2019 2020
TRIAD GROUP PLC / ANNUAL REPORT AND ACCOUNTS
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Financial Highlights:
REVENUE FOR THE YEAR ENDED
31 March 2020:
2019:
£19.4m
(LOSS)/PROFIT BEFORE TAX
31 MARCH 2020:
2019:
£1.0m
(LOSS)/PROFIT AFTER TAX
31 MARCH 2020:
2019:
(£0.8m)
GROSS PROFIT AS A PERCENTAGE OF REVENUE
31 MARCH 2020:
2019:
19.3%
(£0.6m)14.7%£22.7m£0.9m Table of contents
Triad Group Plc | Annual report for the year ended 31 March 2020
02 Strategic report
13 Directors’ report
16 Corporate governance report
22 Directors’ remuneration report
28
Independent auditors’ report to the members of Triad Group Plc
34 Statements of comprehensive income and expense
35 Statements of changes in equity
36 Statements of financial position
37 Statements of cash flows
38 Notes to the financial statements
59 Five year record
60 Shareholders’ information and financial calendar
61 Corporate information
The Board of Directors has been refreshed during the year
following the resignation of Non-Executive Director Steven
Sanderson and Executive Finance Director/Company
Secretary Nick Burrows. I would like to thank both of them for
their service to the Group. I was also delighted to announce in
December the appointment of two new directors. Tim Eckes
joined the Board as Client Services Director and Charlotte
Rigg joined as Non-Executive Director. James McDonald
assumed the role of Company Secretary in March 2020 and
took over the role of Finance Director from Nick Burrows.
Outlook
The impact of Covid-19 did not have a significant impact on
the results for last financial year but it did require us to adjust
all aspects of the Group’s activities to operate on a fully
remote basis. It is testament to the agility of our workforce
and systems, combined with the willingness of our clients to
entrust the ongoing delivery of their objectives to Triad, that
most of our engagements have continued without interruption.
I am also delighted to report that our workforce has remained
in good health, due in part to the Group’s decision to request
all staff to work at home in late March. We do not see any
Strategic report
Financial highlights
•
Revenue for the year ended 31 March 2020:
£19.4m (2019: £22.7m)
•
•
•
Loss before tax: £0.6m (2019: £1.0m profit)
Loss after tax: £0.8m (2019: £0.9m profit)
Gross profit as a percentage of revenue:
14.7% (2019: 19.3%)
Chairman’s statement
Dr John Rigg
For the year ended 31 March 2020 the Group reports
revenue of £19.4m (2019: £22.7m). The loss before tax was
£0.6m (2019 Profit: £1.0m) and gross profit as a percentage
of revenue has reduced to 14.7% (2019: 19.3%). Cash
reserves have reduced to £3.8m (2019: £4.6m). Further
consideration of the impact of Covid-19 is set out on pages
8 and 14.
Revenue has reduced by £3.3m due to a reduction in public
sector revenue (see note 4) across a small number of client
accounts. Gross profit as a percentage of revenue has been
reduced further by the planned investment in headcount as
the Group increases the ratio of permanent headcount to
contractors on consultant led engagements. The reduction
in cash of £0.8m is primarily due to the loss before tax
of £0.6m, improvements in working capital of £0.3m and
dividends paid of £0.5m.
Overview Comments
These full year results are in line with mid-year expectations
and reflect a solid performance by the Group in testing
conditions. As indicated in my interim statement, I
remain extremely proud of the efforts put in by all of our
staff. The second half of the year saw some important
achievements, including winning the re-procurement of the
business analysis service for the Ministry of Justice Crime
Programme. This important contract, to deliver a complete
business analysis capability, started in March 2020 with an
expected contract length of two years. This is an extremely
significant achievement and underscores the talent of our
staff and the Group’s ability to win within what is a very
competitive marketplace.
The Group continued to recruit new consultants, and
the Board has encouraged the pace of recruitment to
increase. The management team is clear about the Group’s
direction to drive more profit through the use of permanent
consultants and this financial year has seen significant effort
go in to building for the future and not simply focusing on
current utilisation rates.
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| Triad Group Plc Annual Report and Accounts 2020
Strategic report
reason why we should not continue being able to deliver
services on this basis and we will adopt an extremely careful
approach towards locating staff back on-site. One significant
project was due to start at the beginning of the new financial
year but has been delayed due to the Covid-19 outbreak and is
likely to commence with a relaxation of lockdown restrictions.
Contractor numbers in some sectors have been adversely
affected but we are already seeing signs of recovery in these
areas as new working practices designed to cope with the
Covid situation emerge.
Despite the significant buffeting caused by the effects
of Covid-19, the Group is determined to rely on its own
resources to drive the business forward. The Group chose
not to furlough staff, instead focusing on activities designed
to maximise our effectiveness when the external situation
improves. The Group remains debt-free except for lease
liabilities arising due to the application of IFRS 16 and
enjoys strong reserves of cash. We will continue to monitor
the situation carefully and will take the actions necessary
to preserve the health and wellbeing of the organisation,
maximise gross profit and drive profitability.
Dividend
The uncertainty caused by the Covid-19 outbreak means
that the conservation of cash is more important than ever.
Consequently, the Board has decided not to augment
the half-year dividend, meaning there will be no full-year
payment. Nevertheless, the dividend yield remains healthy at
4% for the year.
Employees
On behalf of the Board of Directors I would like to thank
our staff for their hard work last year and for the positive
way in which they have responded to the unprecedented
challenges thrust upon us and our wider community in March
of this year.
John Rigg
Executive Chairman
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
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Strategic report
Managing Director’s statement
Adrian Leer
Revenue in the year reduced by £3.3m to £19.4m (2019: £22.7m)
as a result of a number of public sector contract ends and
client losses. The Group made a loss before tax of £0.6m
(2019: Profit £1.0m). Notwithstanding the losses made in the
year, I am extremely pleased to report on another strong year
of delivery to our clients. An enduring hallmark of our business
is the length of relationships we enjoy with our customers.
We continued to provide services to Ministry of Justice (MOJ)
via our business analysis contract and the contract to supply
production services. With both services part of the Crime
Programme, Triad consultants are playing a part in delivering
one of the biggest programmes of change experienced
within the justice system. We have been working with MOJ
since 2014 and were delighted to win in March the contract
to supply business analysts for the next two years. We also
expect work to continue elsewhere at MOJ well into the new
financial year.
Our work with a significant policing client continued
throughout the year, with approximately ten full-time
consultants engaged on a range of activities from delivery
management to technical architecture.
At another client where we have enjoyed a working
relationship for many years, Department for Transport (DfT),
we successfully launched the Greenhouse Gases platform
for managing the obligations of fuel suppliers. This work
built on the experience already garnered from previous
engagements with the added dimension of creating an
approach that complied with the requirements of Government
Digital Services (GDS). Working closely with the DfT team, the
project successfully delivered against its objectives, including
successful navigation of GDS assessments.
During the year, we also continued to work with Dalcour
Maclaren helping them to develop their Connect platform.
Connect improves the way in which schemes of work are
managed and has played a significant part in underpinning
success at Dalcour Maclaren.
Our expertise in Microsoft technologies helped the company
to win repeat work at a major automotive retailer and at
a new client specialising in renewable energy. Energy
management and renewable energy is developing as an
area of expertise for the company, both within Government
agencies and across industry.
Our resourcing function concentrates on augmenting our
teams of consultants and providing individuals and teams
of contractors directly to clients. From a direct resourcing
perspective, the numbers of contractors increased by year-
end, although much of this improvement was eradicated by
service cancellations and suspensions due to Covid-19.
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| Triad Group Plc Annual Report and Accounts 2020
We made significant preparations for the roll-out to the
private sector of the off-payroll legislation (IR35). These
changes were halted at the last moment, as part of the
response to Covid-19. In any case, our view was that we
were well prepared for the changes and that our business
model provided some significant resilience versus other
competitors who rely on the supply of contractor resources.
Notably, our permanent recruitment fee income was higher
in the year than for many years previously. Whilst not a
significant component of revenue, this level of activity did
indicate a shift in client behaviour from the use of contingent
labour to an increase in permanent recruitment. We expect
some volatility in demand for resources of all types over the
next 6–12 months as the impact of Covid-19 plays out and
as we see clients able to invest in short-term projects, our
naturally flexible and dynamic supply mechanisms allow us
to respond quickly to demand for technology expertise in
whichever format our clients prefer. Further consideration of
the impact of Covid-19 is set out on pages 8 and 14.
We developed our offering around robotic process
automation (RPA) significantly during the year. With the
recruitment of an industry specialist, we have formulated a
range of services designed to help clients adopt and develop
RPA to automate processes. Our RPA offering complements
our digital services offering and, indeed, acts as a potential
precursor to longer-term digital transformation initiatives.
Elsewhere, our recruitment of new staff enhanced our
capabilities in artificial intelligence as well as adding to
existing core strengths in programme delivery, development
and business analysis.
The Group continued to develop its relationship with a small
number of global consultancies who value Triad’s agility and
delivery track record, particularly within the UK public sector.
With a small number of assignments complete in the year,
the Group sees these partnerships as supportive of our aim
to secure more long-term relationships with new clients.
The Group was awarded supplier status on the G-Cloud 11
framework and in September was also awarded a place on
the Digital Outcomes and Specialists (DOS) framework. In
September we were accredited as a Google Cloud partner
alongside our multiple gold Microsoft competencies.
Our Microsoft specialists presented at the World Power
Platform tour, an event which generated a number of
exciting prospects.
Strategic report
Other events in the year included a round table exploring
the alignment of business strategy and technology within
organisations. The Group also helped to deliver a keynote
presentation to the commercial community with Crown
Commercial Services around use of the DOS framework. A
number of ebooks were published as well as increased levels
of content generated by our consultants, reflecting a desire
to share more information with a wider audience to promote
the quality of our consultants’ engagement with key issues.
Towards the end of the financial year, with the advent
of Covid-19, the Group found itself relocating its entire
workforce to enable everyone to work from home.
This transition happened seamlessly overnight, and new
communications systems were introduced immediately to
maintain and even enhance levels of engagement across
the organisation. This effective management of working
practices has enabled the Group to maintain trading, grow
new business and enhance cashflow. I am immensely proud
of the dedication, commitment and spirit shown by our
employees in responding so positively to such a challenging
situation. I am also grateful to our clients who have
responded equally positively in allowing us to work with them
to establish successful ways of working.
Adrian Leer
Managing Director
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
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Organisation overview
To work with partners
Triad Group Plc is engaged in the provision of IT
consultancy, solutions and resourcing services to the
public and private sectors.
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 objectives
The principal objectives of the Group 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 trading 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.
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| Triad Group Plc Annual Report and Accounts 2020
•
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.
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 IT services, delivered through a single, easy to access,
point of sale.
We will continue to provide the highest quality of service
to our customers through our teams of skilled consultants
and market experts.
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 has conducted a robust assessment of the
principal risks facing the Group, examining the Group’s
operating environment and 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. Regular meetings are
held between the Executive Chairman and the Managing
Director to ensure risks are identified and communicated.
The outputs of this management review form part of the
Board’s governance process and reviewed at regular
Board meetings. When emerging risks arise these are
reviewed by senior management on an immediate basis and
communicated to the Board on a timely basis.
The principal risks identified are:
Covid-19
The potential effects of the Covid-19 pandemic are wide-
ranging and have affected all aspects of activities both
in the acquisition of new business and the servicing of
existing clients.
Strategic report
The main risks identified and potentially could occur, are a
reduction in new business pipeline opportunities, payment
delays and the recovery of debtor balances. These risks
have not yet materialised. The ability to effectively service
clients remotely, and a very strong focus on short-term
forecasting and cash collection will help to mitigate this
risk. The Group’s business model enables the risk to be
mitigated as services are mainly provided by external
contractors which enables the cost base to be scaled
appropriately in a quick manner.
