 2015)
Non-executive
A M Fulton
S M Sanderson
Basic salary
and fees
Benefits
in kind
Pension
2015
Total
2014
Total
£’000
£’000
£’000
£’000
£’000
25
91
8
25
20
-
11
1
-
-
-
16
1
-
-
25
118
10
25
20
25
116
-
25
20
Benefits in kind include the provision of company car and medical insurance.
No performance measures or targets were in place for either the year ended 31 March 2015, or any prior financial year, upon which
any variable pay elements could become payable during the year.
Two Directors are members of a money purchase scheme into which the Group made contributions during the year. The
contributions paid by the Group in respect of these Director are as follows:
N E Burrows
A Leer (from 3 March 2015)
2015
£’000
16
1
2014
£’000
16
-
The pension contributions for both directors is greater than the 5% of salary shown as it includes an additional amount relating to the
Group’s salary exchange scheme. This reflects a sacrifice from salary plus the resulting National Insurance saving for the company
(13.8% of the sum sacrificed).
16 | Triad Group Plc Annual Report and Accounts 2015
Directors’ Remuneration report
Details of share options awarded to Directors in the year
During the year N E Burrows was awarded 25,000 share options, which are not exercisable at the year end.
Payments to past Directors
There were no payments to past Directors during the year.
Payment for loss of office
There were no payments for loss of office during the year.
Directors’ interests in shares
The Directors who held office at the end of the financial year had the following beneficial interests in the ordinary shares of the
Company. No change has occurred between the year end and the date of this report.
A M Fulton
J C Rigg
S M Sanderson
N E Burrows
A Leer
*As at date of appointment, 3 March 2015
N E Burrows:
granted 07.03.06
granted 07.08.08
granted 23.09.11
granted 18.09.14
A Leer:
granted 23.09.11
granted 18.09.14
1 April 2014
31 March 2015
354,100
4,509,400
104,089
7,893
5,379*
354,100
4,509,400
104,089
7,893
5,379
At
beginning
of year
Granted
during
year
Lapsed
during
year
At end of
year
Exercise
price
Exercise
period
20,000
25,000
100,000
-
-
-
-
25,000
50,000
-
-
100,000
195,000
125,000
-
-
-
-
-
-
-
20,000
25,000
100,000
25,000
50,000
100,000
320,000
51.5p
14.0p
13.5p
11.0p
07.03.09 to 07.03.16
07.08.11 to 07.08.18
23.09.14 to 23.09.21
18.09.17 to 18.09.24
13.5p
11.0p
23.09.14 to 23.09.21
18.09.17 to 18.09.24
195,000 share options were exercisable at the end of the year (2014: 45,000)
Share options are exercisable provided that the relevant performance requirement has been satisfied.
• that the Group shall have achieved positive earnings per share in any financial year commencing at least one year after the date of
grant of the option. This performance requirement is the same as that applying to employee share options granted at the same time.
The total share based payment expense recognised in the year in respect of Directors’ share options is £1,005 (2014: £1,556).
The market price of the Company’s shares was 10.5p at 31 March 2015 and the range during the year was between 7.75p and 19.0p.
Triad Group Plc Annual Report and Accounts 2015 | 17
Directors’ Remuneration report
Annual report on remuneration (Unaudited)
Performance graph
The following graph shows the Group’s performance, measured by total shareholder return, compared with the performance of
the FTSE Fledgling Index (“FTSEFI”) also measured by total shareholder return (“TSR”). The FTSEFI has been selected for this
comparison because it is an index of companies with similar current market capitalisation to Triad Group Plc.
TRD v FTSE Fledging Index
Fledging
Fledging
Triad
Triad
Index
300
250
200
150
100
50
Mar-09
Mar-09
Mar-10
Mar-11
Mar-12
Year
Year
Mar-13
Mar-14
Mar-15
Chief executive remuneration
There have been no changes to the remuneration of the Executive Chairman during the year.
Relative importance of spend on pay
During the year there were no dividends or other cash distributions to shareholders (2014: £nil). The total employee remuneration
(including directors) during the year was £3.045m (2014: £3.039m).
Consideration of matters related to directors remuneration
During the year there were no meetings held relating to directors’ remuneration other than to review the remuneration policy for inclusion
in the 2014 Annual Report and Accounts.
Statement of voting at last general meeting
At the last annual general meeting the Directors’ Remuneration Report was approved with 100% of votes cast in favour of the resolution.
There were 2,550 votes withheld. The Directors’ Remuneration Policy was approved with 100% of votes cast in favour of the resolution.
There were 3,000 votes withheld.
Alistair Fulton
Chairman, Remuneration Committee
10 June 2015
18 | Triad Group Plc Annual Report and Accounts 2015
Independent auditors’ report to the members of Triad Group Plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and the Parent Company’s affairs as at 31 March
2015 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union;
• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union and applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006; and, as regards
the Group financial statements, Article 4 of the IAS Regulation.
The financial statements of Triad Group Plc for the year ended 31 March 2015 comprise:
• The Group and Parent Company statement of comprehensive income for the year then ended;
• The Group and Parent Company statements of financial position as at 31 March 2015;
• The Group and Parent Company statements of changes in equity for the year then ended;
• The Group and Parent Company statements of cash flows for the year then ended; and
• The accounting policies and critical accounting judgements and the notes to the financial statements.
The financial reporting framework that has been applied in the preparation of the Group and Parent Company financial statements
is applicable law and IFRSs as adopted by the European Union and as regard the Parent Company, as applied in accordance with
the provisions of the Companies Act 2006. This report is made solely to the Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Financial reporting Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/
auditscopeukprivate.
