TRICORN GROUP PLC
ANNUAL REPORT ANd ACCOUNTs 2012
THE fUTURE Of GLOb AL TUbULAR sOLUTIONs
21489-04 27/07/2012 PROOF 10 TrIcorn Group plc
ANNUAL REPORT ANd ACCOUNTs 2012
Tricorn Group plc is the holding company for a group of companies
that develop and manufacture pipe solutions to a growing and increasingly
international customer base.
Strategy
➤ To acquire and grow engineering based businesses that are supplying blue chip OEM
customers who in turn are focused on attractive end markets.
➤ The key elements of this approach are to
Drive for operational excellence, ensuring products and services are globally
competitive and that class leading quality and delivery performance is achieved.
Improve margins by the implementation of lean manufacturing, investing in employee
development, the resourcing of materials to low cost countries and the utilisation of
Group resources.
Growth. Organically by increasing share within its customers and developing new
customers. Inorganically through selective acquisitions where Tricorn’s management
expertise can generate sufficient added value.
ContentS
our market
04 Chairman’s and Chief Executive’s Statement
08 Board of Directors
09 Report of the Directors
13 Corporate Governance including
Remuneration Report
16 Report of the Independent Auditors
18 Group Statement of Comprehensive Income
19 Group Statement of Changes in Equity
20 Group Statement of Financial Position
21 Group Statement of Cash Flows
22 Notes to the Financial Statements
49 Company Statutory Financial Statements
(prepared under UK GAAP)
enerGy & uTIlITIes
fabricated tubular assemblies for diesel
engines and radiator sets used in power
generation, mining, oil and gas
TransporTaTIon
Nylon, rigid and hybrid pipe assemblies
for engines, brake systems, fuel sender
sub-systems used in both on and off
highway applications
aerospace
Rigid pipe assemblies for civil and military
aerospace applications
HiStoriCal Summary
➤ december 2001 — Listed on AIM
➤ June 2005
➤ June 2006
➤ June 2007
➤ March 2012 — Announced investment in China manufacturing facility
— Acquired Maxpower Automotive Limited
— China team based in Nanjing established
— Acquired RMdG Aerospace Limited
Our products are used in some of
the most demanding applications.
HigHligHtS
➤ Revenue increased by 14%
➤ 48% improvement in operating profit*
➤ EPs increased by 47% to 3.78p
➤ Well positioned to capitalise on south-East Asia markets
➤ Aerospace returned to profit
➤ balance sheet continues to strengthen
Summary (£’000) 2012 2011
24,706 21,764
sales revenue
1,198
Operating profit*
5.5%
Operating profit margin*
1,066
Profit before tax*
1,612
Cash & equivalents
-61
Net funds/(debt)
2.57p
Adjusted EPs*
0.1p
dividend
1,771
7.2%
1,622
2,468
586
3.78p
0.2p
* Before intangible asset amortisation, share-based payment charges,
interest rate swap and foreign exchange derivative valuations.
25,000
20,000
15,000
10,000
5,000
25,000
20,000
15,000
10,000
5,000
8.0%
6.0%
8.0%
revenue
(£’000)
6.0%
25,000
25,000
20,000
20,000
4.0%
15,000
15,000
10,000
10,000
0
0
2009/10
2010/11
2009/10
2011/12
2010/11
2011/12
5,000
5,000
2.0%
0.0%
4.0%
2.0%
0.0%
2009/10
2010/11
2009/10
2011/12
2010/11
2011/12
0
0
2009/10
2009/10
2010/11
2010/11
2011/12
2011/12
operating profit
margin (%)
8.0%
8.0%
6.0%
6.0%
4.0%
4.0%
2.0%
2.0%
0.0%
0.0%
2009/10
2009/10
2010/11
2010/11
2011/12
2011/12
net debt/CaSH
(£’000)
adjuSted earningS
per SHare (penCe)
1,000
1,000
500
0
-500
500
0
-500
-1,000
-1,000
2009/10
2010/11
2009/10
2011/12
2010/11
2011/12
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1,000
1,000
500
500
0
0
-500
-500
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2009/10
2010/11
2009/10
2011/12
2010/11
2011/12
-1,000
-1,000
2009/10
2009/10
2010/11
2010/11
2011/12
2011/12
4.0
4.0
3.5
3.5
3.0
3.0
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
revenue by SeCtor
2011/12 — %
43%
35%
22%
ENERGY & UTILITIES
TRANSPORTATION
AEROSPACE
2009/10
2009/10
2010/11
2010/11
2011/12
2011/12
0101
www.tricorn.uk.comOUR GovernanceOUR BUSIneSSOUR fInancIalS21489-04 27/07/2012 Proof 10 group OVERVIEW
Tricorn companies continue to meet the demands of
innovation and capability that make complex customer
requirements possible.