IT services market
The demand for IT services is affected by UK market
conditions. This includes, for example, fluctuations in political
and economic uncertainty, and the level of public sector
spending. 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. This risk is more likely in the Covid-19 pandemic
although current indications are a continued investment by
Government in public sector spending.
Brexit
The political and economic uncertainty caused by Brexit
still has the potential to negatively affect the public sector
market due to an impact on government spending plans
and the cancellation or delay of IT projects. Conversely,
opportunities exist for the Group to provide services to
assist government departments in preparation for Brexit,
and post-Brexit reality. The strong relationships the Group
enjoys with a large range of public sector clients mitigates
this risk.
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.
To mitigate this risk, the Group reviews remuneration and
benefits on an annual basis and adjusts these accordingly
within market rates.
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. The Group ensures a high quality of service to
long-tenured clients, which includes continuous review of
delivery against project plan and obtaining client feedback.
This promotes longevity of client relationships and mitigates
to a high degree the risk of competition.
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.
The risk appetite of the Group is considered in light of the
principal risks and their impact on the ability to meet its
strategic objectives. The Board regularly reviews the risk
appetite which is set to balance opportunities for business
development and growth in areas of potentially higher risk,
whilst maintaining reputation, regulatory compliance, and
high levels of customer satisfaction.
Section 172 statement
Section 172 of the Companies Act 2006 requires Directors
to take into consideration the interests of key stakeholders
in the Group in their decision making.
The Board has identified the key stakeholders as
shareholders, clients, partners, employees and suppliers.
•
•
Shareholders: Dialogue is maintained with shareholders
and their advisors and issues of significance are
communicated to shareholders as necessary. In addition,
a full shareholder briefing is presented at the Group’s
annual general meeting of shareholders. The Board took
the decision to make the payment of an interim dividend
this year to reflect historical performance of the Group.
However, due to the perceived impact of Covid-19 and the
potential effects upon future cash flow, the Board has not
proposed a final dividend for the year ended 31 March
2020. These decisions have been made to protect the
interests of the shareholders future earnings.
Clients: Effective and successful delivery of services to
our clients is the key focus of the Group. To increase
effectiveness, a review of utilisation rates and delivery
structure has been completed during the year to enhance
the efficiency of the Group’s service to clients. Key
account delivery and management tools have also been
reviewed and enhanced to promote efficiencies. The
Group continues with the strategy of assigning permanent
employees as consultants on projects, to improve and
broaden the skill sets and enhance delivery to clients.
Triad Group Plc Annual Report and Accounts 2020
| 7
Strategic report
•
•
•
Partners: The Group continue to cultivate strong
relationships with our business partners, with regular
dialogue and updates to ensure that delivery to our shared
clients is as effective as possible. The Group continue to
explore delivery methods with partners that enable the
acquisition of new business.
Employees: Motivated and satisfied employees are the
lifeblood of our business and the Group strives to achieve
the highest standards in its dealings with all employees.
The Group has increased its level of communication with
employees during 2020 with regular Group meetings
chaired by the Managing Director. The Group continues
to provide appropriate comprehensive induction and
ongoing training tailored to individual needs. Extensive
employee benefits are provided which are continually
reviewed to enhance the wellbeing of all employees.
Remuneration packages are also reviewed annually to
ensure retention of employees.
Suppliers: The Group maintains appropriate arms-length
trading relationships with quality suppliers and is fully
committed to fairness in its dealing with suppliers, including
embracing the principle of paying suppliers within agreed
credit terms during the course of normal business. The
Group has continued to form closer relationships with
suppliers during the Covid-19 pandemic to ensure a
continuance of a quality service.
The Directors continue to ensure there is full regard to
the long-term interests of both the Group and its key
stakeholders including the impact of its activities on the
community, the environment and the Group’s reputation. In
doing this the Directors continue to act fairly and in good
faith taking into account what is most likely to promote the
long-term success of the Group:
•
•
•
•
Relations with key stakeholders such as shareholders,
employees and suppliers are maintained by regular, open
and honest communication in both verbal and written form.
The Directors are fully aware of their responsibilities to
promote the success of the Group in accordance with
section 172 of the Companies Act 2006.
The Directors continuously take into account the interests
of its principal stakeholders and how they are engaged.
This is achieved through information provided by
management and also by ongoing direct engagement with
the stakeholders themselves.
The Board has ensured an appropriate business structure
is in place to ensure open and effective engagement with
the workforce via the Executive Directors and the senior
management team.
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| Triad Group Plc Annual Report and Accounts 2020
•
•
The Board and the senior team continues to work
responsibly with all relevant stakeholders and has
appropriate anti-corruption and anti-bribery, equal
opportunities and whistleblowing procedures and
policies in place.
As required, Non-Executive Directors, professional
advisors and the Company Secretary provide support to
the Board to help ensure that sufficient consideration is
given to stakeholder issues.
Viability Statement
In accordance with the Listing Rules the Directors have
assessed the Company’s viability over the next five financial
years. 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. As part of the long-term viability assessment the
Directors have considered the principal risks.
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 have been reviewed. The Group was founded in 1988
and has survived several recessions.
Immediately prior to the Covid-19 pandemic, the Group
had begun to improve operational efficiencies, increase
profitability and build cash balances. As lockdown took hold,
project wins were postponed and a high level of uncertainty
developed. As such, the budgets and forecasts prepared by
the Directors for the 2021 financial year were conservative.
The viability assessment considered the principle risks as
set out on page 6, and in particular, the risk presented to
the business of Covid-19. The Board modelled a number
of realistic scenarios based upon conservative budgets,
including the loss of key clients. In addition, the most severe
scenario possible was modelled which assumed that the
effects of the pandemic would worsen with all current
client contracts discontinued at expiry, with no extension or
replacement and with no cost mitigation.
A further scenario took into account the potential impact of
IR35 legislation upon future trading capabilities. This was
found to have a limited impact.
Strategic report
In all scenarios, it was found that there was sufficient
headroom in cash flow to continue operating within
current resources for the next 12 months, and without the
requirement to utilise the available financing facility or
obtain further external funding. The Group was therefore
found to have sufficient financial strength to withstand
further disruption due to the pandemic.
There is less visibility over the medium term outlook and the
wider economic impact of Covid-19, but the Board believes
that the Group remains well placed to navigate effectively
a prolonged period of uncertainty and to mitigate the risks
presented by it.
Based upon the results of this analysis, the Board has
a reasonable expectation that the Group will be able to
continue in operation and be able to meet its liabilities over
the next 5 year viability period. In reaching this assessment,
the Board has taken into account future trading, increased
negative effects of Covid-19, access to external funding and
strong cash flow expectations.
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, EBITDA, gross margin 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;
Revenue
£19,354,000
£22,713,000
2020
2019
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.
Culture and engagement
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. An assessment of
culture, engagement and future contribution made to the
business by employees is made at each Board meeting
and is considered a key aspect of the meetings. The Board
has been satisfied with policies and practices and they
are aligned with the Group’s purpose and strategy and no
corrective action is required.
Diversity and Inclusion
Diversity and inclusion is a key component of working life
in the Group. Employees are encouraged to take an active
role in decision making and driving the business forward,
including several platforms within the business to share
good practice, successes and potential improvements.
The appointment of Charlotte Rigg in the financial year
has now increased the female proportion within the senior
management to 25% which is representative of the Group
as a whole. We continue to include diversity within our
recruitment policies and make improvements as appropriate.
The following table shows the average number of persons
employed during the year, by gender, who were directors,
senior managers or employees of the Company.
(Loss)/Profit from
operations
Earnings before interest,
tax, depreciation and
amortisation (EBITDA)*
Gross margin
Average headcount
£(568,000)
£1,019,000
£(299,000)
£1,090,000
Directors
Senior managers
14.7%
62
19.3%
Employees
56
Total
Male
Female
Total
6
–
40
46
1
1
14
16
7
1
54
62
* EBITDA – Loss from operations of £(568,000) adding back the
depreciation and amortisation charge in the year of £269,000
Triad Group Plc Annual Report and Accounts 2020
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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 Group has used both mileage
reports and meter readings to prepare the data.
The annual quantity of Greenhouse Gas (GHG) emissions
for the period 1 April 2019 to 31 March 2020 in tonnes of
carbon dioxide equivalents (tCO2e) for the Group is shown
in the table below:
Emissions
Emission source:
Combustion of fuel
Electricity and heat
purchased for own use
Total
tCO2e per £1m revenue
FTE
Intensity ratio (tCO2e
per FTE)
2020
tCO2e *
2019
tCO2e *
17
55
72
3.7
62
16
71
87
3.8
56
0.06
0.07
* The calculation of tCO2e for each source has been prepared
in accordance with DEFRA guidelines for GHG reporting.
The annual energy consumed as a result of the purchase of
electricity and heat for the period 1 April 2019 to 31 March
2020 in kWh is shown in the table below:
Energy consumed (kWh)
kWh per £1m revenue
FTE
Intensity ratio
(kWh per FTE)
2020
213,357
10,998
62
3,441
2019
165,981
7,312
56
2,964
The emissions are generated solely by activities in the UK.
Emissions generated by electricity consumption is 76%
(2019: 82%).
Whilst the Group has not set any specific targets in relation
for emissions due to the relatively small size of the impact,
the Company monitors the emissions on an annual basis.
The Directors believe that the impact is negligible given the
low numbers of employees.
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| Triad Group Plc Annual Report and Accounts 2020
The Group has not been subject to any environmental fines
during the year ended 31 March 2020 (2019: nil).
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.
Financial review
Group performance
Group revenue has decreased to £19.4m (2019: £22.7m).
This is due to a reduction in public sector revenue (see
note 4) across a number of key accounts. Gross margin as a
percentage of revenue has reduced to 14.7% (2019: 19.3%)
reflecting both the reduction in volume projects, business
mix and the planned investment in headcount as the Group
increases the ratio of permanent headcount to contractors on
consultant led engagements.
The Group reports a loss from operations before taxation
of £0.6m (2019: Profit £1.0m). The Group reports a loss
after tax of £0.8m (2019: Profit £0.9m). The loss arose due
to a reduction in gross profit of £1.5m which was due to
the loss of a number of volume accounts and an increase
in permanent headcount, combined with an increase in
administrative costs of £0.1m due to an increase in salary
related expenses. The effects upon profitability due to the
adoption of IFRS 16 are negligible.
The balance sheet remains strong with no external
borrowings, with the exception of the lease liabilities arising
due to the application of IFRS 16, and the Group enjoys strong
reserves of cash at £3.8m (2019: £4.6m).
Overheads
Administrative expenses for the year are £3.4m (2019:
£3.3m). As at 1 April 2019 the Group transitioned to IFRS16
‘Leases’, using the modified retrospective approach (See
note 1). This increased the depreciation charge with
respect to the right-of-use asset by £0.2m and reduced
operating lease rental expense by a corresponding £0.2m.
Staff Costs
Total staff costs have increased to £5.2m (2019: £4.6m) (note
7). The total average headcount for the year has increased
to 62 (2019: 56), which reflects the investment in fee earning
headcount as the Group increases the ratio of permanent
heads to contractors on consultant led engagements.
Strategic report
Cash
Share options
Cash and cash equivalents at 31 March 2020 decreased
to £3.8m (2019: £4.6m). There was a net cash inflow from
operating activities of £0.06m (2019: £1.3m). The net cash
outflow from financing activities was £0.8m (2019: outflow
of £0.3m) which included dividend payments totalling £0.5m
(2019: £0.3m) during the year, see note 9. The net cash
outflow from investing activities was £0.02m (2019: £0.2m).
