Triad Group Plc
Annual Report & Accounts
2 0 1 5 –1 6
Table of contents
Triad Group Plc | Annual report for the year ended 31 March 2016
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43
44
45
Strategic report
Directors’ report
Corporate governance report
Directors’ remuneration report
Independent auditors’ report to the members of Triad Group Plc
Statements of comprehensive income and expense
Statements of changes in equity
Statements of financial position
Statements of cash flows
Notes to the financial statements
Five year record
Shareholders’ information and financial calendar
Corporate information
Strategic report
Financial highlights
• Revenue for the year ended 31 March 2016: £28.3m
(2015: £23.5m)
• Profit before tax: £0.86m (2015: £0.35m)
• Earnings before interest, tax, depreciation and
amortisation (EBITDA): £1.13m (2015: £0.54m)
• Profit after tax: £1.21m (2015: £0.35m)
• Gross profit as a percentage of revenue: 15.0%
(2015: 14.1%)
Chairman’s statement
Dr John Rigg, Executive Chairman
I am very pleased to report that the Group has built on the
progress announced in the last interim results, delivering
further growth in revenue and profit. Our improved business
model has resulted in a significant increase in Triad teams
of permanently employed consultants, associates and
contractors delivering services to a growing number of key
clients. This has generated a stronger and more balanced
client portfolio and sales pipeline.
We believe that we are now in a position to undertake
a significant strengthening of our base of permanently
employed consultants. To this end, the numbers of
permanent employees will be increased in order that the
Group can receive the benefit of the natural longevity of
their relationship with the Group, underpinned by contracts
of permanent employment, share options and other
benefits. Without altering the final price and therefore
attractiveness of our offering to the client, this will enable
the Group to retain a significantly higher proportion
of gross profits. We also intend to move towards
strengthening of top management in the area of permanent
consultant operations. The public image of our permanent
consultant operation will be significantly enhanced by
attention to our marketing activities.
For the year to 31 March 2016 Group revenue has
increased by 20.6% to £28.32m (2015: £23.48m). The
Group reports a profit before tax in the year of £0.86m
(2015: £0.35m), an increase of 145.2%. Profit after tax has
increased to £1.21m (2015: £0.35m). Included in this figure
is a £0.35m credit in recognition of a deferred tax asset
relating to historical trading losses brought forward.
Our footprint across the public and private sectors has
expanded, with new clients including UK Export Finance,
Department for Business, Innovation & Skills and Highways
England. In addition, we have been awarded new contracts
to deliver additional services to long established clients
including Home Office, Ministry of Justice, and IMServ.
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| Triad Group Plc Annual Report and Accounts 2016
We have also secured substantial increases in the call-
off limits for two of our central government contracts,
providing us good visibility of potential work in to the next
financial year.
Contract renewals and extensions are a key indicator
of success, and the company has been very careful to
maintain its excellent levels of service delivery whilst
growing the business.
During the year the Group was involved in a wide range
of assignments. This range needs to be further expanded
in the coming year. We have been successful in securing
a two-year call-off agreement with an existing Central
Government client, allowing us to provide a range of
resources around delivery management, development and
webops/devops. This represented a substantial win, and
the work we are doing on projects of national importance
has helped us attract some of the country’s leading talent.
Triad consultants developed a new search platform for
the Electoral Commission, enabling interested parties
to interrogate the Party Election Funding database
to understand who has donated what to whom. The
application used pioneering user research techniques to
come up with a very intuitive system that matched the
varied needs of its users, and it was accessed extensively
during the period of the 2015 General Election.
Our involvement with a large central government
department with a nationwide estate continues, helping
them to digitise its services. As well as Agile development
resources, we have also provided the bulk of the platform
engineering team and a number of consultants involved in
the wider programme activities. This on-going relationship
also included tight collaboration with one of the largest
System Integrators in the UK, with Triad being recognised
for its exemplary ability to generate results from this multi-
faceted team.
Frameworks within the public sector remain an important
route to market, and the Group was successful in qualifying
for both the Digital Services Framework 2 (DSF 2) and its
successor, Digital Outcomes and Specialists (DOS). The
advent of DOS within months of DSF 2 illustrates the need
to stay abreast of the Government’s ICT agenda, as did
our successful participation in g-cloud 7. Presence on
these frameworks has been crucial in terms of winning
new business and competing for new services with existing
clients, and Triad has established a significant position
across the Government Digital Marketplace.
In the private sector Triad has reinforced its long-term
relationship with one of the leading providers of GIS
Engineering capability, establishing itself as the preferred
provider of resources.
Strategic report
We have also been working with a long-standing client to
develop a new platform for end-clients to use in relation to
their energy consumption. This project is in its early stages
and has significant on-going potential.
Triad has been successfully raising its profile throughout
the year. Our presence on a number of key programmes
has been the significant driver in this, together with our
contribution at events including the Government Digital
Services roadshow to promote DSF and g-cloud, and at
a presentation run by the Association for Geographic
Information (AGI) promoting careers in GIS for young people.