“We manufacture bespoke pipe systems that deliver quality, performance and innovation. This in turn
generates long term confidence in our business and cost benefits for our customers.” The following
example shows where our engineering teams have taken the challenge to raise the capability of pipe
system solutions.
CaSe Study
delivering tHe impoSSible —
multi bend one pieCe Solution
tHe opportunity
Our customers make engines that are designed to be
compact, cost efficient and meet tough new emissions
legislation. Winning new business on their latest Tier 1V
Engine models would be critical to future growth.
Tricorn were able to offer a unique engineered solution
where others could not.
tHe CHallenge
To manufacture a complex pipe system containing
multiple bends, angles and end forms without the use of
welded joints. This is impossible to produce using
conventional machinery.
our Solution
Our combined engineering teams designed and
manufactured a unique method of end forming once
the bending process had been complete. The result was
a single piece solution.
outCome
Our customer gained from the security of a quality and
performance enhanced product.
Our company gained from a long term business stream
on the most recent engine model for a global market.
02
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 triCorn'S global preSenCe
triCorn turnover
Tricorn supplies its products to a blue chip customer base. Although many of our products are supplied into the UK, we have significant
exposure to global markets through our customers. As a result approximately 85% of our product is ultimately destined for markets
outside the UK.
our turnover by deStination iS aS followS
However, a more repreSentative piCture of
our turnover by tHe final deStination of
our produCtS would be
UK — 73%
EUROPE —17%
REST OF WORLD — 10%
REST OF WORLD — 70%
EUROPE —15%
UK — 15%
UK
1 Head Office, Malvern
2 Malvern Tubular Components, Malvern
3 Redman fittings, Malvern
4 Maxpower Automotive, West bromwich
5 RMdG Aerospace, swadlincote, derbyshire
CHINA
6 Maxpower Automotive Components
Manufacturing, Wuxi, China
7 Tricorn representative Office, Nanjing, China
5
4
1
2 3
“approximately 85% of
our product is ultimately
destined for markets
outside the UK.”
2,3
4
5
6
7
6
03
www.tricorn.uk.comOUR GovernanceOUR BUSIneSSOUR fInancIalS21489-04 27/07/2012 Proof 10
CHairman’S ANd CHIEf EXECUTIVE’s sTATEMENT
fOR THE YEAR ENdEd 31 MARCH 2012
“Tricorn has delivered a record set of results with revenue
up 14%, operating profit margin up 31% and adjusted
earnings per share up 47%.
In light of this performance and our continued confidence
in the future prospects for the business we are pleased to
recommend a proposed doubling of our full year dividend
to 0.2p.”
Nick Paul CbE, Non-executive Chairman
performanCe in tHe year
We are pleased to report a record set of results with encouraging
progress across all divisions. We have invested in our facilities,
improved operational performance and continued to benefit from
our exposure to global markets.
Revenue grew by 14%, operating profit margin* increased by 31%
and adjusted earnings per share* increased 47% to 3.78p.
operational review
The Group operates three main business segments which are
focused on the Energy & Utilities, Transportation and Aerospace
sectors. The businesses serve a global blue chip OEM customer
base, many of whom have major facilities in the UK and the rest of
Europe. The final product is then shipped into world markets from
these facilities which effectively extends the Group’s global reach
and reduces its dependency on the UK economy.
At the same time we have remained focused on strengthening the
balance sheet with net cash at the year end of £0.586m. Cash and
cash equivalents were up 53% to £2.468m at the year end and, as
announced at the time of our interim results, the term loan, which
was not due to be repaid until August 2012, was repaid in full in
October 2011.
Revenue has increased by 14% over the previous year with all
divisions experiencing strong demand through the final quarter.
Operating profit margins are ahead of last year at both Group and
divisional levels. Overall, the 1.7% year on year improvement in
operating margin to 7.2% was comfortably within our underlying
target range.
based on the progress we have made and our confidence in future
prospects, the board is recommending the payment of a final
dividend of 0.13p per share. A full year dividend of 0.2p represents
a 100% increase over the previous year and reinforces our
commitment to a longer term progressive dividend policy.
Whilst all of the divisions have made good progress during the year
the performance of the Aerospace division has been particularly
encouraging with a strong second half resulting in the business
returning to profitability for the full year.