Auditor commentary
Our application of materiality
The objective of our audit is to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatements, whether due to fraud or error, thereby enabling us to express an opinion on whether the financial statements
are prepared, in all material respects, in accordance with an applicable financial reporting framework. We apply the concept of
materiality in assessing the risks of material misstatement and in determining the nature, timing and extent of our audit procedures
to gather sufficient appropriate audit evidence. For the purposes of determining whether the financial statements are free from
material misstatement we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of
a reasonably knowledgeable person, relying on the financial statements would be changed or influenced. Based on out professional
judgement, we determined materiality for the Group financial statements as a whole to be £176,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £3,500 as well
as misstatements below that amount that in our view warranted reporting for qualitative reasons.
Triad Group Plc Annual Report and Accounts 2015 | 19
Independent auditors’ report to the members of Triad Group Plc
An overview of our audit approach
The Group financial statements are a consolidation of six companies made up of one trading company (the Parent Company) which
provides consultancy and development services and five dormant companies. In establishing the overall approach to the Group
audit, we determined the type of work that needed to be performed on each company. The Group operates solely in the United
Kingdom.
Based on our assessment we performed an audit of the complete financial information of the Parent Company as the only trading
company.
In our audit, we tested and examined information, using sampling and other auditing techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw conclusions. Our audit evidence was largely obtained through substantive
procedures.
Our assessment of risk of material misstatement
In preparing the financial statements, the Directors made a number of subjective judgements around significant accounting
estimates which involved making assumptions on future events which are inherently uncertain. Our assessed risks of material
misstatements include those areas of particular subjective judgement and had the greatest impact on the audit strategy and the
allocation of resources in the audit.
The following risks of material misstatement identified were discussed with the Audit Committee and are included within their report
on those matters they considered to be significant issues in relation to the financial statements set out on page 11.
Risk of material misstatement
Our response to the risks identified
Revenue recognition
We consider the timing of revenue recognition and the
appropriateness of deferred and accrued revenue balances at
the balance sheets date, which involves judgement.
Our procedures included understanding and testing the controls
in respect of billing from approved timecards and testing the
revenue recognised in the period.
The ISA’s (UK & Ireland) presume there is a risk of fraud in
revenue recognition because of the pressure management may
feel to achieve expected results.
We tested the timing of revenue recognition by reviewing all ongoing
consultancy contracts at the balance sheets date and the level of
completion in terms of milestones achieved and time recorded.
Going concern
This was considered to be an area of audit focus due to
the current financial position of the Group and its trading
performance in recent years.
We tested a sample of approved timecards along with billings
either side of the balance sheet date and compared these to
recorded revenue, accrued revenue and deferred revenue.
We obtained the Group’s forecast through to 30 September
2016. We evaluated the assumptions underlying the forecasts
including challenging the forecast cashflows and the discount rate
applied. We considered the adequacy of the Group’s financing
structure, considered compliance with covenants and assessed
the sensitivity of the forecasts to changes in the key assumptions.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
• the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act
2006; and
• 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.
20 | Triad Group Plc Annual Report and Accounts 2015
Independent auditors’ report to the members of Triad Group Plc
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of
performing our audit; or
• is otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during
the audit and the directors’ statement that they consider the annual report is fair, balanced and understandable and whether the
annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have
been disclosed.
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Under the Listing Rules we are required to review:
• the directors’ statement, set out on page 8, in relation to going concern; and
• the part of the corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
We have no exceptions arising from this review.
Anna Draper (senior statutory auditor)
10 June 2015
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
Triad Group Plc Annual Report and Accounts 2015 | 21
Statements of comprehensive income and expense for the year ended 31 March 2015
Group and company
Revenue
Cost of sales
Gross profit
Administrative expenses
Profit from operations
Finance expense
Profit before tax
Tax expense
Profit for the year and total comprehensive income
attributable to equity holders of the parent
Basic earnings per share
Diluted earnings per share
All amounts relate to continuing activities.
Note
2015
£’000
2014
£’000
23,482
19,702
(20,171)
(16,839)
3,311
(2,849)
462
(110)
352
-
352
2.32p
2,863
(2,738)
125
(114)
11
-
11
0.07p
2.32p
0.07p
5
6
8
10
10
22 | Triad Group Plc Annual Report and Accounts 2015
Statements of changes in equity for the year ended 31 March 2015
Group
At 1 April 2013
Profit for the year and total comprehensive income
Share-based payments
Unclaimed dividends
At 1 April 2014
Profit for the year and total comprehensive income
Share-based payments
At 31 March 2015
Company
At 1 April 2013
Profit for the year and total comprehensive income
Share-based payments
Unclaimed dividends
At 1 April 2014
Profit for the year and total comprehensive income
Share-based payments
At 31 March 2015
Share
Capital
£’000
151
-
-
-
Share
premium
account
£’000
Capital
redemption
reserve
Retained
earnings
Total
£’000
£’000 £’000
562
104
(419)
398
-
-
-
-
-
-
11
12
58
11
12
58
151
562
104
(338)
479
-
-
-
-
-
-
352
352
8
8
151
562
104
22
839
Share
Capital
£’000
151
-
-
-
Share
premium
account
£’000
Capital
redemption
reserve
Retained
earnings
Total
£’000
£’000 £’000
562
104
(424)
393
-
-
-
-
-
-
11
12
58
11
12
58
151
562
104
(343)
474
-
-
-
-
-
-
352
352
8
8
151
562
104
17
834
Share capital represents the amount subscribed for share capital at nominal value.
The share premium account represents the amount subscribed for share capital in excess of the nominal value.
The capital redemption reserve represents the nominal value of the purchase and cancellation of its own shares by the Company in 2002.
Retained earnings represents the cumulative net gains and losses recognised in the statement of comprehensive income and expense.