Fixed assets
Tangible assets were increased by £1.0m (2019: £0.1m) which
predominantly related to the creation of the right-of-use assets
of £0.6m (2019: nil) and a finance lease receivable of £0.3m
(2019: nil) with respect to the adoption of IFRS16 ‘Leases’ (note
1). A further £0.1m related to purchased assets (2019: £0.1m).
Net assets
A total of 11,000 options were exercised by directors and staff
during the year (2019: 355,000). No options were granted during
the year (2019: nil). An expense of £28,000 (2019: £28,000) has
been recognised relating to options granted in March 2018.
New Standards
From 1 April 2019, the Group has adopted IFRS 16 ‘Leases’. The
impact of the adoption of this standard can be found in note 1.
By order of the Board
The net asset position of the Group at 31 March 2020 was
£4.6m (2019: £5.8m). The movements during the year are
detailed on page 36. The net effect of the transition to
IFRS16 ‘Leases’ (note 1) is nil (2019: nil).
James McDonald
Finance Director
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
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11
12
| Triad Group Plc Annual Report and Accounts 2020
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 2020. 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 Group’s and 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 subsidiary undertakings
are disclosed in the notes to the financial statements.
Corporate Governance disclosures required within the
Directors’ Report have been included within our Corporate
Governance Report beginning on page 16 and form part of
this report.
Share capital and substantial
shareholdings
Share capital
As at 31 March 2020, 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 20 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 their right to transfer the shares.
Certain restrictions may from time to time be imposed by
laws and regulations, for example:
Insider trading laws; and
•
• 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.
Substantial shareholdings
As at 31 March 2020, since the date of the last annual report
in June 2019, the Company had received no notifications
relating to interests in the Company’s issued share capital,
as required under the Disclosure and Transparency Rules
(DTR 5) when a notifiable threshold is crossed.
Triad Group Plc Annual Report and Accounts 2020
|
13
Directors’ report
As at 17 June 2020, no notifications have been received since
the year-end.
Dividends
An interim dividend was paid during the year of 1p (2019: 1p).
The Directors do not propose a final dividend (2019: 2p).
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.
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. During the
year, a dedicated small team of analysts and developers
built proofs-of-concept within the robotic process
automation arena. Activities included the development of a
tool to model investment, a mobile tool for modelling impact
assessments, and a working prototype for automating
critical functions within the recruitment sector.
Directors’ interests in contracts
Directors’ interests in contracts are shown in note 23 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 auditor
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 auditor for the
purposes of their audit and to establish that the auditor is
aware of that information. The Directors are not aware of any
relevant audit information of which the auditor is unaware.
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.
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. The Group meets its day to
day working capital requirements through cash reserves and
a finance facility (which is currently unutilised).
The Group operates an efficient low-cost and historically
cash generative model. The client base generally
consists of large blue-chip entities, particularly within the
public sector, enjoying long-term and productive client
relationships. As such, debt recovery has been reliable
and predictable with a low exposure to bad debts. For the
year ended 31 March 2020, the Group has not utilised any
external debt or lending facilities (2019: nil). The Group has
remained in full operation throughout the lockdown period
as services can be provided remotely and have seen a
delay in commencement of one contract as well as a pause
on the provision of contractor staff, where work needs to
be completed on-site. The Group has won a number of
new smaller ad hoc projects arising from the IT challenges
experienced by companies in lockdown.
The going concern assessment considered a number of
realistic scenarios including the impact of the loss of key
clients upon future cash flows. In addition, in the most severe
scenario possible, a reverse stress test was modelled which
assumed that the effects of the pandemic would worsen with
all current client contracts discontinued at expiry with no
extension or replacement and with no cost mitigation. Even
in the most extreme scenario the Group has enough liquidity
and long-term contracts to support the business through the
going concern period. The Directors have concluded from
these assessments that the Group would have sufficient
headroom in cash balances to continue in operation.
14
| Triad Group Plc Annual Report and Accounts 2020
Directors’ report
Further information in relation to the Directors’
consideration of the going concern position of the
Company is contained in the Viability Statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future and
at least twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going
concern basis in preparing the annual report and accounts.
Auditor
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.
In preparing these financial statements, the Directors are
required to:
•
•
state whether they have been prepared in accordance
with IFRSs as adopted by the European Union, subject
to any material departures disclosed and explained in
the financial statements;
prepare a Directors’ Report, Strategic Report and
Director’s Remuneration Report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on the
company’s website in accordance with legislation in the
United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the
Company's website is the responsibility of the Directors. The
Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
The Directors confirm to the best of their knowledge:
•
•
The Group financial statements have been prepared
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union
and Article 4 of the IAS Regulation and give a true and
fair view of the assets, liabilities, financial position and
profit and loss of the Group.
The annual report includes a fair review of the
development and performance of the business and the
financial position of the Group and the Parent Company,
together with the description of the principal risks and
uncertainties that they face.
•
•
select suitable accounting policies and then apply them
consistently;
By order of the Board
make judgements and accounting estimates that are
reasonable and prudent;
James McDonald
Company Secretary
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
|
15
Corporate governance report
The Board has considered the principles and provisions of the
UK Corporate Governance Code 2018 (“the Code”) applicable
for this financial period. The changes made in the revised Code
attempt to improve corporate governance processes and
encourage companies to demonstrate how good governance
contributes to the achievement of long-term success for
stakeholders. The Group keep governance matters under
constant review. Despite the changes in the Code requiring a
review of processes, there has not been a requirement to make
fundamental changes to strategy or working practices.
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 Board is responsible for the long-term and sustainable
success of the business, and considers all opportunities and
risks as set out in the principal risks and uncertainties on
page 6. Further, the Board considers how good governance
can assist in promoting the delivery of the strategy, by
reference to strong stakeholder engagement. Details of how
the Board drive this engagement can be found within the
s172 Statement on page 7.
The Directors who held office during the financial year were:
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Nick Burrows, Finance Director (left 19.03.20)
Tim Eckes, Client Services Director (appointed 01.01.20)
Independent Non-Executive Directors
Alistair Fulton, Senior Independent Non-Executive Director
Steven Sanderson (left 04.09.19)
Chris Duckworth
Charlotte Rigg (appointed 01.01.20)
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.
Adrian Leer is Managing Director. He was appointed to the
Board 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. Adrian became
Commercial Director of Triad Consulting & Solutions in 2012.
Tim Eckes was appointed to the Board on 1 January 2020.
Tim Eckes joined Triad in 1991 as a graduate software engineer
before moving into a number of technical and commercial
roles. He has multi-sector experience, having been involved
in engagements across finance, telecoms, travel and central
government. Over the last 5 years, as Managing Consultant, he
has played a significant role in growing the business through
the development of long-lasting and profitable relationships
with key clients.
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.
Chris Duckworth was appointed on 1 July 2017 as a Non-
Executive Director. He has held numerous positions within
public and private companies as Finance Director, Managing
Director, Non-Executive Director and Chairman. He was a
founding shareholder and from 1989 to 1994 was Finance
Director of Triad where he remained as a Non-Executive
Director until 1999. From 1989 to 1994 he was Finance Director
of Vega Group PLC after which he served as a Non-Executive
Director until 1997. He was a founding shareholder and
Chairman of Telecity PLC in May 1998 and subsequently acted
as a Non-Executive Director until August 2001.
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| Triad Group Plc Annual Report and Accounts 2020
Corporate governance report
Charlotte Rigg is a Non-Executive Director and was
appointed to the Board on 1 January 2020. Charlotte Rigg’s
experience is both extensive and diverse. Over the last 25
years she has built an internationally recognised stud farm
and runs a sizeable upland grazing farm in Cumbria where
the stud is based. In addition, Charlotte runs a successful
and expanding investment property portfolio which has been
established for over 20 years.
James McDonald is Finance Director. He was appointed to
the Board 16 June 2020. He joined the Company in February
2020 and, in March, assumed the position of Company
Secretary and acting Finance Director. He is a Chartered
Certified Accountant and has previously held a senior finance
position at Foxtons Group plc, prior to which he was Group
Finance Director and Company Secretary at Brook Street
Bureau Plc. He qualified with EY in London.
The Board exercises full and effective control of the Group
and has a formal schedule of matters specifically reserved to
it for decision making, including responsibility for formulating,
reviewing and approving Group strategy, budgets and major
items of capital expenditure.
Regularly the Board will consider and discuss matters that
include, but are not limited to:
Strategy;
•
• Shareholder value;
• Financial performance and forecast;
• Alignment of culture to Group values;
• Employee engagement;
• 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.
Employee engagement is taken very seriously by the Board,
and regular Group-wide communication meetings chaired by
the Managing Director takes place where there is a forum
available for all staff to participate. Further, on-line vehicles
exist that enable constructive discussions concerning
operational delivery and best practice. Given the size of the
Group, it is not appropriate to develop any sub-committees
for this purpose and direct Group forums encourage all staff
to participate without dilution of message.
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 that preserve Group values and
are sustainable over the long-term. 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. Chris Duckworth and Charlotte
Rigg are Non-Executive Directors. All have long-standing
experience in both executive and non-executive roles and
are free from any business or other relationship that could
materially interfere with the exercise of their independent
judgement. The Board benefits from their experience and
independence, when they bring their judgement to Board
decisions. The Board considers that all continue 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 (with effect from
17 December 2019) Chris Duckworth. 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 (with effect
from 16 June 2020) Charlotte Rigg. No third-party advisors
have a position on the Committee or have provided
services to the Committee during the year. The Committee
is chaired by Alistair Fulton.
Triad Group Plc Annual Report and Accounts 2020
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17
Corporate governance report
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 2020 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
Number of meetings attended
Executive Directors:
John Rigg (Chairman)
Nick Burrows
(left 19.03.20)
Adrian Leer
Tim Eckes
(appointed 01.01.20)
Non-Executive Directors:
Alistair Fulton
Steven Sanderson
(left 04.09.19)
Chris Duckworth
Charlotte Rigg
(appointed 01.01.20)
Audit Committee
9
9
9
9
3
8
3
9
2
1
1
–
–
–
1
1
–
–
–
–
–
–
–
–
–
–
–
The members of the Audit Committee are shown above.
The Board believe that John Rigg and Steven Sanderson
(resigned 4 September 2019), 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 30 years and Chris Duckworth with many years of
experience in senior finance positions in listed companies,
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 the external auditor 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.
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| Triad Group Plc Annual Report and Accounts 2020
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 projects during, and active at the
end of, the financial year to ensure revenue has been
recognised correctly.
IFRS 16 ‘Leases’: The Committee have considered the
adoption and accounting treatment with respect to the new
standard implemented 1 April 2019.
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 auditor and senior finance team
Members of the Audit Committee met with the senior
finance team in advance of their meeting with the auditor,
prior to commencement of the year-end audit to discuss;
• Audit scope, strategy and objectives
• Key audit and accounting matters
•
Independence and audit fee
A meeting was held following completion of the audit with
the senior finance team and the auditor to assess the
effectiveness of the audit and discuss audit findings.
Effectiveness of external audit process
The Committee conducts an annual review of the
effectiveness of the annual report process. Inputs into the
review include feedback from the finance team, planning
and scope of the audit process and identification of risk,
the execution of the audit, communication by the auditor
with the Committee, how the audit adds value and a review
of auditor independence and objectivity. Feedback is
provided to the external auditor and management by the
Committee, with any actions reviewed by the Committee.
Auditor independence and objectivity
The Committee has procedures in place to ensure that
independence and objectivity is not impaired. These include
restrictions on the types of services which the external
auditor can provide, in line with the FRC Ethical Standards
on Auditing. The external auditor has 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 auditor is required to rotate the
audit partner responsible for the Group audit every five years.
Corporate governance report
Non-audit fees
During the year the Group did not engage its auditor for
any non-audit work.
The Committee is responsible for reviewing any non-audit
work to ensure it is permissible under EU audit regulations
and that fees charged are justified, thus ensuring auditor
independence is preserved.