At the same time we remained focused on continuing to
strengthen the balance sheet. Inventory was reduced by a further
5% despite the higher volumes as we continued to closely manage
working capital.
We pride ourselves in meeting customer requirements for high variety, small batch
production
* before intangible asset amortisation, share-based charges, interest rate swap and foreign exchange derivative valuation.
04
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 energy & utilitieS
Malvern Tubular Components specialises in fabricated and manipulated
tubular assemblies for large diesel engines and radiator sets used within
the Energy sector, principally power generation, mining and oil and gas
applications. This was combined earlier in the year with the Redman fittings
business which supplies major polyethylene pipe manufacturers with a
patented pipe jointing system.
12,000
12,000
10,000
10,000
8,000
8,000
Turnover £’000
Turnover £’000
Profit Before Tax £’000
Profit Before Tax £’000
1,000
1,000
800
800
600
600
Revenue for the division was up 11% on the previous year and operating
profit margin improved to 9.2%.
The business continues to grow its existing customer base by developing
closer and more collaborative relationships. At the same time the
investment in extending capabilities in bending and design is enabling new
business to be won with new customers which bodes well for future
growth. The engineering team has been strengthened to ensure that the
business can continue to maximise the potential opportunities for revenue
growth and deliver further operational improvements.
tranSportation
Maxpower Automotive is focused on nylon, rigid and hybrid tubular
products for engines, braking systems and fuel sender sub-systems.
6,000
6,000
Turnover £’000
Turnover £’000
Profit Before Tax £’000
Profit Before Tax £’000
12,000
4,000
12,000
4,000
10,000
2,000
10,000
2,000
8,000
8,000
0
0
12,000
12,000
6,000
10,000
6,000
10,000
4,000
8,000
10,000
2,000
6,000
4,000
8,000
10,000
2,000
6,000
8,000
0
0
8,000
4,000
4,000
6,000
2,000
6,000
2,000
4,000
0
0
4,000
10,000
10,000
2,000
8,000
2,000
8,000
400
1,000
400
1,000
200
800
200
800
Turnover £’000
Turnover £’000
Profit Before Tax £’000
Profit Before Tax £’000
0
600
1,000
1,000
0
600
2010/11
2010/11
2011/12
2011/12
2010/11
2010/11
2011/12
2011/12
Turnover £’000
Turnover £’000
800
400
400
800
Profit Before Tax £’000
Profit Before Tax £’000
2010/11
2010/11
2011/12
2011/12
800
600
200
200
600
800
700
400
0
600
700
400
0
600
2010/11
2010/11
2011/12
2011/12
Turnover £’000
Turnover £’000
500
200
400
500
200
Profit Before Tax £’000
400
Profit Before Tax £’000
2010/11
2010/11
2011/12
2011/12
0
0
800
800
300
300
200
700
700
200
2010/11
2010/11
2011/12
2011/12
Turnover £’000
Turnover £’000
600
100
600
100
Profit Before Tax £’000
Profit Before Tax £’000
Revenue increased 21% year on year with changes in emissions legislation
and favourable market conditions driving demand. Product capabilities have
also been extended both in terms of materials and systems and this is likely
to yield significant revenue benefits in the mid term.
The focus on lean implementation has also progressed well and operating
margins increased to 8.8% in the year.
aeroSpaCe
RMdG Aerospace supplies rigid pipe assemblies used in a variety of
applications within the Aerospace sector. Revenue was up 8% on the
previous year with demand strengthening through the year.
The focus on supplier development and selection, underpinned by long
term agreements, has ensured cost stability and the development of a
reliable supply base for materials and goods. This has provided the platform
for further operational improvements, with the business delivering
significant improvements in operating margins and consequently returning
to profit in the second half and for the year as a whole.
With improvements continuing to be made, additional business being won
and growing demand, the board anticipates further improvements within
the division over the next year.