Triad Group Plc Annual Report and Accounts 2015 | 23
Statements of financial position at 31 March 2015
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Financial liabilities
Short term provisions
Non-current liabilities
Financial liabilities
Long term provisions
Total liabilities
Net assets
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total shareholders’ equity
Registered number: 2285049
Group
Company
Note
2015
£’000
2014
£’000
2015
£’000
2014
£’000
11
12
14
15
112
124
236
152
58
210
112
124
236
152
58
210
4,011
3,436
4,011
3,436
390
108
390
108
4,401
3,544
4,401
3,544
4,637
3,754
4,637
3,754
16
17
18
(3,133)
(2,355)
(3,138)
(2,360)
(6)
(248)
(109)
(241)
(6)
(248)
(109)
(241)
(3,387)
(2,705)
(3,392)
(2,710)
17
18
(18)
(393)
(24)
(546)
(18)
(393)
(24)
(546)
(411)
(570)
(411)
(570)
(3,798)
(3,275)
(3,803)
(3,280)
839
479
834
474
19
151
562
104
22
839
151
562
104
(338)
479
151
562
104
17
834
151
562
104
(343)
474
The financial statements on pages 24 to 42 were approved by the Board of Directors and authorised for issue on 10 June 2015 and were
signed on its behalf by:
NE Burrows
Director
SM Sanderson
Director
Triad Group Plc is registered in England and Wales with registered number 2285049.
24 | Triad Group Plc Annual Report and Accounts 2015
Statements of cash flows for the year ended 31 March 2015
Group and company
Cash flows from operating activities
Profit for the year before taxation
Adjustments for:
Depreciation of property, plant and equipment
Profit on disposal of property, plant and equipment
Amortisation of intangible assets
Interest expense
Share-based payment expense
Changes in working capital
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
(Decrease)/increase in provisions
Cash generated/(consumed) by operations
Interest paid
Note
2015
£’000
2014
£’000
352
31
-
50
11
8
(575)
778
(146)
509
(11)
11
20
(6)
55
21
12
(376)
(44)
8
(299)
(21)
Net cash flows from operating activities
498
(320)
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
Financing activities
Finance lease principal payments
Proceeds from dividend write off
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
(10)
(97)
-
(107)
(5)
-
(5)
-
(20)
6
(14)
(3)
58
55
386
(279)
4
283
Cash and cash equivalents at end of the period
15
390
4
Triad Group Plc Annual Report and Accounts 2015 | 25
Notes to the financial statements for the year ended 31 March 2015
1. Principal accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have
been consistently applied to all the years presented, unless
otherwise stated.
These financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS and
IFRIC interpretations), as adopted by the European Union
(EU), issued by the International Accounting Standards Board
(IASB) and with those parts of the Companies Act 2006
applicable to companies preparing their accounts under IFRS.
These financial statements have been prepared on a historical
cost basis and are presented in sterling, the functional
currency of the Company.
Basis of consolidation
Where the Company has control over an investee, it is
classified as a subsidiary. The Company controls an investee
if all three of the following elements are present: power over
the investee, exposure to variable returns from the investee
and the ability of the investor to use its power to affect those
variable returns. The consolidated financial statements present
the results of the Company and its subsidiaries (“the Group”)
as if they formed a single entity. Intercompany transactions
and balances between Group companies are therefore
eliminated in full.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any impairment in value.
Depreciation is calculated so as to write off the cost of assets,
less their estimated residual values, on a straight line basis over
the expected useful economic lives of the assets concerned.
The principal annual rates used for this purpose are:
Computer hardware
Fixtures and fittings
Motor vehicles
Intangible assets
%
25-33
10-33
25-33
Expenditure on internally developed products is capitalised if it
can be demonstrated that:
• the product will generate future economic benefits,
internally and/or externally; and
• expenditure attributable to the development of the product
can be measured reliably.
Intangible assets are stated at cost, net of accumulated
amortisation and any impairment in value. The cost of
internally developed software is the attributable salary costs
and directly attributable overheads.
Amortisation is calculated so as to write off the cost of
assets, less their estimated residual values, on a straight
line basis over the expected useful economic lives of the
assets concerned. Amortisation is charged to administration
expenses in the statement of comprehensive income and
expense. The principal annual rates used for this purpose are:
Purchased computer software
Internally developed software
%
25-33
10-25
Impairment of non-financial assets
Non-financial assets are subject to impairment tests whenever
events or changes in circumstances indicate that their carrying
amount may not be recoverable. Where the carrying value of
an asset exceeds its recoverable amount the asset is written
down accordingly. Impairment is charged to administration
expenses in the statements of comprehensive income and
expense.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value, and subsequently measured at amortised cost using
the effective interest method, less provision for impairment.
Amounts are charged to an impairment account when there
is objective evidence that an impairment loss has occurred.
Amounts are written off against the carrying amount of trade
receivables when it is certain that the receivable will not be
realised.
Cash
Cash in the balance sheet comprises cash held on demand
with banks. For the purpose of the consolidated cash flow
statement, cash and cash equivalents consist of cash, as
defined above, net of bank borrowings due on demand.
Trade and other payables
• it is technically feasible to develop the product so that it will
be available for use or sale;
• adequate resources are available to complete the
Trade and other payables are recognised initially at fair value,
and subsequently measured at amortised cost using the
effective interest method.
development;
• there is an intention to complete the product and use or sell it;
• it is able to be used or sold;
Borrowings
Borrowings are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
26 | Triad Group Plc Annual Report and Accounts 2015
Notes to the financial statements for the year ended 31 March 2015
Leases
Costs in respect of operating leases are charged to the
statement of comprehensive income and expense on a
straight line basis over the lease term.
Finance lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
Foreign currencies
Assets and liabilities expressed in foreign currencies are
translated into sterling at the exchange rate ruling on the
balance sheet date. Transactions in foreign currencies are
recorded at the exchange rate ruling as at the date of the
transaction. All differences on exchange are taken to the
statement of comprehensive income and expense in the year
in which they arise.