Appointment of external auditor
BDO LLP was reappointed external auditor in 2017 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.
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 size of the Group. The
Group is certified to ISO 9001: 2015.
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 and emerging 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
FRC guidance on risk management, internal control and
related financial and business reporting. 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.
The Group’s controls include appropriate segregation of
duties which are embedded in the organisation.
The Group has a formal process for planning, reporting
and reviewing financial performance against strategy,
budgets and forecasts and on a monthly, bi-annual and
annual basis.
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 Directors and senior managers to discuss
and monitor potential risks to the business, and to
implement mitigation plans to address them.
Remuneration Committee
The Remuneration Committee is responsible for setting
remuneration for Executive Directors and the Chairman
in accordance with the remuneration policy below. In
addition, the Committee is responsible for recommending
and monitoring the level and structure of remuneration for
senior management.
The Group’s Remuneration Committee is authorised to
take appropriate counsel to enable it to discharge its duty
to make recommendations to the Board in respect of all
aspects of the remuneration package of Directors. The
Committee also takes into account the general workforce
remuneration awards when setting Director remuneration.
The Directors Remuneration Report can be found on page 22.
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.
Triad Group Plc Annual Report and Accounts 2020
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19
All directors 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.
The chair should not remain in post beyond nine
years from the date of their first appointment to
the board. The Board considers that because
of its size and critically, due to the experience
of the Executive Chairman, this would not
be appropriate. The Board believe that re-
election in accordance with the Company’s
Articles of Association is sufficient.
Open advertising and/or an external search
consultancy should generally be used for the
appointment of the chair and Non-Executive
Directors. The Board has a strong culture
of promoting from within with relevant
experience to the Group.
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.
The chair of the board should not be a member
of the audit committee. The Board considers
that because of its size, and the relevant
knowledge and experience of the Executive
Chairman, that this is not appropriate.
The requirement to detail performance against
a diversity policy. The Group has a diversity
policy which meets our legal requirements.
The monitoring of performance against this
policy is an area which the Board take very
seriously and continuously look to improve.
The size of the Group and the long tenure of
senior staff provide constraints to improving
ratios in the short-term.
Corporate governance report
Board Evaluation
Provision 18
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. The Executive Chairman
continuously evaluates the ability of the Board to perform
its duties and recognises the strengths and addresses any
weaknesses of the board. In addition, 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.
Provision 19
Provision 20
Private shareholders are invited to attend and participate at
the Annual General Meeting.
Provisions 21/23
Terms of reference
The terms of reference of the Audit and Remuneration
Committees are available on request from the Company
Secretary.
Provision 24
Statement of compliance
The Board considers that it has been compliant with the
provisions of the Code for the whole of the period, except
as detailed below:
DTR 7.2.8 ARR
Provision 9
Provisions 17/23
The roles of chairman and chief executive
should not be exercised by the same individual.
John Rigg is the Executive Chairman. Adrian
Leer is Managing Director. 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.
20
| Triad Group Plc Annual Report and Accounts 2020
By order of the Board
James McDonald
Company Secretary
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
| 21
Directors’ remuneration report
On the following pages we set out the Remuneration Report for the year ended 31 March 2020. The members of the
Remuneration Committee are shown in the Corporate Governance Report on page 16.
This report has been prepared in accordance with the Companies Act 2006 and is split into two sections as follows;
1. The Directors’ remuneration policy.
2. The Annual report on remuneration. This will be subject to an advisory shareholder vote at this years’
Annual General Meeting.
As outlined by the Executive Chairman and the Managing Director in their annual statements on pages 2 and 4, 2020 was a year
for the continuation of the strategy of the investment in permanent consultants in an environment of pressure in public sector
business. To contain operating costs and maintain cash balances, the Committee carefully reviewed Director’s remuneration.
As such, no major decisions or changes were made to Directors’ remuneration during the year. Outside of the normal course
of business, there were also no discretionery payments other than for loss of office (see page 25). The Committee intends to
implement the Directors remuneration for the following year as agreed at the 2019 Annual General Meeting.
Directors’ remuneration policy
The remuneration policy sets out the framework within which the Company remunerates its Directors. The Company’s
remuneration policy and report was put to a shareholder vote at the 2019 Annual General Meeting of the Company and was
approved by 63.1% of shareholders and with 36.8% against and 100 votes withheld. See page 13 of the Director’s Report for
further details of voting rights.
The Committee acknowledges the votes against the policy and has carefully reviewed the outcome. The Committee aims to
align remuneration with Group financial performance by taking into account the difficult trading environment, and to ensure the
long-term health of the business. The Committee concludes that the remuneration is fair and appropriate but will continue to
seek shareholder feedback.
The remuneration policy will be put to a shareholder vote every three years unless any changes to the policy are proposed
before then.
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.
Pension
Provides competitive
post-retirement benefits
to support the recruitment
and retention of Executive
Directors.
Operation
Maximum payable
Performance metrics
Reviewed annually
taking into consideration
individual and company
wide performance and
the wider employee pay
review.
Ordinarily, salary
increases will be in
line with average
increases awarded to
other employees in the
Company.
None, although individual
performance is
considered when setting
salary levels.
Benefits in kind include
company cars or
allowances, private
medical insurance, life
cover and permanent
health insurance. Benefits
are reviewed periodically.
The Company pays
contributions into a
personal pension scheme
or cash alternative.
None.
Benefits are set at a
level considered to
be appropriate taking
into account individual
circumstances.
The Company matches
individual contributions up
to a maximum of 5%.
None.
22
| Triad Group Plc Annual Report and Accounts 2020
Directors’ remuneration report
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.
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
A Leer
C J Duckworth
T J Eckes
C M Rigg
Date of contract
Notice period
01/07/1999
19/02/1997
03/03/2015
01/07/2017
01/01/2020
01/01/2020
1 month
1 month
6 months
1 month
3 months
1 month
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 2020
| 23
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. 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 2019.
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:
2020
Director
Basic salary & fees
Benefits in kind
Pension
£’000
£’000
£’000
Other*
£’000
Total
£’000
Executive
J C Rigg
N E Burrows (left 19.03.20)
A Leer
T J Eckes (appointed 01.01.20)
Non-Executive
A M Fulton
S M Sanderson (left 04.09.19)
C J Duckworth
C Rigg (appointed 01.01.20)
60
120
167
28
40
15
35
–
–
13
15
1
–
–
–
–
–
26
19
4
–
–
–
–
–
43
–
–
15
–
–
–
60
202
201
33
55
15
35
–
* This represents for Nick Burrows a payment in lieu of share options forfeited of £42,500. For A M Fulton the total
of £15,000 represents back-pay.
24
| Triad Group Plc Annual Report and Accounts 2020
Directors’ remuneration report
Director
Executive
J C Rigg
N E Burrows
A Leer
Non-Executive
A M Fulton
S M Sanderson
C J Duckworth
2019
Basic salary
and fees
Benefits in kind
Pension
Other*
£’000
£’000
£’000
£’000
60
122
167
35
35
35
–
12
15
–
–
–
–
20
17
–
–
–
–
–
35
–
–
–
Total
£’000
60
154
234
35
35
35
* This represents a discretionary one-off bonus for A Leer of £35,000.
Benefits in kind include the provision of company car and medical insurance.
Pension includes a 5% employer contribution together with contributions made under an employee salary sacrifice scheme.
Other than vesting conditions in relation to outstanding share options (see note 21), no performance measures or targets
were in place for either the year ended 31 March 2020 or any prior financial year, upon which any variable pay elements
could become payable during the year.
Three Directors are members of a money purchase scheme into which the Group contributed during the year.
Payments to past Directors
There were no payments to past Directors during the year.
Payment for loss of office
Finance Director and Company Secretary Nick Burrows was paid a one-time discretionary settlement fee for loss of office of
£30,000 during the year. The Board believed this was necessary to ensure a smooth hand-over with his successor.
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 (left 04.09.19)
N E Burrows (left 19.03.20)
A Leer
C J Duckworth
T J Eckes (appointed 01.01.20)
C M Rigg (appointed 01.01.20)
1 April 2019
354,100
4,509,400
104,089
14,893
155,379
13,379
–
–
31 March 2020
354,100
4,509,400
–
–
155,379
13,379
60,374
100,000
Triad Group Plc Annual Report and Accounts 2020
| 25
Directors’ remuneration report
Directors’ share options
The interests of executive Directors in share options were as follows:
At beginning
of year
Forfeited
during year
Exercised
during year
At end
of year
Exercise
price
Exercise period
N E Burrows:
granted 23.09.11
100,000
(100,000)
granted 18.09.14
25,000
(25,000)
granted 09.03.18
75,000
(75,000)
A Leer:
granted 09.03.18
150,000
T J Eckes:
granted 09.03.18
60,000
–
–
410,000
(200,000)
–
–
–
–
–
–
–
–
–
13.5p
11.0p
23.09.14 to 23.09.21
18.09.17 to 18.09.24
53.5p
09.03.21 to 09.03.28
150,000
53.5p
09.03.21 to 09.03.28
60,000
53.5p
09.03.21 to 09.03.28
210,000
No share options were exercisable at the end of the year (2019: 125,000).
Share options are exercisable provided that the relevant performance requirement has been satisfied.
For options granted on 9 March 2018: 100% of the shares granted under an Option will vest if the Company’s share price at
31 March 2021 has increased by 30% or more from the share price as at the date of grant. 50% of shares granted under an
Option will vest if the Company’s share price at 31 March 2021 has increased by 15% from the share price as at the date of
grant. Between these upper and lower thresholds, awards vest on a straight-line basis.
For all other options: 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 total share-based payment expense recognised in the year in respect of Directors’ share options is £15,762 (2019: £11,821).
The market price of the Company’s shares was 27p at 31 March 2020 and the range during the year was between 25p and 55p.
.
26
| Triad Group Plc Annual Report and Accounts 2020
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 Fledgling Index
Fledging
Triad
300
250
200
150
100
50
x
e
d
n
I
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19 Mar 20
Chief executive remuneration
For the financial year ended 31 March 2020 the salary of the Executive Chairman was £60,000 (2019: £60,000). Employee
salaries increased, on average, by 4% in the year. Given the external marketplace, the Committee made the decision during
the year to award an increase to employees only.
The remuneration paid to the Executive Chairman for the financial years 2011 to 2020 were as follows:
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£25,000
£25,000
£25,000
£25,000
£25,000
£25,000
£25,000
£60,000
£60,000
£60,000
The annual amounts paid above relate to salary only. The Executive Chairman did not receive any discretionary payments
during these periods.
Relative importance of spend on pay
The total dividends or other cash distributions to shareholders during the year was £479,169 (2019: £316,300), see note 9.
The total employee remuneration (including Directors) during the year was £5.171m (2019: £4.567m).
Consideration of matters related to Directors’ remuneration
During the financial year, the remuneration committee did not consider Directors’ remuneration. No external advice was
sought in relation to matters discussed at these meetings.
Alistair Fulton
Chairman, Remuneration Committee
17 June 2020
Triad Group Plc Annual Report and Accounts 2020
| 27
Independent auditors’ report to the members of Triad Group Plc
Opinion
We have audited the financial statements of Triad Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 March 2020 which comprise the Group and Company statements of comprehensive income and expense, the
Group and Company statements of changes in equity, the Group and Company statements of financial position, the Group
and Company statement of cash flows and notes to the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion the financial statements:
•
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2020 and of the
Group’s and the Parent Company’s loss for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied
to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK)
require us to report to you whether we have anything material to add or draw attention to:
•
•
•
•
the directors’ confirmation set out on page 6 in the annual report that they have carried out a robust assessment of the
Group’s emerging and principal risks and the disclosures in the annual report that describe the principal risks and the
procedures in place to identify emerging risks and explain how they are being managed or mitigated;
the directors’ statement set out on page 14 in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting in preparing the financial statements and the directors’
identification of any material uncertainties to the Group and the Parent Company’s ability to continue to do so over a
period of at least twelve months from the date of approval of the financial statements;
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with Listing
Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation set out on page 8 in the annual report as to how they have assessed the prospects of the
Group, 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 Group 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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
28
| Triad Group Plc Annual Report and Accounts 2020
Independent auditors’ report to the members of Triad Group Plc
Revenue recognition
As detailed in note 1, revenue is recognised predominantly on a time and materials basis. Agreements to place a number of
consultants for a period of time are agreed with customers. Revenue is then recognised based on the timesheets recorded
and approved, either internally or externally, and a charge is based on an agreed hourly rate as per the agreement.