Outlook
Further to the progress achieved during the year we have
started the new financial year with a strong order book and
healthy pipeline of opportunities. Underpinning the Group’s
success will be our ability to develop new and existing
accounts and deliver successful outcomes for our clients.
In order to capitalise on the opportunities being developed
efforts to strengthen our business model continue. A key
aspect is the need to increase the headcount across the
business.
Employees
On behalf of the Board I would like to thank all our staff for
their efforts during the past year.
John Rigg
Chairman
10 June 2016
Organisation overview
Triad Group Plc is engaged in the provision of IT
resourcing, consultancy and solutions services to the
public and private sectors.
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.
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.
Triad Group Plc Annual Report and Accounts 2016
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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.
• 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 provision of IT consultancy and solutions
services, and IT resourcing (both contract and permanent).
Typically, this entails the supply of our own permanent
consultants, the supply of carefully chosen associates and
contractors, or a combination of these.
The Group operates in the United Kingdom from offices in
Godalming (registered office) and Milton Keynes.
Principal risks and uncertainties
The Group’s business involves risks and uncertainties,
which the Board systematically manages through its
planning and governance processes.
The Board carries out a robust assessment of the principal
risks facing the Group on an annual basis, examining the
Group’s operating environment, scanning for potential
risks to the health and wellbeing of the organisation. The
Directors factor into the business plan the likelihood and
magnitude of risk in determining the achievability of the
operational objectives. Where feasible, preventive and
mitigating actions are developed for all principal risks.
Senior management review the risk register and track the
status of these risk factors on an on-going basis, identifying
any emerging risks as they appear.
The outputs of this management review form part of
the Board’s governance process, reviewed at regular
Board meetings.
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| Triad Group Plc Annual Report and Accounts 2016
The principal risks identified are:
IT services market
The demand for IT services is affected by UK market
conditions. The creation of new services, acquisition of new
clients and the development of new commercial vehicles
is important in protecting the Group from fluctuations in
market conditions.
Revenue visibility
The pipeline of contracted orders for time and materials
consultancy work can be 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
appropriately skilled resources are key to ensuring the
ability to win and deliver IT services to our clients. The
Group continues to recruit quality individuals, and ensures a
resilient network of associate resources is maintained.
Competition
The Group operates in a highly competitive environment.
The markets in which the Group operates are continually
monitored to respond effectively to emerging opportunities
and threats.
There are or may be other risks and uncertainties faced
by the Group that the Directors currently deem immaterial,
or of which they are unaware, that may have a material
adverse impact on the Group.
Viability Statement
In accordance with provision C.2.2 of the 2014 Corporate
Governance Code the Directors have assessed the
Company’s viability over the next five financial years.
This assessment of viability has been made with reference
to the Group’s current financial and operational positions,
revenue projections, cash flows, availability of required
finance, commercial opportunities and threats, and the
Group’s experience in managing adverse conditions in the
past. The Company was founded in 1988 and has survived
successfully since then.
The assessment also considered the impact of severe, yet
plausible, scenarios based on the principal risks set out
above. Sensitivities around revenue growth, gross margins,
and availability of funds to meet operational requirements
were considered.
Based on this assessment the Directors have concluded
that there is a reasonable expectation that the Company
and Group will continue in operation and meet its liabilities
as they fall due over the next five years.
Strategic report
Given the Group’s business model and commercial and
financial exposures the Directors consider that five years
is an appropriate period for the assessment. The maximum
period of visibility of commercial arrangements with
clients is currently two years, however in considering the
assessment period assumptions have been made beyond
this immediate timeframe.
Directors
Senior managers
Employees
Male
Female
Total
5
1
36
42
—
1
12
13
5
2
48
55
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 2015 to 31 March 2016 in tonnes of carbon
dioxide equivalents (tCO2e) is shown in the table below.
Emission source:
Combustion of fuel
Electricity and heat
purchased for own use
Total
tCO2e per £1m revenue
2016
tCO2e *
2015
tCO2e *
23
91
114
4.0
25
109
134
5.7
* The calculation of tCO2e for each source has been prepared
in accordance with DEFRA guidelines for GHG reporting.
Social, community and human rights issues
We do not report on social, community and human rights
issues as the Group has no significant matters to report
that would be required to understand the performance of
the Group’s business.
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. The outlook for the Group is
discussed in the Chairman’s statement on page 2.
The KPIs are as follows;
2016
2015
Revenue
£28,317,000
£23,482,000
Profit from operations
£980,000
£462,000
Earnings before interest,
tax, depreciation and
amortisation (EBITDA)
Gross margin
Average headcount
£1,133,000
£543,000
15.0%
52
14.1%
52
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 gender, 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. 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 2016 were directors, senior
managers or employees of the Company.