0
0
6,000
10,000
10,000
6,000
2010/11
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
500
0
800
500
0
800
400
700
400
700
2010/11
2010/11
2011/12
2011/12
8,000
4,000
4,000
8,000
Turnover £’000
Turnover £’000
300
600
300
Profit Before Tax £’000
600
Profit Before Tax £’000
6,000
6,000
2,000
2,000
6,000
6,000
5,000
5,000
0
4,000
4,000
0
2010/11
4,000
2,000
4,000
2,000
3,000
3,000
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
0
0
6,000
6,000
2,000
2,000
2010/11
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
5,000
1,000
5,000
1,000
200
500
50
100
400
0
0
300
-50
200
500
50
100
400
0
0
300
-50
200
-100
200
-100
2010/11
2010/11
2011/12
2011/12
0
50
-200
0
50
-200
0
-250
0
-250
2010/11
2010/11
2011/12
2011/12
Turnover £’000
Turnover £’000
Profit Before Tax £’000
Profit Before Tax £’000
100
-150
100
-150
Turnover £’000
Turnover £’000
-50
-300
Profit Before Tax £’000
Profit Before Tax £’000
-50
-300
4,000
4,000
0
0
6,000
6,000
2010/11
3,000
5,000
3,000
5,000
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
2,000
4,000
2,000
4,000
1,000
3,000
1,000
3,000
0
0
2,000
2,000
2010/11
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
1,000
1,000
0
0
2010/11
2010/11
2010/11
2010/11
2011/12
2011/12
2011/12
2011/12
-100
-350
50
-100
-350
50
-150
-150
0
0
-200
-50
-200
-50
-250
-100
-250
-100
-300
-150
-300
-150
-350
-200
-350
-200
-250
-250
-300
-300
-350
-350
2010/11
2010/11
2011/12
2011/12
2010/11
2010/11
2011/12
2011/12
2010/11
2010/11
2011/12
2011/12
05
www.tricorn.uk.comOUR GovernanceOUR BUSIneSSOUR fInancIalS21489-04 27/07/2012 Proof 10 CHairman'S ANd CHIEf EXECUTIVE’s sTATEMENT continued
fOR THE YEAR ENdEd 31 MARCH 2012
“An improvement in top line growth across all of
the Group’s sectors enabled a 14% increase in revenue
to £24.706m (2011: 21.764m), whilst continued
improvements in operational performance saw gross
margins improve to 33%.”
expanSion in CHina
In early March 2012, the Company announced its intention to
establish a manufacturing facility in China as a key part of its
strategic development in south-East Asia. The Company has had a
purchasing office in China for the last seven years and, as a result, a
well-developed network of subcontractors and suppliers. The
Company is therefore ideally placed to support its customers in
localising their supply chain which in turn provides significant
additional opportunities for the Group.
The process of registering the local company has been completed.
The Company now has a facility and the installation of plant and
equipment will commence shortly. Initial investment is estimated to
be approximately £1.0m and the Company remains firmly on track
to have the facility operational by the end of 2012 and earnings
enhancing in the financial year ending 31 March 2014.
finanCial review
The Group has had a very productive year, delivering a 52%
increase in profit before tax* on record turnover of £24.706m. In
addition, it has remained highly cash generative, returning to a cash
positive position in a year during which it has repaid its term loan
and invested £0.9m in new capital projects, as well as announcing its
intention to invest an initial £1.0m in the forthcoming year in new
manufacturing facilities in China.
In line with the Company’s progressive dividend policy the board is
recommending the payment of a final dividend of 0.13p per share,
giving a total dividend of 0.2p for the financial year ended 31 March
2012. The final dividend will be paid on 19 October 2012 to all
shareholders on the register on 5 October 2012.
£2.468m
Cash & Equivalent up 53%
0.2p per share
Payment to shareholders doubled
inCome Statement
An improvement in top line growth across all of the Group’s
sectors enabled a 14% increase in revenue to £24.706m (2011:
£21.764m), whilst continued improvements in operational
performance saw gross margins improve to 33%.
With continued control over administration and distribution costs,
operating profit* was up 48% to £1.771m (2011: £1.198m) and
operating profit margins improved 31% to 7.2% (2011: 5.5%).
After deducting intangible asset amortisation, share-based payment
charges and credits relating to foreign exchange derivative
contracts, operating profit was up 56% to £1.604m
(2011: £1.026m).
Net finance charges for the year were £0.078m (2011: £0.099m).
On 30 March 2012, the Group gave notice to settle its cap and
collar arrangement with its bankers. As a result the full year finance
charge includes a credit relating to the reversal of the swap
valuation of £0.071m (2011: £0.033m), as well as a final settlement
charge of £0.026m.
Unadjusted profit before tax for the financial year was up 65% to
£1.526m (2011: £0.927m). basic EPs was up 63% at 3.49p (2011:
2.14p) and, after adjusting for one-off costs EPs* was up 47% to
3.78p (2011: 2.57p).
£24.706m
sales revenue up 14%
7.2%
Operating margins up 31%
* before intangible asset amortisation, share-based charges, interest rate swap and foreign exchange derivative valuation.
Investment in our tube manipulation capabilities positions us well for future growth
06
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 CaSH flow
The Group’s net cash flow from operating activities was £1.296m,
an increase of 34% over last financial year’s result of £0.968m. This
came as a result of a strong profit to cash flow conversion, and
despite higher taxation payments in the year.