Revenue
Revenue, which excludes value added tax, represents the
invoiced value of goods and services supplied: where a
service has been provided, but not yet invoiced, the amount is
included in the financial statements as accrued income.
Income from consultancy contracts, which are on a time hire
basis, is recognised as the services are provided.
Income from maintenance and fixed price consultancy and
development contracts, is recognised over the life of the
contract, using the percentage of completion method, and is
deferred to the extent that it has not been earned.
Income from the sale of Zubed licences, or the Zubed licence
component of any contract, is fully recognised at the point
of sale, less any amounts attributable to maintenance and
support, which are recognised over the life of the licence.
Exceptional items
Items which are both material and non-recurring are presented
as exceptional items within their relevant category in the
statement of comprehensive income and expense. The
separate reporting of exceptional items helps to provide
a better indication of the Group’s underlying business
performance. Events which may give rise to the classification
of items as exceptional, if of a significantly material value,
include non-routine movements in provisions, litigation and
similar settlements, and asset impairments.
Taxation
The charge for taxation is based on the profit or loss for the
year as adjusted for disallowable items. It is calculated using
tax rates that have been enacted or substantively enacted by
the balance sheet date.
Full provision is made for deferred tax on all relevant temporary
differences resulting from the difference between the carrying
value of an asset or liability and its tax base. Deferred tax assets
are recognised to the extent that it is probable that the deferred
tax asset will be recovered in the foreseeable future. Deferred
tax is calculated at the tax rates that are expected to apply to
the period when the asset is realised or liability is settled.
Pension costs
Contributions to defined contribution plans are charged to
the statements of comprehensive income and expense as the
contributions accrue.
Share-based payments
Share-based incentive arrangements are provided to
employees under the Group’s share option scheme. Share
options granted to employees are valued at the date of grant
using an appropriate option pricing model and are charged
to operating profit over the performance or vesting period of
the scheme. The annual charge is modified to take account
of shares forfeited by employees who leave during the
performance or vesting period and, in the case of non-market
related performance conditions, where it becomes unlikely the
option will vest.
Provisions
A provision is recognised when the Group has a legal or
constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required
to settle the obligation. If the effect is material, expected future
cash flows are discounted using a current pre-tax rate that
reflects the risks specific to the liability. Calculations of these
provisions require judgements to be made.
Going concern
The Group’s business activities, together with the factors likely
to affect its future development, performance and position,
are set out in the Strategic Review. The financial position of
the Group, its cash flows, liquidity position and borrowing
facilities are described in the Strategic Review, and in note
17 to the financial statements. In addition note 3 to the
financial statements includes the Group’s objectives, policies
and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and
hedging activities, and its exposure to credit risk and liquidity
risk. As highlighted in note 17 to the financial statements,
the Group meets its day to day working capital requirements
through an invoice finance facility.
Triad Group Plc Annual Report and Accounts 2015 | 27
Notes to the financial statements for the year ended 31 March 2015
The Group’s projections, taking account of reasonably
possible changes in trading performance, show that the
Group should be able to operate within the level of its current
facility. The facility may be terminated by either party with
one month’s written notice. The board receives regular cash
flow and working capital projections to enable it to monitor
its available headroom under this facility. These projections
indicate that the Group expects to have sufficient resources to
meet its reasonably expected obligations. The bank has not
drawn to the attention of the Group any matters to suggest
that this facility will not be continued on acceptable terms.
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
Surplus property
Provision has been made to meet the estimated liabilities of any
property surplus to the requirements of the business. All ongoing
costs net of estimated future rental income are charged to the
provision. The provision is discounted, unless the effect of the
time value of money is not material (see note 18).
Management exercises judgement in estimating costs, rental
incomes and the discount rate used in the calculation of the
provision.
Were the discount rate to increase or decrease by 1% this
would increase or decrease net income and equity by £10,000
Were 50% of the vacant property to be let through to the end
of the lease at a rent that was the same as the rent paid, this
would increase net income and equity by £113,000.
New standards and interpretations
Deferred tax asset
The Group has adopted with effect from 1 April 2014 certain
mandatory new standards, amendments and interpretations.
Adoption of these standards, amendments and interpretations
did not have any impact on the results, cash flows or financial
position of the Group or their presentation.
There are also certain standards, amendments and
interpretations which have been issued but which are not yet
mandatory (and in some cases had not yet been adopted
by the EU). The Group has not applied these standards and
interpretations in the preparation of these financial statements.
However the Directors do not anticipate that the adoption of the
standards and amendments will have a material impact on the
Group’s financial statements in the period of initial application.
2. Critical accounting estimates
and judgements
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
A deferred tax asset of £1,646,000 (2014: £1,826,000) has
not been recognised because of the uncertainty of the timing
of future profits. The unrecognised deferred tax asset may
result in any future profits being charged to tax below the
standard rate.
Impairment of intangible assets
Intangible assets are reviewed for impairment if events or
changes in circumstances indicate that the carrying amount
may not be recoverable. When a review for impairment is
conducted, the recoverable amount is determined based
on value-in-use calculations prepared on the basis of
management’s assumptions and estimates.
Critical judgements in applying the entity’s
accounting policies
In applying its accounting policies the Group has not been
required to make any judgements, apart from those involving
estimates, that have had a significant effect on the amounts
recognised in these financial statements.
3. Financial risk management
The Group uses financial instruments that are necessary to
facilitate its ordinary purchase and sale activities, namely
cash, bank borrowings in the form of a receivables finance
facility and trade payables and receivables: the resultant risks
are foreign exchange risk, interest rate risk, credit risk and
liquidity risk. The Group does not use financial derivatives in its
management of these risks.
28 | Triad Group Plc Annual Report and Accounts 2015
Notes to the financial statements for the year ended 31 March 2015
The Group is also exposed to credit risk from accrued income,
being revenue earned but not yet invoiced (note 14).