Triad Group Plc Annual Report and Accounts 2016
| 5
Intangible assets
Amortisation relating to the internally developed software,
Zubed was £0.03m (2015: £0.03m). An impairment charge
of £0.07m has been recognised in the year further to a
review undertaken at the year end. This has resulted in the
Zubed intangible asset being written down to £nil (2015:
£0.10m). There were no development costs capitalised
during the year (2015: £nil).
Net assets
The net asset position of the Group at 31 March 2016 was
£2,056,000 (2015: £839,000). The increase over the year
was due to the profit for the year.
Share options
No options were granted during the year. An expense of
£4,438 (2015: £8,229) has been recognised in the year
relating to options granted in September 2014.
By order of the Board
Nick Burrows
Finance Director
10 June 2016
Strategic report
Financial review
Group performance
The Group reports the following results for the financial
year ended 31 March 2016:
Group revenue has increased to £28.3m (2015: £23.5m)
primarily due to growth in key accounts and an increase in
the length of client engagements.
The Group reports an increase in profit from operations
to £0.98m (2015: £0.46m). Earnings before interest, tax,
depreciation and amortisation (EBITDA) is £1.13m (2015:
£0.54m). The Group reports a profit after tax of £1.21m
(2015: £0.35m). Included in this figure is a £0.35m credit
in recognition of a deferred tax asset relating to historical
trading losses brought forward.
Gross margin has increased to 15.0% (2015: 14.1%). The
unified business model is enabling the Group to undertake
more profitable projects in terms of the number of assigned
staff, the rates charged, and assignment duration.
Cash and cash equivalents at the year-end have increased
to £955,000 (2015: £390,000).
Overheads
Administrative expenses for the year have increased to
£3.26m (2015: £2.85m). This is further to increases in staff
costs, additional dilapidation provisions (see note 18) and
the impairment charge relating to intangible assets (see
below). There has also been an increase in marketing,
recruitment and training costs associated with the
increased activity across the business.
Staff costs have increased to £3.67m (2015: £3.40m).
The average headcount for the year is unchanged at 52
(2015: 52), however strengthening our teams remains a top
priority for the business.
Cash flows
Cash and cash equivalents at 31 March 2016 stood at
£955,000 (2015: £390,000). There was a net cash inflow
from operating activities of £621,000 (2015: £498,000).
The net cash outflow from investing activities was £50,000
(2015: £107,000).
Tangible assets
Tangible assets were purchased totalling £42,000
(2015: £97,000).
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| Triad Group Plc Annual Report and Accounts 2016
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 2016. 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 2016, 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.
Amendment of the Company’s Articles of Association
The Company’s Articles may only be amended by a special
resolution passed at a general meeting of shareholders.
Triad Group Plc Annual Report and Accounts 2016
| 7
Directors' Report
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 2016
and at 1 June 2016, being the latest practicable date prior
to the publication of this annual report and accounts:
Percentage of issued share capital
31 March 2016
1 June 2016
M Makar
29.76%
29.76%
Liontrust Investment
Services Ltd
The Chatham Trust
T Charlton
Dividends
9.61%
4.46%
3.20%
9.61%
4.46%
4.19%
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 2016 (2015: 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.
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.
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| Triad Group Plc Annual Report and Accounts 2016
Directors' Report
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.
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.
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.
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.
In preparing these financial statements, the Directors are
required to:
By order of the Board
•
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.
Nick Burrows
Company Secretary
10 June 2016
Triad Group Plc Annual Report and Accounts 2016
| 9
Corporate governance report
The Board has considered the principles and provisions
of the UK Corporate Governance Code 2014 (“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
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.
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| Triad Group Plc Annual Report and Accounts 2016
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
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, he became General Manager of Zubed Geospatial.
In 2012 Adrian became Commercial Director of Triad
Consulting & Solutions.
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
Corporate governance report
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.
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 2016 and shows that the Board are able to
allocate sufficient time to the company to discharge their
responsibilities effectively.
Board
Audit
Committee
Remuneration
Committee
Number of meetings held
11
2
Number of meetings
attended
Executive Directors:
John Rigg (Chairman)
Nick Burrows
Adrian Leer
Non-executive Directors:
Alistair Fulton
Steven Sanderson
11
11
11
10
11
2
n/a
n/a
2
2
1
1
n/a
n/a
1
1
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 during, and active at the end of, the financial year
to ensure revenue has been recognised correctly.
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.
Triad Group Plc Annual Report and Accounts 2016
|
11
Corporate governance report
Effectiveness of external audit process
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.
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.
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.
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.
12
| Triad Group Plc Annual Report and Accounts 2016
Corporate governance report
Remuneration Committee
Statement of compliance
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.
The Board considers that it has been compliant with the
provisions of the Code for the whole of the period, except
as detailed below:
A.2.1
B.2.1/2.4
B.6
B.2.3
B.7.1
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.
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.
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.
Terms of reference
The terms of reference of the Audit and Remuneration
Committees are available on request from the Company
Secretary.