The Group continued to make investments in capital projects
during the year, with expenditure of £0.907m including items taken
on finance leases. Improvements in operational efficiency are a key
driver for all of the Group’s capital expenditure.
In June 2011, to satisfy institutional demand, the Group sold
875,000 shares that it held in Treasury. This resulted in a cash inflow
of £0.278m, net of fees, and helped to improve cash and
equivalents to £2.468m at the year end, an increase of £0.856m
(53%) over the previous year end balance of £1.612m.
As part of its ongoing review of its borrowings facilities and
requirements the Group repaid its term loan facility, through a
payment of £0.250m, on 20 October 2011. This facility had not
been due for full repayment until August 2012.
As a result of the above activities the Group reported a net cash
position of £0.586m at 31 March 2012. This compares to a net
debt position of £0.061m at 31 March 2011.
balanCe SHeet
At the year end, the total gross assets of the Group increased to
£13.997m (2011: 12.022m), predominantly on the back of the
increased expenditure on capital projects and the increase in cash
and equivalents in the year.
despite higher trading volumes, the Group was able to drive a
further reduction in inventory in the year of £0.158m to £2.929m
(2011: £3.087). Total working capital at the year end saw a modest
increase to £4.172m (2011: £3.891m).
The Group continues to develop its global presence
outlook
Our alignment with major global OEM customers and our
expansion of manufacturing to serve the expanding markets of
south-East Asia positions us well for the future and we are very
optimistic about mid term growth opportunities.
Tricorn has a very sound basis for future growth. With our proven
ability to deliver operational improvements we are confident of
making further progress in the current year.
nick paul cBe
Chairman
11 June 2012
people
We are deeply grateful for the energy, passion and skills of our
people and we continue to invest in their development.
Mike Welburn
Chief Executive
11 June 2012
We have extended our National Vocational Qualification
programme to further support the development of the business
and this continues to provide a firm foundation for further
operational improvement.
Michael Greensmith has announced his intention to step down
from his role as Company secretary at this year’s AGM. We would
like to thank him for his contribution to the business over many
years. Phil Lee will take over the role of Company secretary in
addition to his current responsibilities as Group finance director.
07
www.tricorn.uk.comOUR GovernanceOUR BUSIneSSOUR fInancIalS21489-04 27/07/2012 Proof 10
board Of dIRECTORs
fOR THE YEAR ENdEd 31 MARCH 2012
ExEcutivE DirEctors
mike welburn
chief executive officer
Joined Tricorn in April 2003, appointed to the board in March 2004 and as Chief Executive in
November 2007. He had previously been with IMI plc for 18 years where he had held a number of
senior roles within the fluid Power division. This included responsibility for European Operations and
Global OEM strategy.
pHil lee
Group Finance Director
Joined Tricorn in January 2009 and appointed to the board in february 2009. He had previously been
at Rolls-Royce plc for nine years working in a number of roles including finance director of distributed
Generation systems (part of the Rolls-Royce Energy business). Prior to Rolls-Royce he had been with
National Grid Plc.
david leakey
Group sales Director
Joined Tricorn and appointed to the board in June 2011. He had previously spent 27 years working at
Norgren Ltd, the Motion and fluid Controls division of IMI Plc. He has most recently held the role of
Global sales director in the Energy sector, with responsibility for the global business development of
the company’s products into the oil and gas markets. david has also held the position of sales director
in Norgren’s Life sciences and Automotive sectors.
NoN-ExEcutivE DirEctors
niCk paul Cbe
non-executive chairman
Appointed to the board as non-executive Chairman in October 2001. Chairman of the Nominations
Committee and member of the Remuneration and Audit Committees. He has a wealth of international
business experience and had previously been deputy Chief Executive of IMI plc. He has also been
Chairman of the Regional development Agency, Advantage West Midlands, and Chairman of Midlands
Expressway Limited. In the past he has been Chairman of the West Midlands CbI and non-executive
director of John Laing Homes plc and sig plc. He is currently Chairman of severn Valley Railway (Holdings) plc.
roger allSop
non-executive Director
Chief Executive of Tricorn up to 2002 after which he became a non-executive director. Chairman of
the Audit and Remuneration Committees and a member of the Nomination Committee. He was
previously managing director of Westwood dawes plc and non-executive director of Netcall plc.