We considered there to be a significant risk over the completeness of revenue due to potential missing or late timesheets or
contractor invoices and existence of revenue through fraudulent manual postings to revenue in the financial close process.
How we addressed the key matter in our audit
We tested the operating effectiveness of key controls over the approval of timesheets and the recognition of these invoices
in the accounting system.
We performed testing on a sample basis over the revenue postings pre and post year end, agreeing the posting to
supporting documentation, ensuring the transaction is recorded in the correct period.
We performed testing on a sample basis over the contractor costs incurred before and after the year end, agreeing these to
supporting documentation and checking that the revenue associated with these has been recorded in the correct period.
We performed testing on a sample basis over the revenue postings throughout the year, agreeing the posting to timecard,
confirmation of charge out rate and sales invoice, ensuring the transactions are recorded in line with the accounting policy
and in the correct accounting period.
We tested a sample of manual journal postings to revenue, agreeing the posting to bank payment, sales invoices, credit
notes and timecards where appropriate.
We tested a sample of year end accrued and deferred income balances and agreed them to sales invoices, bank payment
where appropriate and timecards.
We performed testing on a sample basis over the timecards received either side of the year end, agreeing them to sales
invoices to ensure they have been recorded in the correct period.
We selected a sample of contracts for services provided in the year and agreed the revenue recognised against the policy
stipulated in the contract to check that the revenue recognition was appropriate and reviewed the accounting treatment to
ensure compliance with the requirements of the accounting standards.
Key observations:
We have noted no errors arising in relation to the revenue recognition as a result of the audit testing completed.
Going concern and Covid-19
Covid-19 was declared a pandemic in the financial year and as detailed in note 1 is expected to have an impact on the future
performance of the Group. As at 31 March 2020 the Group holds cash of £3.84m, net current assets of £4.182m and net
assets of £4.555m.
The Group’s going concern assessment, prepared for a period of 12 months from the date of the approval of the financial
statements, considers the potential impacts of the pandemic and a stress test scenario has been prepared. This scenario
has assumed that there will be a significant downturn in performance from no new projects being won, utilisation of
consultants reduces and contractor income drops to close to nil by the end of the going concern assessment period.
Due to the potential impact on the Group from Covid-19 and the significant judgements made in the going concern assessment
we considered there to be a significant risk over the appropriateness of the presentation of the going concern status.
Triad Group Plc Annual Report and Accounts 2020
| 29
Independent auditors’ report to the members of Triad Group Plc
How we addressed the key matter in our audit
We considered the nature of the Group, its business model and related risks to going concern arising including the impact of
the Covid-19 pandemic.
We evaluated the Directors’ assessment of the Group’s ability to continue as a going concern, including challenging the
underlying data by agreeing it to actual performance in the previous financial year, client contracts, bank statements and
comparing it to post year-end financial performance. We challenged the key assumptions used, including recoverability
of trade receivables, levels of future revenue and staff costs by comparing them against previous financial performance
and enquires with management. We evaluated the Directors’ plans for future actions in relation to their going concern
assessment. We have assessed the reasonableness of the forecasts against historic and post year end actual performance.
We examined the forecasts and stress test provided by the Group. We tested the integrity of the models by checking the
formulas, the arithmetic accuracy and any hard coding. Where appropriate we have agreed the inputs to the model to
supporting documentation such as contracts with clients and bank statements.
Enquires were made of management as to any future events or conditions that may affect the Group’s ability to continue as
a going concern, we have also inspected the minutes of Board meetings to support our enquires.
We obtained confirmation of the financing facilities available to the Group and assessed the availability of cash to the Group
over the forecast period and the level of headroom available.
Our application of materiality
We apply the concept of materiality both in planning and performing of our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements. Misstatements below these levels will not
necessarily be evaluated as immaterial as we also take into account the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
The materiality for the Group financial statements as a whole was set at £97,000 (2019: £114,000). This was determined
with reference to a benchmark of revenue of which it represents 0.5% (2019: 0.5%). We consider revenue to be the most
appropriate benchmark as it is one of the principal considerations for users of the financial statements in assessing the
financial performance and development of the Group.
In determining the performance materiality we based our assessment on a level of 65% (2019: 70%) of materiality. In setting
the level of performance materiality we considered a number of factors including the expected total value of known and
likely misstatements (based on past experience and other factors), the amount of areas of estimation within the financial
statements and the type of audit testing to be completed.
The materiality threshold is the same for the Group and Parent Company as the rest of the entities within the Group are dormant.
The reporting threshold to the Audit Committee was set at £1,935 (2019: £2,280) which is 2% of the materiality threshold.
We also agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
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 and Parent Company level.
The Group operates solely in the United Kingdom. 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.
Based on our assessment we performed an audit of the complete financial information of the Parent Company as the only
trading Company and only significant component.
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.
30
| Triad Group Plc Annual Report and Accounts 2020
Independent auditors’ report to the members of Triad Group Plc
Capability of the audit to detect irregularities, including fraud
We obtained an understanding of the regulatory and legal framework applicable to the Group and the industry in which it operates
and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
These included but were not limited to compliance with the Companies Act 2006, Corporate Governance, the UK listing
rules and UK tax legislation.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery, misrepresentations or through collusion.
We focused on laws and regulations that could give rise to a material misstatement in the company financial statements.
Our tests included, but were not limited to the investigation, through the review of minutes and enquires of management, of
potential non-compliance with laws and regulations and review of the communications with the regulatory bodies.
There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws
and regulations is from the events and transactions reflected in the financial statements, the less likely we would become
aware of it. We also addressed the risk of management override of internal controls, including testing journals and evaluating
whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a
material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in
the other information and to report as uncorrected material misstatements of the other information where we conclude that
those items meet the following conditions:
•
•
•
Fair, balanced and understandable set out on page 13 – the statement given by the directors that they consider
the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position, performance, business model and strategy, is
materially inconsistent with our knowledge obtained in the audit; or
Audit committee reporting set out on page 18 – the section describing the work of the audit committee does not
appropriately address matters communicated by us to the audit committee
Directors’ statement of compliance with the UK Corporate Governance Code set out on page 20 – the parts of the
directors’ statement required under the Listing Rules relating to the Company’s compliance with the UK Corporate
Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do
not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.
Triad Group Plc Annual Report and Accounts 2020
| 31
Independent auditors’ report to the members of Triad Group Plc
Opinions 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.
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
the Parent Company financial statements 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.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities within the directors’ report set out on page 15, the
directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
32
| Triad Group Plc Annual Report and Accounts 2020
Independent auditors’ report to the members of Triad Group Plc
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the Directors to audit the financial statements for the
year ending 31 March 2006 and subsequent financial periods. The period of total uninterrupted engagement is 15 years, covering the
years ending 31 March 2006 to 31 March 2020.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
James Fearon
(Senior Statutory Auditor)
17 June 2020
For and on behalf of BDO LLP, Statutory Auditor
London, UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Triad Group Plc Annual Report and Accounts 2020
| 33
Statements of comprehensive income and expense
for the year ended 31 March 2020
Group and Company
Revenue
Cost of sales
Gross profit
Administrative expenses
(Loss)/Profit from operations
Finance income
Finance expense
(Loss)/Profit before tax
Tax Charge
(Loss)/Profit for the year and total comprehensive income
attributable to equity holders of the parent
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
All amounts relate to continuing activities.
Note
4
5
13
6
8
10
10
2020
£’000
19,354
(16,500)
2,854
(3,422)
(568)
20
(54)
(602)
(159)
(761)
(4.76p)
(4.76p)
2019
£’000
22,713
(18,337)
4,376
(3,357)
1,019
–
(2)
1,017
(132)
885
5.60p
5.44p
34
| Triad Group Plc Annual Report and Accounts 2020
Statements of changes in equity for the year ended 31 March 2020
Group
At 1 April 2018
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 1 April 2019
Loss for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
Share
Capital
£’000
156
–
–
4
–
160
–
–
–
–
Share premium
account
Capital redemption
reserve
Retained earnings
Total
£’000
619
£’000
104
£’000
4,246
£’000
5,125
885
885
(316)
(316)
–
28
44
28
–
–
–
–
104
4,843
5,766
–
–
–
–
(761)
(761)
(479)
(479)
–
28
1
28
–
–
40
–
659
–
–
1
–
At 31 March 2020
160
660
104
3,631
4,555
Company
At 1 April 2018
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 1 April 2019
Loss for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
Share
Capital
£’000
156
—
–
4
–
160
–
–
–
–
Share premium
account
Capital redemption
reserve
Retained earnings
Total
£’000
619
£’000
104
—
–
40
–
659
–
–
1
–
–
–
–
–
104
–
–
–
–
£’000
4,241
£’000
5,120
885
885
(316)
(316)
–
28
4,838
(761)
44
28
5,761
(761)
(479)
(479)
–
28
1
28
At 31 March 2020
160
660
104
3,626
4,550
Share capital represents the amount subscribed for share capital at nominal value.
The share premium account represents the amount subscribed for share capital in excess of the nominal value.
The capital redemption reserve represents the nominal value of the purchase and cancellation of its own shares by the
Company in 2002.
Retained earnings represents the cumulative net gains and losses recognised in the statement of comprehensive income
and expense.
Triad Group Plc Annual Report and Accounts 2020
| 35
Statements of financial position at 31 March 2020
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Finance lease receivables
Deferred tax
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Financial liabilities
Lease liabilities
Non-current liabilities
Financial liabilities
Long term provisions
Lease liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total shareholders’ equity
Note
11
12
13
13
8
15
16
17
18
13
18
19
13
20
Registered number 2285049
Group
Company
2020
£’000
10
275
622
297
32
1,236
2,741
3,840
6,581
7,817
2019
£’000
15
205
–
–
191
411
3,333
4,604
7,937
8,348
2020
£’000
10
275
622
297
32
1,236
2,741
3,840
6,581
7,817
2019
£’000
15
205
–
–
191
411
3,333
4,604
7,937
8,348
(2,127)
(2,480)
(2,132)
(2,485)
–
(272)
(2,399)
–
(197)
(666)
(863)
(3,262)
4,555
160
660
104
3,631
4,555
(3)
–
–
(272)
(3)
–
(2,483)
(2,404)
(2,488)
(17)
(82)
–
(99)
(2,582)
5,766
160
659
104
4,843
5,766
–
(197)
(666)
(863)
(3,267)
4,550
160
660
104
3,626
4,550
(17)
(82)
–
(99)
(2,587)
5,761
160
659
104
4,838
5,761
The financial statements on pages 34 to 59 were approved by the Board of Directors and authorised for issue on 17 June
2020 and were signed on its behalf by:
Adrian Leer
Director
James McDonald
Director
Triad Group Plc is registered in England and Wales with registered number 2285049.