By order of the Board
Nick Burrows
Company Secretary
10 June 2016
Triad Group Plc Annual Report and Accounts 2016
|
13
Directors’ Remuneration report
On the following pages we set out the Remuneration Report for the year ended 31 March 2016. The members of the
Remuneration Committee are shown in the Corporate Governance Report on page 11.
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 2015 Annual General Meeting of the Company and was approved by
100% of shareholders. There is no requirement to vote on the policy in 2016 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
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.
Operation
Maximum payable
Performance metrics
None, although individual
performance is
considered when setting
salary levels.
None.
Ordinarily, salary
increases will be in
line with average
increases awarded to
other employees in the
Company.
Benefits are set at a
level considered to
be appropriate taking
into account individual
circumstances.
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.
Pension
Provides competitive
post-retirement benefits
to support the recruitment
and retention of Executive
Directors.
The Company pays
contributions into a
personal pension scheme
or cash alternative.
The Company matches
individual contributions up
to a maximum of 5%.
None.
Share option
scheme
Encourages share
ownership amongst
employees and aligns
their interests with the
shareholders.
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 2016
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
Performance metrics
Reviewed annually
Not applicable.
In general, the level of fee
increase for the non-
executive directors will be
set taking account of any
change in responsibility.
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.
Triad Group Plc Annual Report and Accounts 2016
|
15
Directors’ Remuneration report
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.
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. As with employees elsewhere in the Group there were no substantial
increases 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 2015.
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:
2016
Director
Basic salary & fees
Benefits in kind
£’000
£’000
Pension
£’000
Total
£’000
Executive
J C Rigg
N E Burrows
A Leer
Non-executive
A M Fulton
S M Sanderson
25
91
99
25
20
—
12
8
—
—
—
18
9
—
—
25
121
116
25
20
16
| Triad Group Plc Annual Report and Accounts 2016
Directors’ Remuneration report
Director
Basic salary & fees
Benefits in kind
£’000
£’000
Pension
£’000
Total
£’000
2015
Executive
J C Rigg
N E Burrows
A Leer (appointed 3 March 2015)
Non-executive
A M Fulton
S M Sanderson
25
91
8
25
20
—
11
1
—
—
—
16
1
—
—
25
118
10
25
20
Benefits in kind include the provision of company car and medical insurance.
Pension includes a 5% employer contribution together with contributions made under a employee salary sacrifice scheme.
No performance measures or targets were in place for either the year ended 31 March 2016, 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.
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
1 April 2015
354,100
4,509,400
104,089
7,893
5,379
31 March 2016
354,100
4,509,400
104,089
7,893
5,379
Triad Group Plc Annual Report and Accounts 2016
|
17
Directors’ Remuneration report
Directors’ share options
The interests of executive Directors in share options were as follows:
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
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
320,000
—
—
—
—
—
—
—
(20,000)
—
—
—
—
—
—
25,000
100,000
25,000
50,000
100,000
(20,000)
300,000
51.5p
14.0p
13.5p
11.0p
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
23.09.14 to 23.09.21
18.09.17 to 18.09.24
175,000 share options were exercisable at the end of the year (2015: 195,000)
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 £1,585 (2015: £1,005).
The market price of the Company’s shares was 29p at 31 March 2016 and the range during the year was between 11p and 41p.
18
| Triad Group Plc Annual Report and Accounts 2016
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
Triad
x
e
d
n
I
200
180
160
140
120
100
80
60
40
20
—
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
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 (2015: £nil). The total employee
remuneration (including directors) during the year was £3.308m (2015: £3.045m).
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 2016 Annual Report and Accounts.
Statement of voting at last general meeting
At the last annual general meeting the Directors’ Remuneration Report was approved with 78.17% of votes cast in favour of
the resolution. There were 4,520,451 votes withheld.
Alistair Fulton
Chairman, Remuneration Committee
10 June 2016
Triad Group Plc Annual Report and Accounts 2016
|
19
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 2016 and of the Group’s and Parent’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; 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 2016 comprise:
• The Group and Parent Company statement of comprehensive income;
• The Group and Parent Company statements of financial position;
• The Group and Parent Company statements of changes in equity;
• The Group and Parent Company statements of cash flows; 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.
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 £282,000, which approximates to 1% of revenues.
20
| Triad Group Plc Annual Report and Accounts 2016
Independent auditors’ report to the members of Triad Group Plc
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £6,000
as well as misstatements below that amount that in our view warranted reporting for qualitative reasons.
An overview of the scope of our audit
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. Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the
Group’s system of internal control, and assessing the risks of material misstatement in the financial statements at the Group level.
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 risks 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 risk 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
Revenue is predominantly recognised on an approved timecard
basis and we consider there to be a significant risk over the
completeness of revenue due to missing or late timecards or
contractor invoices.
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 consider this risk could lead
to inappropriate manual journals being posted around the year
end to incorrectly defer or accrue revenue.
Our procedures included understanding and testing the controls
in respect of billing from approved timecards and testing the
revenue recognised in the period.