CommitteeS
audit committee
Roger Allsop – Chairman
Nick Paul
Michael Greensmith – secretary
08
nomination committee
Nick Paul – Chairman
Roger Allsop
Michael Greensmith – secretary
remuneration committee
Roger Allsop – Chairman
Nick Paul
Michael Greensmith – secretary
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 report Of THE dIRECTORs
fOR THE YEAR ENdEd 31 MARCH 2012
The directors present their annual report together with the audited financial statements for the Group for the year ended
31 March 2012.
prinCipal aCtivity
Tricorn Group plc is the parent company of a group of specialist engineering subsidiaries whose activities incorporate high precision tube
manipulation, systems engineering and specialist fittings.
buSineSS review
A review of the progress of the Group during the year and its prospects for the future are included in the Chairman's and Chief
Executive’s statement. There was a profit for the year after taxation amounting to £1.156m (2011: £0.687m). As part of a longer term
progressive dividend policy, the board has recommended the payment of a final dividend of 0.13p per share, giving a full year dividend of
0.2p per share.
prinCipal riSkS and unCertaintieS
The management of the business and the nature of the Group’s strategy are subject to a number of risks.
The directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks
identified below. Where possible, processes are in place to monitor and mitigate such risks. The directors have set out below the principal
risks facing the business.
EcoNomic climatE
The Group is exposed to global markets through both its customer base and the market sectors that its serves. As a result there is
constant monitoring of the economic environment by the board to ensure that the Group responds to economic changes appropriately
in order to ensure that the risk of any impact is mitigated.
supply chaiN
At an operational and strategic level the Group ensures that it develops close relationships with its customers and its suppliers. by doing
this it is in a position to understand the changing nature of sourcing and supply chain strategy quickly and respond accordingly to any risks
that this might pose to the Group.
compEtitioN
The Group ensures that it is constantly monitoring its competitive environment in order to respond to competitive pressures as well as
taking advantage of any opportunities that are presented to it. Regular reviews of market intelligence ensure that the Group manages its
competition risk.
opEratioNal
A focus on operational improvement ensures that the Group’s products remain reliable and of the highest quality. Recruiting, retaining,
developing and motivating staff also continue to be a key priority for the Group. With operational performance being such a high priority
for the Group, risks are identified and managed on a regular basis.
ENviroNmENtal
The Group reviews the risk that its activities place on the environment through the promotion of green initiatives wherever possible.
09
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10our GOVERNANCEour bUsINEssour fINANCIALs report Of THE dIRECTORs continued
fOR THE YEAR ENdEd 31 MARCH 2012
finanCial riSkS and management
The Group’s principal financial instruments comprise an invoice discounting facility, hire purchase and finance lease contracts, cash and
short term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various
other financial instruments such as trade receivables and trade payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, commodity price risk, foreign currency risk,
and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.
iNtErEst ratE risk
The policy of the Group is to manage its interest cost using a mix of fixed and variable rate debt. The Group’s exposure to interest rate
fluctuations on its borrowings is currently managed by the use of floating facilities. The Group finances specific large plant acquisitions via
hire purchase or finance lease contracts. The interest rate risk on positive cash balances is not considered to be significant.
liquiDity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits, bank loans,
overdrafts, invoice discounting and finance lease and hire purchase contracts. Money on deposit is held on treasury reserve, partly to
finance working capital and also to help finance future acquisitions.
commoDity pricE risk
The exposure of the Group to the price of steel is high; therefore, selling prices are monitored regularly to reduce the impact of such risk
and opportunities to reduce material costs are explored constantly. The Group has partly responded to this risk by sourcing materials in
low cost countries. The Group also looks to recharge any increased cost of commodities to customers.
ForEigN currENcy risk
Certain purchases and sales are made in foreign currencies. In order to minimise the impact of currency movements the Group utilises
short term forward currency contracts. such cover is determined by written policies set by the board. foreign exchange differences on
retranslation of foreign currency assets and liabilities are taken to the Group statement of comprehensive income.
crEDit risk
The Group trades with only recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit
terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the
Group’s exposure to bad debts is not significant.
otHer non-finanCial riSkS
The Group supplies products to a large number of customers and works with a number of key suppliers. successful management of this
process is key to delivering the results of the Group. This is also underpinned by retention and training of our staff to ensure that our
knowledge and skills are maintained.
direCtorS
The present membership of the board is set out below.
N C Paul CbE
R Allsop
M I Welburn
P Lee
d E Leakey (appointed 3 June 2011)
N silverthorne resigned as a director of the Company on 31 May 2011.
SHare Capital
details of the Company’s share capital are given in note 25 to the financial statements. The Group’s policy for managing capital and
financing to support the activities of the Group is detailed in note 22 to the financial statements.