36
| Triad Group Plc Annual Report and Accounts 2020
Statements of cash flows for the year ended 31 March 2020
Group and company
Cash flows from operating activities
Note
2020
£’000
2019
£’000
Operating (Loss)/Profit for the year before taxation
(602)
1,017
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Amortisation/impairment of intangible assets
Interest received
Finance expense
Share-based payment expense
Changes in working capital
Decrease in trade and other receivables
Decrease in trade and other payables
Increase/(Decrease) in provisions
Cash generated by operations
Finance expense
Net cash inflow from operating activities
Investing activities
Finance lease interest received
Finance lease payments received
Purchase of intangible assets
Purchase of property, plant and equipment
Net cash used in investing activities
Financing activities
Proceeds of issue of shares
Lease liabilities principal payments
Lease liabilities interest payments
Finance lease principal payments
Dividends paid
Net cash outflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
97
166
5
(20)
60
28
593
(374)
115
68
(4)
64
20
123
–
(166)
(23)
–
(270)
(56)
–
(479)
(805)
(764)
4,604
3,840
65
–
6
–
2
28
652
(415)
(74)
1,281
(2)
1,279
–
–
(17)
(134)
(151)
44
–
–
(3)
(316)
(275)
853
3,751
4,604
9
16
Triad Group Plc Annual Report and Accounts 2020
| 37
Notes to the financial statements for the year ended 31 March 2020
1. Principal accounting policies
Basis of preparation
The principal accounting policies adopted in the
preparation of the financial statements are set out below.
The policies have been consistently applied to all the years
presented, unless otherwise stated.
These financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS and
IFRIC interpretations), as adopted by the European Union (EU),
issued by the International Accounting Standards Board (IASB)
and with those parts of the Companies Act 2006 applicable to
companies preparing their accounts under IFRS.
These financial statements have been prepared on a going
concern basis.
These financial statements have been prepared on a
historical cost basis and are presented in sterling, the
functional currency of the Company.
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.
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. The Group meets its day to
day working capital requirements through cash reserves and
an invoice finance facility (which is currently unutilised).
The Group operates an efficient low-cost and historically
cash generative model. The client base generally consists of
large blue-chip entities, particularly within the public sector,
enjoying long-term and productive client relationships. As
such, debt recovery has been reliable and predictable with
a low exposure to bad debts. For the year ended 31 March
2020, the Group has not utilised any external debt or lending
facilities (2019: nil). The Group has remained in full operation
throughout the lockdown period as services can be provided
remotely, have seen a delay in commencement of one
contract as well a pause on the provision of contractor staff
where work needs to be completed on-site. The Group has
won a number of new smaller ad hoc projects arising from
the IT challenges experienced by companies in lockdown.
The going concern assessment considered a number of
realistic scenarios including the impact of the loss of key
clients upon future cash flows. In addition, in the most severe
scenario possible, a reverse stress test was modelled which
assumed that the effects of the pandemic would worsen with
all current client contracts discontinued at expiry with no
extension or replacement and with no cost mitigation. Even
in the most extreme scenario the Group has enough liquidity
and long-term contracts to support the business through the
going concern period. The Directors have concluded from
these assessments that the Group would have sufficient
headroom in cash balances to continue in operation.
Further information in relation to the Directors’
consideration of the going concern position of the
Company is contained in the Viability Statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future and
at least twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going
concern basis in preparing the annual report and accounts.
New standards adopted for the year ended 31 March 2020
The following International Financial Reporting Standards were
adopted by the Group as at 1 April 2019.
IFRS 16 Leases
IFRS 16 became effective for the Group from 1 April 2019.
It requires that leases are recognised in the statement of
financial position as assets and liabilities with exceptions
where the underlying asset is of low value, or where the
lease term is 12 months or less.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using an incremental borrowing rate which
is the rate a lessee would have to pay to borrow over a
similar term and with a similar security, to buy a similar asset.
A right-of-use asset comprises the original lease liability, initial
direct costs and amounts paid up front and is subsequently
measured at cost less accumulated depreciation.
The Group as a lessee has recognised right-of-use assets
representing its rights to use the underlying assets and lease
liabilities representing its obligation to make lease payments.
The Group has property lease contracts with terms remaining
at the balance sheet date ranging of between 3–5 years.
38
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
The Group has adopted IFRS 16 using the modified
retrospective approach and accordingly the information
presented for prior years has not been restated as permitted
under the specific transitional provisions in IFRS 16. It
remains as previously reported under IAS 17.
When measuring lease liabilities, the Group discounted
lease payments using its incremental borrowing rate at 1
April 2019. The rate applied is 5.0%. This was an estimate
calculated using commercially available loan facilities and
short-term interest rate expectations.
The following practical expedients have been adopted on
transition:
•
•
•
not to capitalise a right-of-use asset or related lease
liability where the lease expires before 31 March 2020;
to use hindsight in determining the lease term if the
contract contains options to extend or terminate the
lease; and
lease payments for contracts with a duration of 12
months or less and contracts for which the underlying
asset is of a low value will continue to be expensed to
the Consolidated Income Statement on a straight-line
basis over the lease term.
The Group subleases part of one property lease to a
third party. The sublease was previously recognised as
an operating lease. On application of IFRS 16, the Group
has reconsidered the accounting treatment and instead
recognised this as a finance lease as the sublease is for the
life of the right-of-use asset.
A lease receivable has therefore been recognised and the
portion of the right-of-use asset related to the subleased
property was derecognised. The sublease has been
calculated as the discounted future lease receipts. The
lease receivable is unwound over the life of the finance
lease and reduces as lease receipts are received.
Consolidated Balance Sheet
On initial application, the Group has elected to record right-
of-use assets based on the corresponding lease liability.
As of 1 April 2019, right-of-use assets of £0.79m, lease
receivable of £0.42m and lease obligations of £1.128m were
recorded. Prepayments were reduced by £0.08m, being the
value of prepaid operating lease payments as at 1 April 2019.
Initial recognition of right-of-use assets
Initial recognition of lease receivable
Initial recognition of lease liabilities
Reduction of prepayments, included in
right-of-use assets
Impact on retained earnings
£'000
788
420
(1,128)
(80)
–
The Group has recognised £0.62m of right-of-use assets,
lease receivable of £0.30m and £0.94m of lease liability as
at 31 March 2020.
Reconciliation between the Group’s operating lease
commitments and lease liability
The following table reconciles the Group’s operating lease
commitments as a lessee at 31 March 2019, as previously
disclosed in the Financial Statements, to the lease obligations
recognised on initial application of IFRS 16 at 1 April 2019:
Operating lease commitments at 31 March 2019 as
disclosed in the Financial Statements*
Operating lease commitments related to cars
Break clause in the year not exercised
Impact of discounting on leases
Lease liabilities recognised at 1 April 2019
£'000
847
(9)
452
(162)
1,128
(*) the operating lease commitments disclosure at 31 March
2019 included lease payments to be made following a
break clause of £532,000 based on the intention of the
Company not to exercise the break and a rent prepayment
of £80,000. This did not impact the IFRS 16 lease liability
at 1 April 2019 as the break was in the Company’s control.
This has been corrected above and the operating lease
commitment comparative disclosure in note 22 has also
been corrected to exclude these amounts.
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.
Triad Group Plc Annual Report and Accounts 2020
| 39
Notes to the financial statements for the year ended 31 March 2020
Property, plant and equipment
Trade and other receivables
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any impairment in value.
Depreciation is calculated 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. Depreciation is charged to administrative
expenses in the statement of comprehensive income and
expense. The principal annual rates used for this purpose are:
Computer hardware
Fixtures and fittings
Motor vehicles
Leasehold improvements
Intangible assets
%
25–33
10–33
25–33
10–33
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 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:
Trade and other receivables are initially recognised at fair
value plus transaction costs, and subsequently measured
at amortised cost using the effective interest method, less
provision for impairment.
At each reporting date an amount of impairment is recognised
as lifetime expected credit losses (lifetime ECL’s).
Lifetime ECL’s are calculated using a provision matrix that
groups trade receivables according to the time past due,
and at provision rates based on historical observed default
rates, adjusted for forward looking estimates. At every
reporting date, the historical observed default rates and
forward-looking estimates are updated.
Amounts are written off to administrative expenses
against the carrying amount of trade receivables when it is
certain that the receivable will not be realised.
Cash
Cash in the statement of financial position 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.
Leases
%
25–33
For the year ended 31 March 2019, costs in respect
of operating leases were charged to the statement of
comprehensive income and expense on a straight-line basis
over the lease term.
For the year ended 31 March 2019, finance lease payments
were apportioned between the finance charge and the
reduction of the outstanding liability. The finance charge
was allocated so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
For the year ended 31 March 2020 lease costs follow
the accounting treatment ‘IFRS 16 Leases’. All leasing
arrangements, where the Group is the lessee, are recognised
as a lease liability and corresponding right-of-use asset.
Purchased computer software
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.
40
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
The lease liability is calculated as the discounted total fixed
payments for the lease term, termination payments, exercise
price of purchase options, residual value guarantee and certain
variable payments. An interest charge is recognised in the
statement of comprehensive income and expense on the lease
liability at an incremental borrowing rate. The lease liability
reduces over the period of the lease as payments are made.
The right-of-use asset is calculated as the original lease
liability, initial direct costs and amounts paid upfront. The
right-of-use asset is subsequently measured at cost less
accumulated amortisation. The amortisation is charged on
a straight-line basis over the life of the lease.
Lessor
For the year ended 31 March 2019, income in respect of
operating leases were recognised in the statement of
comprehensive income and expense on a straight-line basis
over the lease term.
For the year ended 31 March 2020 lessor arrangements
follow the accounting treatment ‘IFRS 16 Leases’. Where
the lease indicates a finance lease a lease receivable
is recognised. The lease receivable is calculated as the
discounted total lease receipts for the lease term.
Interest income is subsequently recognised in the
statement of comprehensive income and expense on the
lease receivable and the balance reduces over the lease
term as receipts are received.
Foreign currencies
Assets and liabilities expressed in foreign currencies are
translated into sterling at the exchange rate ruling on the
date of the statement of financial position. 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.
output method which uses a direct measurement of value to
the customer of the services transferred to date.
Where temporary workers are supplied to customers, the
associated revenue is recognised gross (inclusive of the
cost of the temporary workers) since the Group is acting
as principal. Under IFRS 15, in order to be recognised as
principal, there must be a transfer of control between
the vendor and the customer. Where the Group provides
temporary contractors, it is acting as principal since it
receives resourcing requirements directly from the customer,
has prime responsibility to find suitable candidates and
negotiate pay rates with them, and delivers the resources
to the client including acceptance that the service provided
meets the client’s expectations. Revenue is therefore
recognised as the gross amount invoiced to customers.
Revenue from fixed price contracts, which may include
software and product development or support contracts,
is determined by reference to those fixed prices, agreed at
inception of the contract. Since it has a right to consideration
from a customer in an amount that corresponds directly
with the value to the customer of the Group’s performance
completed to date, the Group recognises revenue in the
amount to which it has a right to invoice. For fixed price
contracts revenue is recognised on an over time basis using
the input (percentage completion) method. Percentage
completion is calculated as the total hours worked as at
the statement of financial position date divided by the total
expected hours to be worked to complete the project.
Revenue for permanent recruitment services is based on
a percentage of a successful candidate’s remuneration
package, as agreed with the customer at inception of the
contract. Revenue is recognised at a point in time when
the performance obligation has been satisfied at the time
the candidate commences employment and subject to a
provision for clawback of fees for candidates that leave
prior to the notice period ending.
Revenue
Taxation
Revenue recognised in any financial period is based on the
delivery of performance obligations and an assessment
of when control is transferred to the customer. Revenue is
either recognised at a ‘point in time’ when a performance
obligation has been performed, or ‘over time’ as control of
the performance obligation is transferred to the customer.
The majority of the Group’s revenue is derived from the
provision of services under time and materials contracts.
Performance obligations under such contracts relate to the
provision of staff to customers. The transaction price of the
performance obligation is determined by reference to charge-
out rates for supplied staff and are specified in the contract.