We substantively tested a sample of sales invoices to approved
timecard and agreed revenue recognised.
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 costs and deferred
revenue.
We have reviewed and considered all material or unexpected
journals posted to revenue during the year.
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.
Triad Group Plc Annual Report and Accounts 2016
| 21
Independent auditors’ report to the members of Triad Group Plc
Statement regarding the directors’ assessment of principal risks, going concern and longer term viability of the company
We have nothing material to add or to draw attention to in relation to:
•
•
•
•
the directors’ confirmation in the annual report that they have carried out a robust assessment of the principal risks
facing the entity, including those that would threaten its business model, future performance, solvency or liquidity;
the disclosures in the annual report that describe those risks and explain how they are being managed or mitigated;
the directors’ statement in the financial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them and their identification of any material uncertainties to the entity’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements; or
the directors’ explanation in the annual report as to how they have assessed the prospects of the entity, over what
period they have done so and why they consider that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the entity will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications
or assumptions.
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’ statements, set out on pages 4 and 8, in relation to going concern and in relation to longer-term viability; 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 nothing to report in respect of these matters.
Anna Draper (senior statutory auditor)
10 June 2016
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
22
| Triad Group Plc Annual Report and Accounts 2016
Statements of comprehensive income and expense
for the year ended 31 March 2016
Group and Company
Note
Revenue
Cost of sales
Gross profit
Administrative expenses
Profit from operations
Finance expense
Finance income
Profit before tax
Tax credit
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.
5
6
8
10
10
2016
£’000
28,317
(24,081)
4,236
(3,256)
980
(118)
1
863
350
1,213
8.01p
7.72p
2015
£’000
23,482
(20,171)
3,311
(2,849)
462
(110)
—
352
—
352
2.32p
2.32p
Triad Group Plc Annual Report and Accounts 2016
| 23
Statements of changes in equity for the year ended 31 March 2016
Group
At 1 April 2014
Profit for the year and total
comprehensive income
Share-based payments
At 1 April 2015
Profit for the year and total
comprehensive income
Share-based payments
At 31 March 2016
Company
At 1 April 2014
Profit for the year and total
comprehensive income
Share-based payments
At 1 April 2015
Profit for the year and total
comprehensive income
Share-based payments
At 31 March 2016
Share
Capital
£’000
151
—
—
151
—
—
151
Share
Capital
£’000
151
—
—
151
—
—
151
Share
premium
account
Capital
redemption
reserve
£’000
562
£’000
104
—
—
562
—
—
562
—
—
104
—
—
104
Share
premium
account
Capital
redemption
reserve
£’000
562
£’000
104
—
—
562
—
—
562
—
—
104
—
—
104
Retained
earnings
Total
£’000
(338)
352
8
22
1,213
4
£’000
479
352
8
839
1,213
4
1,239
2,056
Retained
earnings
Total
£’000
(343)
352
8
17
1,213
4
1,234
£’000
474
352
8
834
1,213
4
2,051
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.
24
| Triad Group Plc Annual Report and Accounts 2016
Statements of financial position at 31 March 2016
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax
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
Note
11
12
8
14
15
16
17
18
17
18
19
Group
Company
2016
£’000
13
120
350
483
4,683
955
5,638
6,121
2015
£’000
112
124
—
236
4,011
390
4,401
4,637
2016
£’000
13
120
350
483
4,683
955
5,638
6,121
2015
£’000
112
124
—
236
4,011
390
4,401
4,637
(3,496)
(3,133)
(3,501)
(3,138)
(7)
(254)
(6)
(248)
(7)
(254)
(6)
(248)
(3,757)
(3,387)
(3,762)
(3,392)
(11)
(297)
(308)
(18)
(393)
(411)
(11)
(297)
(308)
(18)
(393)
(411)
(4,065)
(3,798)
(4,070)
(3,803)
2,056
839
2,051
834
151
562
104
1,239
2,056
151
562
104
22
839
151
562
104
1,234
2,051
151
562
104
17
834
The financial statements on pages 23 to 42 were approved by the Board of Directors and authorised for issue on 10 June
2016 and were signed on its behalf by:
Nick Burrows
Director
Alistair Fulton
Director
Triad Group Plc is registered in England and Wales with registered number 2285049.
Triad Group Plc Annual Report and Accounts 2016
| 25
Statements of cash flows for the year ended 31 March 2016
Group and company
Note
Cash flows from operating activities
Profit for the year before taxation
Adjustments for:
Depreciation of property, plant and equipment
Amortisation/impairment of intangible assets
Interest expense
Share-based payment expense
Changes in working capital
Increase in trade and other receivables
Increase in trade and other payables
Decrease in provisions
Cash generated by operations
Interest paid
Net cash flows from operating activities
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cash used in investing activities
Financing activities
Finance lease principal payments
Net cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
15
2016
£’000
863
46
107
10
4
(672)
363
(90)
631
(10)
621
(8)
(42)
(50)
(6)
(6)
565
390
955
2015
£’000
352
31
50
11
8
(575)
778
(146)
509
(11)
498
(10)
(97)
(107)
(5)
(5)
386
4
390
26
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
1. Principal accounting policies
Intangible assets
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.