Financial assets that are past due but not impaired are
analysed in note 14. Each balance has been reviewed by
management to assess its recoverability.
The Group also has credit risk from cash deposits with banks
(note 15). The Group only banks with financial institutions with
a good credit rating.
The Group’s maximum exposure to credit risk is:
Trade and other receivables
Accrued income
Cash and cash equivalents
Note
14
14
15
2015
£’000
3,420
411
390
2014
£’000
2,944
258
108
4,221
3,310
Liquidity risk
The Group’s liquidity risk arises from its management of
working capital. The Group has a facility to borrow an amount
up to 90% of approved trade debtors subject to a maximum
limit of £2m. The facility may be terminated by either party with
one month’s written notice. The Board receives regular cash
flow and working capital projections to enable it to monitor
its available headroom under this facility. At the balance sheet
date these projections indicated that the Group expected
to have sufficient liquid resources to meet its reasonably
expected obligations. Maturity of financial liabilities is set out in
notes 16 and 17.
Capital risk management
The Group’s capital comprises both borrowings and
shareholders’ equity. Its objectives when managing capital
are to safeguard the Group’s ability to continue as a going
concern in order to maximise shareholder value. To maintain or
adjust the capital structure the Group may adjust the dividend
payment to shareholders, return capital to shareholders, issue
new shares or alter the level of borrowings.
3.2 Fair value estimation
The carrying value of financial assets and liabilities
approximate their fair values.
The Board reviews and agrees policies for managing these
risks and they are summarised below. These policies are
consistent with last year.
3.1 Financial risk factors
Foreign exchange risk
There are a small number of routine trading contracts with
both suppliers and clients in euros. In all such circumstances
the “back to back” contracts with supplier and client will be in
the same currency thereby mitigating the Group’s exposure
to movements in exchange rates. Payments and receipts are
made through a bank account in the currency of the contract:
therefore balances held in any foreign currency are to facilitate
day to day transactions. With a functional currency of sterling
there are the following foreign currency net assets:
Group and company
Note
2015
£’000
2014
£’000
Currency: Euros
Net cash
Trade and other receivables
Trade and other payables
15
14
16
66
19
(28)
57
10
130
(98)
42
Any change in currency rates would have no significant effect
on results.
Interest rate risk
The Group’s interest rate risk arises from its borrowings, which
are at a rate that fluctuates in relation to movements in bank
base rate. This facility, as detailed in note 17, is secured by
way of a debenture over all assets. At the year end borrowing
under this facility totalled £ nil (2014: £104,000).
Cash balances are held in short term interest bearing
accounts, repayable on demand: these attract interest rates
which fluctuate in relation to movements in bank base rate.
This maintains liquidity and does not commit the Group to
long term deposits at fixed rates of interest.
A 1% change in interest rates would have changed net
income and equity by £4,000 (2014: £5,000).
Credit risk
The Group is mainly exposed to credit risk from credit sales.
It is Group policy to assess the credit risk of new customers
before entering into contracts. Each new customer is
assessed, using external ratings and relevant information
in the public domain, before any credit limit is granted. In
addition, trade receivables balances are monitored on a
regular basis to minimise exposure to bad debts. The amount
charged to the income statement during the year in respect of
bad debts was £28,000, being 0.12% of revenue (2014: £nil).
Triad Group Plc Annual Report and Accounts 2015 | 29
Notes to the financial statements for the year ended 31 March 2015
4. Segmental reporting
The Group derives its revenue from two operating segments, which offer different services, being Resourcing and Consulting &
Solutions.
The Resourcing segment provides services to the public and private sectors in the areas of both contract and permanent IT
resourcing. The Consulting & Solutions segment provides IT consultancy and solutions services, including location intelligence
services to both the public and private sectors.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker has been identified as the Board of Directors.
Revenue
Profit from operations
Revenue
Profit/(loss) from operations
Resourcing
2015
£’000
Consulting &
Solutions
2015
£’000
Total
2015
£’000
19,845
3,637
23,482
392
70
462
Resourcing
2014
£’000
Consulting &
Solutions
2014
£’000
Total
2014
£’000
16,991
2,711
19,702
327
(202)
125
Assets and liabilities are not reported internally by segment as management do not require such information to manage the business,
so no such segmental information is presented.
The Group operates solely in the UK. All material revenues are generated in the UK.
26% (2014: 20%) of revenue was generated in the public sector. The largest single customer contributed 35% (2014: 28%) of Group
revenue, was in the private sector, and is reported within the Resourcing segment.
From 1 April 2015 the Group will not be reporting its results in accordance with the operating segments above. This is to more
accurately reflect the Group’s operating model and management’s reporting and decision making processes as explained in the
Chairman’s Statement above.
30 | Triad Group Plc Annual Report and Accounts 2015
Notes to the financial statements for the year ended 31 March 2015
5. Profit from operations
Profit from operations is stated after charging/(crediting):
Profit on disposal of property, plant and equipment
Depreciation of owned assets
Amortisation of intangible assets
Operating leases for land and buildings
Other operating leases
Impairment of receivables
Auditors’ remuneration:
Audit of financial statements: Group and company
Taxation services
6. Finance expense
Bank interest payable
Other interest payable
Total interest expense
Unwinding of discount on provisions
Net foreign exchange loss
Total finance expense
2015
£’000
2014
£’000
-
31
50
453
31
28
50
4
(6)
20
55
380
-
-
53
3
2015
£’000
2014
£’000
8
3
11
87
12
19
2
21
92
1
110
114
Triad Group Plc Annual Report and Accounts 2015 | 31
Notes to the financial statements for the year ended 31 March 2015
7. Employees and directors
Group and company
Average number of persons (including executive Directors) employed
Senior management
Fee earners
Sales
Administration and finance
Staff costs for the above persons (including executive Directors)
Wages and salaries
Social security costs
Defined contribution pension costs
Equity settled share-based payments
Directors
Emoluments
Money purchase pension contributions
One Director (2014: one) had retirement benefits accruing under money purchase pension schemes.