Since the customer simultaneously receives and consumes
the benefits of the Group’s performance obligations under
such contracts, revenue is recognised over time using the
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 statement of financial position 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.
Triad Group Plc Annual Report and Accounts 2020
| 41
Notes to the financial statements for the year ended 31 March 2020
Pension costs
IFRS 16 Leases
A right-of-use asset of £0.6m (2019: nil), a total lease
liability of £0.9m (2019: nil) and a finance lease receivable
of £0.3m (2019: nil) have been recognised in accordance
with the accounting policies on page 38 with respect to
the adoption of IFRS 16 ‘Leases’. The Directors have made
following critical accounting estimates and judgements in
relation to these balances:
•
•
Lease term: The Directors are of the opinion that
property lease assets and liabilities should be
calculated with relation to the first available break date
as the expectation is that the lease break will be taken.
Incremental borrowing rate (IBR): The Directors have
calculated the IBR at 5%, based upon readily available
credit facilities and estimated movements in the base
rate, covering a time frame commensurate with the
time to the first available break date.
Dilapidation provisions:
The Directors have recognised a dilapidation provision for
both the leases held totalling £197,000 (2019: £82,000).
The provision is required to recognise the costs of restoring
the properties to their original state at the end of the lease
period. The provision has been calculated using generally
accepted industry averages of between 15 and 20% of
lease costs and the Directors’ experience with the landlord
as well as experience in similar negotiations.
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.
Contributions to defined contribution plans are charged to
the statements of comprehensive income and expense as
the contributions accrue.
Share-based payments
Share-based incentive arrangements are provided to
employees under the Group’s share option scheme. Share
options granted to employees are valued at the date of
grant using an appropriate option pricing model and are
charged to operating profit over the performance or vesting
period of the scheme. The annual charge is modified to
take account of shares forfeited by employees who leave
during the performance or vesting period and, in the case
of non-market related performance conditions, where it
becomes unlikely the option will vest.
Provisions
A provision is recognised when the Group has a legal or
constructive obligation as a result of a past event and it
is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material,
expected future cash flows are discounted using a current
pre-tax rate that reflects the risks specific to the liability.
Calculations of these provisions require judgements to be
made. The Group has provided for property dilapidation as
detailed in note 19.
New standards and interpretations
A number of amendments to existing standards have been
issued but which are not yet mandatory, and have not
been adopted by the Group in these financial statements.
The Directors do not anticipate that their adoption in
future periods will have a material impact on the financial
statements of the Group.
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.
42
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
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 contracts with supplier and client will be in the same
currency thereby mitigating the Group’s exposure to
movements in exchange rates. Payments and receipts are
made through a bank account in the currency of the contract
therefore balances held in any foreign currency are to
facilitate day to day transactions. With a functional currency
of sterling there are the following foreign currency net assets:
Group and company
Note
2020
£'000
2019
£'000
Currency: Euros
Net cash
Trade and other receivables
Trade and other payables
16
15
17
132
19
(25)
126
100
8
(17)
91
Any change in currency rates would have no significant
effect on results.
Interest rate risk
The Group has access to a financing facility with a major
UK bank. At the balance sheet date in the current or prior
year this facility has not been utilised.
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.
There were no borrowings, aside from lease liabilities
arising from the application of IFRS 16, during the year.
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 credit losses. The amount charged to the
income statement during the year in respect of expected credit
losses was £6,000 (2019: (£20,000)).
The Group is also exposed to credit risk from contract
assets, being revenue earned but not yet invoiced (note 15).
The Group also has credit risk from cash deposits with
banks (note 16).
The Group’s maximum exposure to credit risk is:
Trade and other receivables
Contract assets
Other debtors
Cash and cash equivalents
Note
15
15
15
16
2020
£'000
2019
£'000
2,500
2,964
68
17
58
95
3,840
4,604
6,425
7,721
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 £2.6m. The facility may be terminated
by the bank and Group with one and three month’s written
notice respectively. The Board receives regular cash flow
and working capital projections to enable it to monitor its
available headroom under this facility. At the statement
of financial position 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 17 and 18.
Capital risk management
The Group’s capital comprises of 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.
Triad Group Plc Annual Report and Accounts 2020
| 43
Notes to the financial statements for the year ended 31 March 2020
4. Revenue
The Group operates solely in the UK. All material revenues are generated in the UK.
The largest single customer contributed 39% of Group revenue (2019: 33%) and was in the public sector. One other
customer contributed more than 10% of Group revenue (2019: none).
Disaggregation of revenue
In accordance with IFRS 15, the Group disaggregates revenue by contract type as management believe this best depicts how
the nature, timing and uncertainty of the Group’s revenue and cash flows are affected by economic factors. Accordingly, the
following table disaggregates the Group’s revenue by contract type:
Group and company
Time and materials
Fixed price
Percentage fee based
2020
£'000
19,017
82
255
2019
£'000
22,472
111
130
19,354
22,713
The Group also disaggregates revenue by operating sector reflecting the different commercial risks (e.g. credit risk) associated
with each.
Group and company
Public sector
Private sector
Contract balances
2020
£'000
10,277
9,077
19,354
2019
£'000
13,432
9,281
22,713
For all contracts, the Group recognises a contract liability to the extent that payments made are greater than the revenue
recognised at the period end date. When payments are made less than the revenue recognised at the period end date, the Group
recognises a contract asset for the difference.
Contract assets and contract liabilities are included within ‘trade and other receivables’ and ‘trade and other payables’
respectively on the face of the statement of financial position.
Group and company
At 1 April
Transfers in the period from contract assets to trade receivables
Excess of revenue recognised over cash (or right to cash) being
recognised in the period
Amounts included in contract liabilities that was recognised as
revenue in the period
Cash received in advance of performance and not recognised as
revenue in the period
At 31 March
Contract assets
Contract liabilities
2020
£’000
58
(58)
68
–
–
68
2019
£’000
1,216
(1,216)
58
–
–
58
2020
£’000
(43)
–
–
43
(41)
(41)
2019
£’000
(25)
–
–
25
(43)
(43)
There is no expectation of a material expected lifetime credit loss arising in relation to contract assets.
44
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
5. (Loss)/Profit from operations
(Loss)/Profit from operations is stated after charging:
Depreciation of owned assets
Amortisation of right-of-use assets
Amortisation of intangible assets
Operating leases for land and buildings
Other operating leases
Auditor remuneration:
Audit of financial statements: Group and company
6. Finance expense
Other interest payable
Interest expense on lease liability
Net foreign exchange gain
Total finance expense
7. Employees and directors
Group and company
Average number of persons (including Directors) employed
Senior management
Fee earners
Sales
Administration and finance
Staff costs for the above persons (including Directors)
Wages and salaries
Social security costs
Defined contribution pension costs
Equity settled share-based payments
2020
£'000
97
166
5
–
6
59
2020
£'000
1
56
(3)
54
2019
£'000
65
–
6
303
13
57
2019
£'000
1
–
1
2
2020
Number
2019
Number
8
37
10
7
62
2020
£'000
4,176
482
485
28
5,171
8
31
11
6
56
2019
£'000
3,722
420
397
28
4,567
Triad Group Plc Annual Report and Accounts 2020
| 45
Notes to the financial statements for the year ended 31 March 2020
Directors
Emoluments
Benefits in kind
Money purchase pension contributions
Total remuneration
Social security costs
2020
£'000
554
29
49
632
65
697
2019
£'000
489
27
37
553
61
614
The above 2020 disclosure includes a one-time discretionary settlement fee for loss of office of £30,000 for Nick Burrows
(2019: £nil).
Three Directors (2019: two) had retirement benefits accruing under money purchase pension schemes. Key management
personnel are considered to be the Directors. James McDonald was employed in February 2020 and there was a handover
period before he took the role of Finance Director. With Nick Burrows leaving in March 2020 he became key management
personnel and will be included in subsequent disclosures.
8. Tax charge/credit
Current tax
Current tax on profits for the year
Deferred tax
Decrease in recognised deferred tax asset
Total tax charge for the year
2020
£'000
–
159
159
2019
£'000
–
132
132
The differences between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to
profits for the year are as follows:
(Loss)/Profit before tax
(Loss)/Profit before tax multiplied by standard rate of corporation tax in the UK
of 19% (2019: 19%)
Expenses not deductible for tax purposes
Recognition of deferred tax on losses
Reversal of previously recognised deferred tax on losses
Movement in deferred tax not recognised for current year losses
Prior year adjustments
Tax charge for the year
2020
£'000
(602)
(114)
13
–
156
101
3
159
2019
£'000
1,017
193
(44)
(17)
_
–
–
132
46
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
Deferred tax asset
The movement is deferred tax is as follows:
At beginning of the year
Utilisation against taxable profits
(Reversal)/recognition of previously unrecognised deferred tax on losses
Decrease in relation to timing differences
At end of the year
2020
£'000
191
–
(149)
(10)
32
2019
£'000
323
(149)
47
(30)
191
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 £710,000 (2019: £395,000) has not been recognised in respect of
trading losses of £3,741,000 (2019: £2,327,000), which can be carried forward indefinitely.
The Chancellor recently announced that the main rate of UK corporation tax is to remain at 19%. This rate of corporation tax
has been reflected in the calculation of the deferred tax.
9. Dividends
Final dividend for the year ended 31 March 2019 – 2.0p per share
Interim dividend for the year ended 31 March 2020 – 1.0p per share
Total dividend paid
The Directors do not propose a final dividend (2019: 2.0p per share).
10. Earnings per ordinary share
2020
£'000
319
160
479
2019
£'000
158
158
316
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:
(Loss)/Profit for the year
Average number of shares in issue
Effect of dilutive options
2020
£(761,000)
15,972,842
–
2019
£885,000
15,798,113
481,416
Average number of shares in issue plus dilutive options
15,972,842
16,279,529
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
(4.76)p
(4.76)p
5.60p
5.44p
Triad Group Plc Annual Report and Accounts 2020
| 47
Notes to the financial statements for the year ended 31 March 2020
Purchased software
£'000
272
17
(163)
126
–
–
126
268
6
(163)
111
5
–
116
10
15
11. Intangible assets
Group and Company
Cost
At 31 March 2018
Additions
Disposals
At 31 March 2019
Additions
Disposals
At 31 March 2020
Accumulated amortisation/impairment
At 31 March 2018
Charge for the year
Disposals
At 31 March 2019
Charge for the year
Disposals
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
48
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
12. Property, plant and equipment
Group and company
Computer
hardware
£'000
Fixtures
& fittings
£'000
Motor
vehicles
£'000
Cost
At 31 March 2018
Additions
Disposals
At 31 March 2019
Additions
Disposals
At 31 March 2020
Accumulated depreciation
At 31 March 2018
Charge for the year
Disposals
At 31 March 2019
Charge for the year
Disposals
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
13. Leases
The Group as a lessee:
173
22
(16)
179
29
(17)
191
124
26
(16)
134
26
(17)
143
48
45
766
112
(484)
394
138
(30)
502
709
30
(484)
255
62
(30)
287
215
139
39
–
–
39
–
–
39
9
9
–
18
9
–
27
12
21
Total
£'000
978
134
(500)
612
167
(47)
732
842
65
(500)
407
97
(47)
457
275
205
The Group has lease contracts for its office premises with terms remaining ranging from 3 to 5 years. The Group has
the option to terminate one of its leases as disclosed in note 2. The lease liability has been calculated on the basis of
the termination option being taken. There are no other future cash outflows in relation to the lease to which the Group is
potentially exposed. Each lease is represented on the balance sheet as a right-of-use asset and a lease liability. Short-term
leases are not recognised and expensed to the profit and loss statement.