Expenditure on internally developed products is capitalised
if it can be demonstrated that:
•
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
development;
•
•
•
there is an intention to complete the product and use or
sell it;
it is able to be used or sold;
the product will generate future economic benefits,
internally and/or externally; and
These financial statements have been prepared on a going
concern basis.
• expenditure attributable to the development of the
product can be measured reliably.
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
%
25–33
10–33
25–33
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.
Triad Group Plc Annual Report and Accounts 2016
| 27
Notes to the financial statements for the year ended 31 March 2016
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.
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.
Cash
Exceptional items
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
Trade and other payables are recognised initially at fair
value, and subsequently measured at amortised cost using
the effective interest method.
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.
Borrowings
Taxation
Borrowings are recognised initially at fair value, and
subsequently measured at amortised cost using the
effective interest method.
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.
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 temporary
differences resulting from the difference between the
carrying value of an asset or liability and its tax base, and
on tax losses carried forward indefinitely. 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.
Foreign currencies
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.
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.
28
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
Provisions
Surplus property
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. The Group has provided for property dilapidation and
vacant property as detailed in note 18.
New standards and interpretations
The Group has adopted with effect from 1 April 2015 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.
IFRS 16 was published in January 2016 and will be
effective for the Group from 1 April 2019, replacing IAS
17 ‘Leases’ subject to EU endorsement. The standard
requires lessees to recognise assets and liabilities for
all leases unless the lease term is 12 months or less or
the underlying asset is of low value. The impact of future
adoption of IFRS 16 is under review.
The Directors do not anticipate that the adoption of other
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. 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.
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 £7,000.
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 £232,000.
Deferred tax asset
A deferred tax asset of £350,000 (2015: £nil) has
been recognised in accordance with the accounting
policy on page 28. A deferred tax asset of £1,081,000
(2015: £1,646,000) has not been recognised due to the
assumptions and judgments made by management on the
certainty and timing of future profits.
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.
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
Triad Group Plc Annual Report and Accounts 2016
| 29
Notes to the financial statements for the year ended 31 March 2016
foreign currency are to facilitate day to day transactions.
With a functional currency of sterling there are the
following foreign currency net assets:
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.
Group and company
Note
2016
2015
The Group’s maximum exposure to credit risk is:
£'000
£'000
Note
2016
2015
Currency: Euros
Net cash
Trade and other receivables
Trade and other payables
15
14
16
47
20
(24)
43
66
19
(28)
57
Trade and other receivables
Accrued income
Cash and cash equivalents
14
14
15
£'000
£'000
3,489
3,420
1,036
955
411
390
5,480
4,221
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 (2015: £nil).
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 (2015: £4,000).
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 £12,000 being 0.04%
of revenue (2015: £28,000).
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.
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 £2.5m. 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.
4. Revenue
The Group operates solely in the UK. All material revenues
are generated in the UK.
40% (2015: 26%) of revenue was generated in the public
sector. The largest single customer contributed 24% (2015:
35%) of Group revenue and was in the private sector.
30
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
5. Profit from operations
Profit from operations is stated after charging:
Depreciation of owned assets
Amortisation of intangible assets
Impairment 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
2016
£'000
46
38
69
479
50
12
50
5
2016
£'000
8
2
10
108
—
118
2015
£'000
31
50
—
453
31
28
50
4
2015
£'000
8
3
11
87
12
110
Triad Group Plc Annual Report and Accounts 2016
| 31
Notes to the financial statements for the year ended 31 March 2016
7. Employees and directors
Group and company
Average number of persons (including executive Directors) employed
2016
Number
2015
Number
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
4
26
14
8
52
2016
£'000
3,040
358
264
4
3,666
2016
£'000
280
27
307
Two Directors (2015: one) had retirement benefits accruing under money purchase pension schemes.
8. Tax credit
Current tax
Current tax on profits for the year
Deferred tax
Recognition of previously unrecognised deferred tax asset
Total tax credit for the year
32
| Triad Group Plc Annual Report and Accounts 2016
2016
£'000
—
(350)
(350)
4
24
16
8
52
2015
£'000
2,793
356
244
8
3,401
2015
£'000
181
17
198
2015
£'000
—
—
—
Notes to the financial statements for the year ended 31 March 2016
The differences between the actual tax credit for the year and the standard rate of corporation tax in the UK applied to
profits for the year are as follows:
Profit before tax
Profit before tax multiplied by standard rate of corporation tax in the UK of
20% (2015: 21%)
Effects of:
Expenses not deductible for tax purposes
Brought forward losses utilised against taxable profits
Recognition of previously unrecognised deferred tax asset on losses
Tax credit for the year
Deferred tax asset
The movement is deferred tax is as follows:
At 1 April 2015
Recognised in profit and loss
Recognition of previously unrecognised deferred tax asset on losses
At 31 March 2016
2015
£'000
352
74
1
(75)
—
—
2016
£'000
863
173
24
(197)
(350)
(350)
£'000
—
350
350
Deferred tax assets have been recognised in respect of tax losses where the Directors believe it is probable that the assets
will be recovered. A deferred tax asset amounting to £1,081,000 (2015: £1,646,000) has not been recognised in respect of
trading losses, which can be carried forward indefinitely.