2015
2014
Number Number
4
24
16
8
52
4
28
16
9
57
2015
£’000
2014
£’000
2,793
2,792
356
244
8
317
235
12
3,401
3,356
2015
£’000
2014
£’000
181
17
198
170
16
186
32 | Triad Group Plc Annual Report and Accounts 2015
Notes to the financial statements for the year ended 31 March 2015
8. Tax expense
Tax expense in income statement
2015
£’000
2014
£’000
-
-
The tax expense for the year differs from the standard rate of corporation tax in the UK (21%; 2014: 23%). The differences are explained
below:
Profit before tax
Profit before tax multiplied by standard rate of corporation tax in the UK of 21% (2014: 23%)
Effects of:
Expenses not deductible for tax purposes
Movement in unrecognised deferred tax asset in respect of operating losses
Movement in unrecognised deferred tax asset in respect of temporary differences
Total tax charge for the year
2015
£’000
2014
£’000
352
74
12
(75)
(11)
-
11
3
9
(6)
(6)
-
A deferred tax asset of £1,646,000 (2014: £1,826,000) on trading losses of £8,119,000 (2014: £8,475,000) has not been recognised
because of the uncertainty of the timing of future profits. The unrecognised deferred tax asset may result in any future profits being
charged to tax below the standard rate.
Group and company
Accelerated depreciation
Losses carried forward indefinitely
Unrecognised deferred tax asset
9. Dividends
No dividends have been paid or proposed for year ended 31 March 2015 (2014: nil).
2015
£’000
2014
£’000
22
46
1,624
1,780
1,646
1,826
Triad Group Plc Annual Report and Accounts 2015 | 33
Notes to the financial statements for the year ended 31 March 2015
10. Earnings per ordinary share
Earnings per share have been calculated on the profit for the year divided by the weighted average number of shares in issue during
the period based on the following:
Profit for the year
Average number of shares in issue
Effect of dilutive options *
Average number of shares in issue plus dilutive options
Basic earnings per share
Diluted earnings per share
2015
2014
£352,000
£11,000
15,149,579 15,149,579
-
-
15,149,579 15,149,579
2.32p
0.07p
2.32p
0.07p
* The share options have no dilutive effect in either the current or previous years. Potentially dilutive share options are disclosed in note 20.
11. Intangible assets
Group and company
Cost
At 31 March 2013
Disposals
At 31 March 2014
Additions
Disposals
At 31 March 2015
Accumulated amortisation/impairment
At 31 March 2013
Charge for the year
Disposals
At 31 March 2014
Charge for the year
Disposals
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
34 | Triad Group Plc Annual Report and Accounts 2015
Purchased
Internally
software developed
software
£’000
£’000
635
(10)
625
10
(371)
1,576
(466)
1,110
-
-
Total
£’000
2,211
(476)
1,735
10
(371)
264
1,110
1,374
599
21
(10)
610
16
(371)
1,405
34
(466)
973
34
-
255
1,007
9
15
103
137
2,004
55
(476)
1,583
50
(371)
1,262
112
152
Notes to the financial statements for the year ended 31 March 2015
12. Property, plant and equipment
Group and company
Cost
At 31 March 2013
Additions
Disposals
At 31 March 2014
Additions
Disposals
At 31 March 2015
Accumulated depreciation
At 31 March 2013
Charge for the year
Disposals
At 31 March 2014
Charge for the year
Disposals
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
Computer
hardware
£’000
Fixtures
& fittings
£’000
Motor
vehicles
£’000
Total
£’000
550
14
(262)
302
37
(37)
302
531
11
(262)
280
13
(37)
256
964
-
-
964
60
(318)
706
957
2
-
959
9
(318)
650
25
38
(21)
1,539
52
(283)
42
1,308
-
-
97
(355)
42
1,050
25
7
(21)
11
9
-
20
1,513
20
(283)
1,250
31
(355)
926
46
22
56
5
22
31
124
58
The net carrying amount of property, plant and equipment includes £22,000 (2014: £31,000) in respect of assets held under finance leases.
Triad Group Plc Annual Report and Accounts 2015 | 35
Notes to the financial statements for the year ended 31 March 2015
13. Investments
Company
Investments are:
(a) Generic Software Consultants Limited (“Generic”), a 100% subsidiary undertaking, in respect of both voting rights and issued shares,
which is registered in England and Wales and has an issued share capital of 5,610 US$1 ordinary shares. The investment is stated in
the Company’s books at £440.
Up to 31 March 2009 Generic acted as an agent for the business, but did not enter into any transactions in its own right: its business
was included within the figures reported by the Company. On 1 April 2009 the agency agreement was terminated and all business is
now conducted directly by the parent company through its Generic business.
(b) Triad Special Systems Limited, Generic Online Limited, Zubed Geospatial Limited, Zubed Sales Limited, are all 100% subsidiaries
which are registered in England and Wales. They are dormant companies, which have never traded. Each has a share capital of £1.
14. Trade and other receivables
Group and company
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables-net
Accrued income
Prepayments
2015
£’000
2014
£’000
3,448
2,944
(28)
-
3,420
2,944
411
180
258
234
4,011
3,436
The fair value of trade and other receivables approximates closely to their book value.
Trade receivables are normally on 30 days payment terms. As at 31 March 2015 trade receivables of £850,000 (2014: £727,000) were
past due but not impaired. They relate to customers with no default history. The total number of customer ledger balances at 31 March
2015 was 73 (2014: 90). The ageing analysis of these receivables is as follows:
Group and company
Up to 30 days past due
30 to 60 days past due
Over 60 days past due
36 | Triad Group Plc Annual Report and Accounts 2015
2015
£’000
2014
£’000
617
204
29
850
572
120
35
727
Notes to the financial statements for the year ended 31 March 2015
Movements on the provision for impairment of trade receivables is as follows:
Group and company
At beginning of the year
Charged to income statement
Credited to income statement
At end of the year
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:
Group and company
Sterling
Euros
Debtor days are calculated by matching year end debtor balances to most recent sales on a day by day basis.