Triad Group Plc Annual Report and Accounts 2020
| 49
Notes to the financial statements for the year ended 31 March 2020
Right-of-use Assets
The carrying amounts of the right-of-use assets are as follows:
At 31 March 2019
Opening position
Amortisation
At 31 March 2020
Lease Liabilities
The carrying amount of the lease liabilities recognised are as follows:
At 31 March 2019
Opening position
Interest expense
Lease payments
At 31 March 2020
Land and buildings
£'000
788
(166)
622
Land and buildings
£'000
1,128
56
(246)
938
Total
£'000
788
(166)
622
Total
£'000
1,128
56
(246)
938
At the balance sheet date, the Group had outstanding commitments for future lease payments as follows:
Up to
3 months
£’000
54
Between
3 and 12 months
Between
1 and 2 years
Between
2 and 5 years
£'000
218
£'000
288
£'000
378
At 31 March 2020
Lease Liabilities
The Group as a lessor:
Finance lease receivables
The Group has entered into a lease arrangement considered to be a finance lease, representing rentals payable to the
Group for a rental of a proportion of a leased property. The carrying amounts of the lease receivable asset are as follows:
At 31 March 2019
Opening position
Interest received
Payments received
At 31 March 2020
50
| Triad Group Plc Annual Report and Accounts 2020
Land and buildings
£'000
420
20
(143)
297
Total
£'000
420
20
(143)
297
Notes to the financial statements for the year ended 31 March 2020
14. 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.
The registered office of Triad Special Systems is Huxley House, Weyside Park, Catteshall Lane, Godalming, Surrey GU7
1XE. The registered office of the other subsidiaries is Building 3 Caldecotte Lake Business Park, Caldecotte Lake Drive,
Caldecotte, Milton Keynes MK7 8LF.
15. Trade and other receivables
Group and company
Trade receivables
Less: provision for expected credit losses
Trade receivables-net
Contract assets
Other debtors
Trade and other receivables
Prepayments
2020
£'000
2,526
(26)
2,500
68
17
2,585
156
2,741
2019
£'000
2,984
(20)
2,964
58
95
3,117
216
3,333
The fair value of trade and other receivables approximates closely to their book value.
The lifetime expected credit losses on trade receivables as at 31 March 2020 is calculated as follows:
Group and company
Expected
default rate
Gross carrying
amount
Credit loss
allowance
Current
Up to 30 days past due
(A)
%
0.5
5.0
(B)
£'000
2,236
290
2,526
(A x B)
£'000
11
15
26
No provision has been recognised for contract assets and other debtors as they are expected to be fully recovered.
Triad Group Plc Annual Report and Accounts 2020
| 51
Notes to the financial statements for the year ended 31 March 2020
The lifetime expected credit losses on trade receivables as at 31 March 2019 were calculated as follows:
Group and company
Expected
default rate
Gross carrying
amount
Credit loss
allowance
Current
Up to 30 days past due
30 to 60 days past due
Over 60 days past due
Movements on the provision for expected credit loss are as follows:
Group and company
At beginning of the year
Charged to income statement
Credited to income statement
Written off during the year
At end of the year (credit loss allowance)
(A)
%
–
2.5
5.0
10.0
(B)
£'000
2,461
330
164
29
2,984
2020
£'000
20
6
–
–
26
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:
Group and company
Sterling
Euros
16. Cash and cash equivalents
Group and company
Cash available on demand
2020
£'000
2,566
19
2,585
2020
£'000
3,840
(A x B)
£'000
–
9
8
3
20
2019
£'000
45
–
(20)
(5)
20
2019
£'000
3,109
8
3,117
2019
£'000
4,604
The fair value of cash and cash equivalents approximates closely to their book value.
52
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
The carrying amount of the Group’s cash and cash equivalents is denominated in the following currencies:
Group and company
Sterling
Euros
2020
£'000
3,708
132
3,840
2019
£'000
4,504
100
4,604
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash, as detailed above, net
of any bank borrowings repayable on demand. There were no bank borrowings during the year.
17. Trade and other payables
Trade payables
Accruals
Owed to subsidiary
Contract liabilities
Other taxation and social security
Group
Company
2020
£’000
1,205
312
–
1,517
41
569
2,127
2019
£’000
1,617
301
–
1,918
43
519
2,480
2020
£’000
1,205
312
5
1,522
41
569
2,132
The majority of trade and other payables are settled within three months from the year end.
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
2020
£’000
1,475
25
1,500
2019
£’000
1,901
17
1,918
2020
£’000
1,480
25
1,505
2019
£’000
1,617
301
5
1,923
43
519
2,485
2019
£’000
1,906
17
1,923
Triad Group Plc Annual Report and Accounts 2020
| 53
Notes to the financial statements for the year ended 31 March 2020
18. Financial liabilities
Group and company
Current
Finance lease obligations
Non-current
Finance lease obligations
The carrying amount of finance lease obligations related to future lease payments on a motor vehicle.
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.
19. Provisions
Group and company
At 1 April 2019
Additions
Charged to income statement
Utilised in year
At 31 March 2020
The maturity profile of the present value of provisions is as follows:
Group and company
Current
Provision for property dilapidation
Non-current
Provision for property dilapidation
2020
£'000
–
–
197
2019
£'000
3
17
Provision for
property dilapidation
£’000
82
115
–
–
197
2019
£'000
–
–
82
The provision for property dilapidation covers the estimated future costs required to meet obligations under property leases
to redecorate and repair property.
54
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
20. Share capital
Ordinary shares of 1p each
Issued, called up and fully paid:
Number
Nominal value
2020
2019
15,979,979
£159,800
15,968,979
£159,690
During the year 11,000 1p ordinary shares were issued as a result of the exercise by employees of share options:
Number
Option price
Increase in Increase in share capital
Increase in Increase in share premium
11,000
11,000
13.5p
£110
£110
£1,375
£1,375
21. Share-based payments
At 31 March 2020, 817,600 options granted under employee share option schemes remain outstanding:
Date option granted
23 September 2011
18 September 2014
9 March 2018
Number
157,600
105,000
555,000
Exercise price
Period options exercisable
13.5p
11.0p
53.5p
23 September 2014 to 23 September 2021
18 September 2017 to 18 September 2024
9 March 2021 to 9 March 2028
Under the terms of the scheme, options vest after a period of three years continued employment and are subject to the
following performance conditions:
For options granted on 9 March 2018: 100% of the shares granted under an option will vest if the Company’s share price at
31 March 2021 has increased by 30% or more from the share price as at the date of grant. 50% of shares granted under an
option will vest if the Company’s share price at 31 March 2021 has increased by 15% from the share price as at the date of
grant. Between these upper and lower thresholds, awards vest on a straight-line basis.
For all other options: 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.
Options have been valued using the Black-Scholes option-pricing model. No performance conditions were included in the
fair value calculations.
No options were granted during the year (2019: nil).
The total expense recognised in the year is £28,000 (2019: £28,000).
Triad Group Plc Annual Report and Accounts 2020
| 55
Notes to the financial statements for the year ended 31 March 2020
A reconciliation of option movements over the year to 31 March 2020 is shown below:
Outstanding at start of year
Granted
Exercised
Forfeited
Outstanding at end of year
Exercisable at end of year
2020
2019
Number
of options
1,028,600
–
(11,000)
(200,000)
817,600
262,600
Weighted
average
exercise
price
Pence
37.7
–
13.5
27.4
40.3
12.5
Number of
options
1,413,600
–
(355,000)
(30,000)
1,028,600
398,600
Weighted
average
exercise
price
Pence
31.6
–
12.1
53.5
37.7
12.7
There were 11,000 options exercised during the year. The above figures include options held by Directors which are set out
in the Directors’ Remuneration Report on page 25.
The weighted average share price at the date of exercise for share options exercised during the period was 43.0p (2019:
52.3p). The options outstanding as at 31 March 2020 had an exercise price of 11.0p, 13.5p or 53.5p and a weighted average
remaining contractual life of 6.2 years (2019: 6.8 years).
22. Commitments
The Group has applied IFRS 16 on 1 April 2019 and therefore this note has been recorded for comparison purposes only.
The Group and Company had no capital commitments at 31 March 2020 (31 March 2019: £67,000).
The future undiscounted minimum lease payments which fall due are as follows:
Not later than 1 year
Later than 1 year and no later than 5 years
Restated*
2019
£'000
202
645
847
(*) the operating lease commitments disclosure at 31 March 2019 incorrectly included lease payments to be made following
a break clause of £532,000 based on the intention of the Company not to exercise the break and a rent prepayment of
£80,000. The disclosure previously recorded commitments not later than 1 year of £327,000 and later than 1 year and no
later than 5 years of £1,132,000.
The future minimum lease payments for 2019 represent operating leases under pre-IFRS16 accounting principles.
56
| Triad Group Plc Annual Report and Accounts 2020
Notes to the financial statements for the year ended 31 March 2020
The Group sublets part of its Godalming office. The future aggregate minimum lease payments to the Group under non-
cancellable operating leases are:
Not later than 1 year
Later than 1 year and no later than 5 years
23. Related party transactions
2019
£'000
119
–
119
The Group and Company rents one of its offices under a lease expiring in 2028, with a break clause in 2023. The current
annual rent of £215,000 was 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 this contract. The balance owed at the year end was £nil (2019: £nil).
Triad Group Plc Annual Report and Accounts 2020
| 57
58
| Triad Group Plc Annual Report and Accounts 2020
Five year record
For accounting periods commencing after 1 April 2018 the accounting treatment changed due to the introduction of IFRS 9
and IFRS 15. For the accounting period commencing 1 April 2019 further changes were made due to the introduction of IFRS
16. Therefore the accounting policies over the period detailed below will vary and be inconsistent.
Consolidated income statement
Years ended 31 March
Revenue
Gross profit
(Loss)/Profit before tax
Tax (charge)/credit
(Loss)/Profit after tax
Retained (loss)/profit for the financial year
Basic (loss)/earnings per share (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
2020
£’000
19,354
2,854
(602)
(159)
(761)
(761)
(4.76)
2020
£’000
1,236
6,581
2019
£’000
22,713
4,376
1,017
(132)
885
885
5.60
2019
£’000
411
7,937
2018
£’000
27,819
4,724
1,662
(38)
1,624
1,624
10.45
2018
£’000
463
7,736
(2,399)
(2,483)
(2,997)
(863)
4,555
160
660
104
3,631
4,555
(99)
5,766
160
659
104
4,843
5,766
(77)
5,125
156
619
104
4,246
5,125
2017
£’000
30,912
5,000
1,521
13
1,534
1,534
10.08
2017
£’000
503
7,299
(4,118)
(45)
3,639
155
605
104
2,775
3,639
2016
£’000
28,317
4,236
863
350
1,213
1,213
8.01
2016
£’000
483
5,638
(3,757)
(308)
2,056
151
562
104
1,239
2,056
Triad Group Plc Annual Report and Accounts 2020
| 59
Shareholders’ information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you have
any questions about your personal holding of the Company’s shares,
please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0371 384 2486
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 that 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:
James McDonald
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
The date of the AGM is to be confirmed. The Board are considering the
impact of Covid-19 on AGM arrangements and will publish the AGM notice
at the appropriate time.
Financial year ended 31 March 2021: expected announcement of results
Half-year
Full-year
November 2020
June 2021
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| Triad Group Plc Annual Report and Accounts 2020
Corporate information
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Tim Eckes, Client Services Director
James McDonald, Finance Director
Non-Executive Directors
Alistair Fulton
Chris Duckworth
Charlotte Rigg
Secretary and registered office
James McDonald
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 Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Solicitors
Freeths
Davy Avenue
Knowlhill
Milton Keynes
MK5 8HJ
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 2020
| 61
Godalming office:
Huxley House
Weyside Park
Catteshall Lane
Godalming
Surrey GU7 1XE
Milton Keynes office:
Building 3 Caldecotte Lake Business Park
Caldecotte Lake Drive
Milton Keynes MK7 8LF
01908 278450
www.triad.co.uk