9. Dividends
No dividends have been paid or proposed for year ended 31 March 2016 (2015: nil).
Triad Group Plc Annual Report and Accounts 2016
| 33
Notes to the financial statements for the year ended 31 March 2016
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
2016
£1,213,000
15,149,579
554,919
15,704,498
8.01p
7.72p
2015
£352,000
15,149,579
—
15,149,579
2.32p
2.32p
11. Intangible assets
Group and Company
Cost
At 31 March 2014
Additions
Disposals
At 31 March 2015
Additions
At 31 March 2016
Accumulated amortisation/impairment
At 31 March 2014
Charge for the year
Disposals
At 31 March 2015
Charge for the year
Impairment
At 31 March 2016
Net book value
At 31 March 2016
At 31 March 2015
34
| Triad Group Plc Annual Report and Accounts 2016
Purchased
software
£'000
Internally
developed
software
£'000
625
10
(371)
264
8
272
610
16
(371)
255
4
—
259
13
9
1,110
—
—
1,110
—
1,110
973
34
—
1,007
34
69
1,110
—
103
Total
£'000
1,735
10
(371)
1,374
8
1,382
1,583
50
(371)
1,262
38
69
1,369
13
112
Notes to the financial statements for the year ended 31 March 2016
12. Property, plant and equipment
Group and company
Computer
hardware
£'000
Fixtures
& fittings
£'000
Motor
vehicles
£'000
Total
£'000
Cost
At 31 March 2014
Additions
Disposals
At 31 March 2015
Additions
At 31 March 2016
Accumulated depreciation
At 31 March 2014
Charge for the year
Disposals
At 31 March 2015
Charge for the year
At 31 March 2016
Net book value
At 31 March 2016
At 31 March 2015
302
37
(37)
302
29
331
280
13
(37)
256
21
277
54
46
964
60
(318)
706
13
719
959
9
(318)
650
15
665
54
56
42
—
—
42
-
42
11
9
—
20
10
30
12
22
1,308
97
(355)
1,050
42
1,092
1,250
31
(355)
926
46
972
120
124
The net carrying amount of property, plant and equipment includes £12,000 (2015: £22,000) in respect of assets held under
finance leases.
Triad Group Plc Annual Report and Accounts 2016
| 35
Notes to the financial statements for the year ended 31 March 2016
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
2016
£'000
3,507
(18)
3,489
1,036
158
4,683
2015
£'000
3,448
(28)
3,420
411
180
4,011
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 2016 trade receivables of £603,000 (2015:
£850,000) were past due but not impaired. They relate to customers with no default history. The total number of customer
ledger balances at 31 March 2016 was 65 (2015: 73). 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
2016
£'000
518
63
22
603
2015
£'000
617
204
29
850
36
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
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
2016
£'000
28
12
(22)
18
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:
Group and company
Sterling
Euros
15. Cash and cash equivalents
Group and company
Cash available on demand
2016
£'000
4,505
20
4,525
2016
£'000
955
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
2016
£'000
908
47
955
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.
2015
£'000
—
28
—
28
2015
£'000
3,812
19
3,831
2015
£'000
390
2015
£'000
324
66
390
Triad Group Plc Annual Report and Accounts 2016
| 37
Notes to the financial statements for the year ended 31 March 2016
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
Group
Company
2016
£’000
1,945
968
—
2,913
109
474
3,496
2015
£’000
1,889
692
—
2,581
142
410
3,133
2016
£’000
1,945
968
5
2,918
109
474
3,501
Group
Company
2016
£’000
2,637
156
120
2015
£’000
2,452
33
96
2016
£’000
2,642
156
120
2015
£’000
1,889
692
5
2,586
142
410
3,138
2015
£’000
2,457
33
96
2,913
2,581
2,918
2,586
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
2016
£’000
2,889
24
2,913
2015
£’000
2,553
28
2,581
2016
£’000
2,894
24
2,918
2015
£’000
2,558
28
2,586
38
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
17. Financial liabilities
Group and company
Current
Finance lease obligations
Non-current
Finance lease obligations
2016
£'000
7
11
2015
£'000
6
18
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 £2.5m. This facility is secured by way of a debenture over all the assets of the Group. 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 2015
Charged to income statement
Utilised in year
Unwinding of discount: passage of time (note 6)
At 31 March 2016
Provision for vacant
properties
Provision for property
dilapidation
£’000
609
—
(252)
108
465
£’000
32
54
—
—
86
Total
£’000
641
54
(252)
108
551
The discount rate applied in the calculation of the provision for vacant properties is 5.84% (2015: 6.44%).