10
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 SubStantial SHareHoldingS
The only interests in excess of 3% of the issued share capital of the Company, which have been notified as at 22 May 2012, were as follows:
R Allsop
Hargreave Hale Limited
J M finn & Co Limited
Rock Nominees Limited (account 501198)
Quilter Nominees Limited
Ordinary
shares of
10 pence each
Number
Percentage
of capital
%
11,220,000
7,397,386
1,797,834
1,370,150
1,025,000
33.60
22.15
5.38
4.10
3.07
HealtH and Safety
The Group recognises its responsibility to ensure that its employees work in as safe a working environment as possible. Checks are also
implemented to ensure its customers comply with Health and safety legislation.
payment to SupplierS
It is the Group’s policy to agree appropriate terms and conditions for its transactions with suppliers by means ranging from standard terms
and conditions to individually negotiated contracts and to pay suppliers according to agreed terms and conditions, provided that the
supplier meets those terms and conditions. The Group does not have a standard or code which deals specifically with the payment of
suppliers.
Group trade payables at the year end amount to 54 days of average supplies (2011: 61 days). The Company trade payables are 48 days
(2011: 55 days).
direCtorS’ reSponSibilitieS for tHe group finanCial StatementS
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 have elected to
prepare Group financial statements in accordance with International financial Reporting standards as adopted by the European Union
(IfRs). Under company law the directors must not approve the Group financial statements unless they are satisfied that they give a true
and fair view of the state of affairs and profit or loss of the Group for that period. In preparing these Group financial statements, the
directors are required to:
select suitable accounting policies and then apply them consistently
–
– make judgements and estimates that are reasonable and prudent
–
state whether applicable IfRs have been followed, subject to any material departures disclosed and explained in the
financial statements
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will
continue in business.
–
11
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10our GOVERNANCEour bUsINEssour fINANCIALs
report Of THE dIRECTORs continued
fOR THE YEAR ENdEd 31 MARCH 2012
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions
and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Group financial
statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors confirm that:
● so far as each director is aware, there is no relevant audit information of which the Group’s auditors are unaware; and
● the directors have taken all steps that they ought to have taken, as directors in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
auditorS
Grant Thornton UK LLP offer themselves for reappointment as auditors in accordance with section 489 of the Companies Act 2006.
ON bEHALf Of THE bOARd
M I Welburn
director
11 June 2012
12
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 Corporate GOVERNANCE
fOR THE YEAR ENdEd 31 MARCH 2012
direCtorS
The directors support the concept of an effective board leading and controlling the Group. The board is responsible for approving the
Group’s policy and strategy. It meets on a regular basis and has a schedule of matters specifically reserved to it for decision. Management
supply the board with appropriate and timely information and the directors are free to seek any further information they consider
necessary. All directors have access to advice from the Company secretary and independent professional advice at the Company’s
expense.
The board consists of three executive directors, who hold the key operational positions in the Group, and two non-executive directors,
who bring a breadth of experience and knowledge. This provides a balance whereby the board’s decision making cannot be dominated
by an individual. The Chairman of the board is N C Paul CbE and the other non-executive director is R Allsop. The board approves
the strategic decisions of the Group. The Group’s business is run on a day to day basis by M I Welburn, P Lee and d E Leakey with
M I Welburn having overall responsibility as the Chief Executive.
relationS witH SHareHolderS
The Group values the views of its shareholders and recognises their interest in the Group’s strategy and performance. The Annual General
Meeting will be used to communicate with private investors and they are encouraged to participate. The directors will be available to
answer questions. separate resolutions will be proposed on each issue so that they can be given proper consideration and there will be a
resolution to approve the annual report and accounts.
internal Control
The board is responsible for maintaining a strong system of internal control to safeguard shareholders’ investment and the Group’s assets
and for reviewing its effectiveness. The system of internal control is designed to provide reasonable, but not absolute, assurance against
material misstatement or loss.
An audit committee has been established comprising the non-executive directors which is chaired by R Allsop. The committee meets at
least twice per annum and is responsible for ensuring that the financial performance of the Group is properly monitored and reported on
as well as meeting the auditors and reviewing any reports from the auditors regarding the financial statements and internal control systems.
The board has considered the need for an internal audit function but has decided the size of the Group does not justify it at present.
However, it will keep the decision under annual review.
board StruCture
The key features of the Group’s system of governance are as follows:
–
the Group is headed by an effective board, which leads and controls it;
–
there is a clear division of responsibilities in running the board and running the Group’s business;
–
the board comprises a reasonable balance between executive and non-executive directors; and
–
the board receives and reviews on a timely basis financial and operating information appropriate to be able to discharge its duties.