15. Cash and cash equivalents
Group and company
Cash available on demand
The fair value of cash and cash equivalents approximates closely to their book value.
The carrying amount of the Group’s cash and cash equivalents is denominated in the following currencies:
Group and company
Sterling
Euros
2015
£’000
2014
£’000
-
28
-
28
12
-
(12)
-
2015
£’000
3,812
19
2014
£’000
3,072
130
3,831
3,202
2015
£’000
2014
£’000
390
108
2015
£’000
2014
£’000
324
66
98
10
390
108
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash, as detailed above, net of bank
borrowings repayable on demand.
Group and company
Cash available on demand
Bank borrowings repayable on demand
2015
£’000
390
-
390
2014
£’000
108
(104)
4
Triad Group Plc Annual Report and Accounts 2015 | 37
Notes to the financial statements for the year ended 31 March 2015
16. Trade and other payables
Trade payables
Accruals
Owed to subsidiary
Deferred income
Other taxation and social security
The maturity date of trade and other payables is as follows:
Up to 3 months
3 to 6 months
6 to 12 months
The fair value of trade and other payables approximates closely to their book value.
The carrying amount of trade and other payables is denominated in the following currencies:
Sterling
Euros
Group
Company
2015
£’000
2014
£’000
2015
£’000
2014
£’000
1,889
1,586
1,889
1,586
692
-
307
-
692
5
307
5
2,581
1,893
2,586
1,898
142
410
145
317
142
410
145
317
3,133
2,355
3,138
2,360
Group
Company
2015
£’000
2014
£’000
2015
£’000
2014
£’000
2,452
1,802
2,457
1,807
33
96
33
58
33
96
33
58
2,581
1,893
2,586
1,898
Group
Company
2015
£’000
2014
£’000
2015
£’000
2014
£’000
2,553
1,795
2,558
1,800
28
98
28
98
2,581
1,893
2,586
1,898
38 | Triad Group Plc Annual Report and Accounts 2015
Notes to the financial statements for the year ended 31 March 2015
17. Financial liabilities
Group and company
Current
Bank borrowings
Finance lease obligations
Non-current
Finance lease obligations
2015
£’000
2014
£’000
-
6
6
104
5
109
18
24
The fair value of bank borrowings approximates closely to their book value.
The carrying amount of the Group’s financial liabilities is all denominated in sterling.
Bank borrowings are in the form of a receivables finance facility to borrow an amount up to 90% of approved trade debtors subject to a
maximum limit of £2m. This facility is secured by way of a debenture over all assets, being £4.6m at 31 March 2015. Bank borrowings
are repayable upon demand.
The receivables finance facility is included as part of cash and cash equivalents for the purpose of the cash flow statement as it forms an
integral part of the Group’s cash management.
18. Provisions
Group and company
At 1 April 2014
Charged to income statement
Utilised in year
Unused amounts reversed
Unwinding of discount: passage of time (note 6)
At 31 March 2015
Provision for
vacant
properties
Provision for
Total
property
dilapidation
£’000
£’000
£’000
728
-
(206)
-
87
609
59
24
(6)
(45)
-
787
24
(212)
(45)
87
32
641
The discount rate applied in the calculation of the provision for vacant properties is 6.44% (2014: 12%).
Triad Group Plc Annual Report and Accounts 2015 | 39
Notes to the financial statements for the year ended 31 March 2015
Group and company
The maturity profile of the present value of provisions is as follows:
Current
Non-current
Provision for
vacant
properties
Provision for
Total
property
dilapidation
£’000
£’000
£’000
225
384
609
23
9
32
248
393
641
The provision for vacant properties covers the anticipated future costs of rent, rates and other outgoings in respect of unoccupied
property, less anticipated future rental income. It has been calculated on the basis of when the property is anticipated to be sub-let.
These liabilities have been discounted therefore there is no material difference between the value of the provision recorded in the
accounts and the fair value. The maturity profile of the carrying amount of this provision as at 31 March 2015 is as follows:
Group and company
In one year or less
In more than one year, but not more than 2 years
In more than 2 years, but not more than 5 years
2015
£’000
2014
£’000
225
202
182
609
184
201
343
728
The provision for property dilapidation covers the estimated future costs required to meet obligations under property leases to redecorate
and repair property.
19. Share capital
Ordinary shares of 1p each
Issued, called up and fully paid:
Number
Nominal value
Authorised:
Number
Nominal value
40 | Triad Group Plc Annual Report and Accounts 2015
2015
2014
15,149,579
15,149,579
£151,496
£151,496
33,500,000
33,500,000
£335,000
£335,000
Notes to the financial statements for the year ended 31 March 2015
20. Share-based payments
At 31 March 2015 1,476,000 options granted under employee share option schemes remain outstanding:
Number
178,000
138,000
755,000
405,000
Exercise price
Performance criteria
Period options exercisable
51.5p
14.0p
13.5p
11.0p
1
1
1
1
8 March 2009 to 8 March 2016
7 August 2012 to 7 August 2018
23 September 2014 to 23 September 2021
18 September 2017 to 18 September 2024
1 Performance criteria: that, the Company shall have achieved a positive basic earnings per share (subject to adjustment to exclude
identified exceptional items), as reported in its audited annual accounts, in any financial year commencing at least one year after the date
of grant.
The options outstanding at 31 March 2015 had a weighted average remaining contractual life of 6.4 years (2014: 6.2 years).
Options have been valued using the Black-Scholes option-pricing model. No performance conditions were included in the fair value
calculations.