Triad Group Plc Annual Report and Accounts 2016
| 39
Notes to the financial statements for the year ended 31 March 2016
Group and company
Provision for vacant
properties
Provision for property
dilapidation
£’000
£’000
The maturity profile of the present value of provisions is as follows:
Current
Non-current
238
227
465
16
70
86
Total
£’000
254
297
551
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 2016 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
2016
£'000
238
227
—
465
2015
£'000
225
202
182
609
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
2016
2015
15,149,579
£151,496
33,500,000
£335,000
15,149,579
£151,496
33,500,000
£335,000
40
| Triad Group Plc Annual Report and Accounts 2016
Notes to the financial statements for the year ended 31 March 2016
20. Share-based payments
At 31 March 2016 1,268,000 options granted under employee share option schemes remain outstanding:
Date option granted
7 August 2008
23 September 2011
18 September 2014
Number
138,000
730,000
400,000
Exercise price
Period options exercisable
14.0p
13.5p
11.0p
7 August 2011 to 7 August 2018
23 September 2014 to 23 September 2021
18 September 2017 to 18 September 2024
Under the terms of the scheme, options vest after after a period of three years continued employment and are subject to the
following performance condition:
In any financial year commencing at least one year after the date of grant, 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.
The options outstanding at 31 March 2016 had a weighted average remaining contractual life of 6.1 years (2015: 6.4 years).
Options have been valued using the Black-Scholes option-pricing model. No performance conditions were included in the
fair value calculations.
There were no options granted during the year (2015: 405,000).
In respect of the options granted last 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
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 £4,000 (2015: £8,000).
Triad Group Plc Annual Report and Accounts 2016
| 41
Notes to the financial statements for the year ended 31 March 2016
A reconciliation of option movements over the year to 31 March 2016 is shown below:
Outstanding at start of year
Granted
Forfeited
Lapsed
Outstanding at end of year
Exercisable at end of year
2016
2015
Number
of options
1,476,000
—
(32,000)
(176,000)
1,268,000
868,000
Number of
options
Weighted
average
exercise
price
Pence
17.4
—
15.5
51.5
12.8
13.6
1,183,000
405,000
(112,000)
—
1,476,000
1,071,000
Weighted
average
exercise
price
Pence
19.7
11.0
17.7
—
17.4
19.9
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 18.
21. Commitments
The Group had capital commitments totalling £nil at 31 March 2016 (31 March 2015: £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
2016
£'000
552
685
1,237
2015
£'000
512
1,237
1,749
22. Related party transactions
The Group rents two of its offices under contracts expiring in 2018. The current annual rents of £395,000 were fixed,
by independent valuation, at the last rent review in 2008. 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 (2015: £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 2016
Five year record
Consolidated income statement
Years ended 31 March
Revenue
Gross profit
Profit/(loss) before tax
Tax credit
Profit after tax
Dividends
Retained profit for the financial year
Basic profit 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
Equity shareholders’ funds
2016
£’000
28,317
4,236
863
350
1,213
—
1,213
8.01
2016
£’000
483
5,638
2015
£’000
23,482
3,325
352
—
352
—
352
2.32
2015
£’000
236
4,401
2014
£’000
19,702
2,863
11
—
11
—
11
2013
£’000
18,880
2,704
28
—
28
—
28
0.07
0.18
2014
£’000
210
3,544
2013
£’000
233
3,343
2012
£’000
19,447
3,239
(76)
277
201
—
201
1.33
2012
£’000
291
4,491
(3,757)
(3,387)
(2,705)
(2,513)
(3,474)
(308)
2,056
151
562
104
1,239
2,056
(411)
839
151
562
104
22
839
(570)
(665)
(948)
479
151
562
104
(338)
479
398
151
562
104
(419)
398
360
151
562
104
(457)
360
Triad Group Plc Annual Report and Accounts 2016
| 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
PO Box 4630
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6QQ
Telephone: 0870 6015366
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:
01908 278450
Email:
investors@triad.co.uk
Website:
www.triad.co.uk
Financial calendar
Annual General Meeting
Summer 2016
Financial year ended 31 March 2017: expected
announcement of results
Half year
November 2016
Full year preliminary
announcement
June 2017
44
| Triad Group Plc Annual Report and Accounts 2016
Corporate information
Executive Directors
John Rigg, Chairman
Nick Burrows
Adrian Leer
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:
01908 278450
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 2016
Triad Group Plc Annual Report and Accounts 2016
| 45
| 45
Godalming office:
Weyside Park
Catteshall Lane
Godalming
Surrey GU7 1XE
Milton Keynes office:
37 Sunningdale House
Caldecotte Lake Business Park
Milton Keynes MK7 8LF
01908 278450
triad.co.uk