There were 405,000 options granted during the year (2014: nil).
In respect of the options granted during the year the fair value per option granted and the assumptions used in the calculation were as
follows;
Date of grant:
Number of options granted:
Weighted average share price:
Weighted average exercise price:
Expected volatility:
Expected life:
Risk free rate:
Expected dividends:
Fair value:
18 September 2014
405,000
11p
11p
40%
4 years
2.5%
0
3.80p
Triad Group Plc Annual Report and Accounts 2015 | 41
Notes to the financial statements for the year ended 31 March 2015
The expected volatility is based on historic volatility over the last three years. The expected life is the expected period to exercise. The risk
free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.
The total expense recognised in the year is £8,000 (2014: £12,000).
A reconciliation of option movements over the year to 31 March 2015 is shown below:
Number
of options
2015
Weighted
average
exercise price
Pence
Number
of options
2014
Weighted
average
exercise price
Pence
Outstanding at start of year
1,183,000
19.7
1,384,000
Granted
Forfeited
405,000
11.0
-
(112,000)
17.7
(201,000)
Outstanding at end of year
1,476,000
17.4
1,183,000
Exercisable at end of year
1,071,000
19.9
348,000
19.0
-
14.7
19.7
34.5
There were no options exercised during the year. The above figures include options held by Directors which are set out in the Directors’
Remuneration Report on page 17.
21. Commitments
The Group had capital commitments totalling £nil at 31 March 2015 (31 March 2014: £nil).
The future aggregate minimum lease payments under non-cancellable operating leases are:
Not later than 1 year
Later than 1 year and no later than 5 years
22. Related party transactions
2015
£’000
512
1,237
1,749
2014
£’000
443
1,185
1,628
The Group rents two of its offices under contracts expiring in 2018. The current annual rents of £395,000 were fixed, by independent
valuation, for a five year period at the last rent review in 2008. A rent holiday was agreed with the landlords for one of the offices for a period
of one year commencing from 25 June 2013. The rent payable during the period was £350,000. JC Rigg, a Director, has notified the Board
that he has a 50% beneficial interest in these contracts. The balance owed at the year end was £nil (2014: £nil).
Key management comprises the Board of Directors and their remuneration is set out in the Directors’ Remuneration Report on page 16.
42 | Triad Group Plc Annual Report and Accounts 2015
Five year record
Consolidated income statement
Years ended 31 March
Revenue
Gross profit
Profit/(loss) on ordinary activities before taxation
Taxation on loss on ordinary activities
Profit/(loss) on ordinary activities after taxation
Dividends
Retained profit/(sustained loss) for the financial year
Basic profit/( loss) per ordinary share of 1p each (pence)
Balance sheet
As at 31 March
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Share capital
Share premium account
Capital redemption reserve
Retained earnings
2015
£’000
2014
£’000
2013
£’000
2012
£’000
2011
£’000
23,482
19,702
18,880
19,447
23,298
3,325
2,863
2,704
3,239
352
-
352
-
352
2.32
11
-
11
-
11
28
-
28
-
28
0.07
0.18
(76)
277
201
-
201
1.33
2015
£’000
2014
£’000
2013
£’000
2012
£’000
236
210
233
291
4,401
3,544
3,343
4,491
3,644
(920)
-
(920)
-
(920)
(6.07)
2011
£’000
484
4,582
(3,387)
(2,705)
(2,513)
(3,474)
(3,842)
(411)
(570)
(665)
(948)
(1,071)
839
479
398
360
151
562
104
22
151
562
104
151
562
104
151
562
104
(338)
(419)
(457)
(664)
153
151
562
104
Equity shareholders’ funds
839
479
398
360
153
Triad Group Plc Annual Report and Accounts 2015 | 43
Shareholders’ information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you
have any questions about your personal holding of the Company’s
shares, please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0871 384 2486.
Calls to this number are charged at 8p per minute plus network
extras. Lines are open 8:30 am to 5:30 pm, Monday to Friday,
excluding UK public holidays.
Telephone: +44 (0)121 415 7047, if calling from outside the UK.
If you change your name or address or if the details on the envelope
enclosing the report, including your postcode, are incorrect or
incomplete, please notify the registrar in writing.
Shareholders’ enquiries
If you have an enquiry about the Group’s business, or about
something affecting you as a shareholder (other than queries which
are dealt with by the registrar) you should contact the Company
Secretary, by letter or telephone at the Company’s registered office.
Company Secretary and registered office:
Nick Burrows
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01483 860222
Email:
Website:
investors@triad.co.uk
www.triad.co.uk
Financial calendar
Annual General Meeting
Summer 2015
Financial year ended 31 March 2016: expected
announcement of results
Half year
November 2015
Full year preliminary announcement
June 2016
44 | Triad Group Plc Annual Report and Accounts 2015
Corporate information
Executive Directors
John Rigg, Chairman
Nick Burrows
Adrian Leer (appointed 3 March 2015)
Non-executive Directors
Alistair Fulton
Steven Sanderson
Secretary and registered office
Nick Burrows
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01483 860222
Email:
investors@triad.co.uk
Website: www.triad.co.uk
Country of incorporation and domicile
of parent company
United Kingdom
Legal form
Public limited company
Company number
2285049
Registered Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Allen & Overy LLP
One Bishops Square
London
E1 6AO
Bankers
Lloyds Bank plc
City Office
11-15 Monument Street
London
EC3V 9JA
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Triad Group Plc Annual Report and Accounts 2015 | 45
TRIAD GROUP PLC
Annual Report and Accounts
5
1
/
4
1
Godalming office:
Weyside Park
Catteshall Lane
Godalming
Surrey GU7 1XE
01483 860222
Milton Keynes office:
37 Sunningdale House
Caldecotte Lake Business Park
Milton Keynes MK7 8LF
01908 278450
triad.co.uk