13
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10our GOVERNANCEour bUsINEssour fINANCIALs Corporate GOVERNANCE continued
fOR THE YEAR ENdEd 31 MARCH 2012
going ConCern
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. detailed cash flow forecasts have been prepared which highlight that the Group has sufficient cash
headroom to support its activities. The key assumptions in these forecasts have been sensitised and no issues arise which lead to any
concern regarding the operations or financing of the Group. for this reason, the directors continue to adopt the going concern basis in
preparing the financial statements.
direCtorS’ remuneration
The board recognises that directors’ remuneration is of legitimate concern to the shareholders and is committed to following current best
practice. The Group operates within a competitive environment, performance depends on the individual contributions of the directors and
employees and the Group believes in rewarding vision and innovation.
poliCy on exeCutive direCtorS’ remuneration
detail of individual directors’ remuneration is set out in note 5 to the financial statements. The policy of the board is to provide executive
remuneration packages designed to attract, motivate and retain directors of the calibre necessary to maintain the Group’s position and to
reward them for enhancing shareholder value and return. It aims to provide sufficient levels of remuneration to do this, but to avoid paying
more than is necessary and reflects the directors’ responsibilities. A separate remuneration committee has been established comprising
the non-executive directors and which is chaired by R Allsop.
baSiC annual Salary
The Remuneration Committee reviews each executive director’s basic salary annually. In deciding upon appropriate levels of
remuneration the board believes that the Group should offer levels of base pay reflecting individual responsibilities and which are
commensurate with similar jobs in other business sectors.
annual bonuS paymentS, benefitS and penSion arrangementS
M I Welburn, P Lee and d E Leakey participate in a performance related bonus arrangement through Tricorn Group plc.
M I Welburn, P Lee and d E Leakey benefit from the provision of private medical insurance, the provision of company cars or car
allowance and are eligible to participate in a contributory pension scheme.
R Allsop and N C Paul CbE receive no bonus, pension or benefits in kind.
notiCe periodS
M I Welburn has a service agreement with the Company which is terminable on not less than 12 months' written notice given by either
party to the other at any time. P Lee has a service agreement with the Company which is terminable on not less than six months' written
notice given by either party to the other at any time. d E Leakey has a service agreement with the Company which is terminable on not
less than three months' written notice given by either party to the other at any time.
N C Paul CbE and R Allsop have letters of appointment with the Company which are terminable upon six months’ written notice being
given by either party.
14
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 SHare option inCentiveS
The Company has adopted a number of individual unapproved and enterprise management incentive scheme share option agreements to
motivate and retain key personnel of the Group. At 31 March 2012 the following options were held by the directors:
At beginning
of period
Number
300,000
361,844
1,000,000
—
200,000
150,000
500,000
921,000
1,263,156
Lapsed
during
the year
Number
—
—
—
—
—
—
—
—
—
unapproved share options
N C Paul CbE
M I Welburn
M I Welburn
d E Leakey
enterprise management scheme
(eMI) options
N silverthorne
N silverthorne
P Lee
P Lee
M I Welburn
Granted
during
the year
Number
—
—
—
500,000
Exercised
during
the year
Number
at end
of year
number
Exercise
price
£
—
—
300,000
361,844
— 1,000,000
—
500,000
—
—
—
—
—
(200,000)
(150,000)
—
—
—
—
500,000
921,000
— 1,263,156
0.10
0.10
0.10
0.30
0.10
0.20
0.10
0.10
0.10
unapproved SHare optionS
N C Paul’s option, which was granted on 16 september 2010, has vested and will remain in force for ten years.
M I Welburn’s unapproved share option was granted on 16 september 2010, over 361,844 shares. This scheme has vested and is in force
for ten years with an exercise price of 10p per share. The unapproved options over 1,000,000 shares for M I Welburn were granted under
the Group’s LTIP and vest in tranches of 200,000 shares once the share price has achieved the trigger points of 20p, 25p, 30p, 35p and 40p
for ten consecutive days.
d E Leakey was granted an unapproved option over 500,000 shares at 30p on 6 June 2011. The option is exercisable after three months'
continuous employment. This option is in force for ten years and does not have performance conditions attached to it.
emi optionS
M I Welburn’s EMI share option for 1,263,156 shares was granted on 5 August 2010. This scheme has vested and is in force for ten years
with an exercise price of 10p per share.
P Lee was granted an EMI option over 500,000 shares at 10p on 31 March 2009. The first 250,000 are exercisable after three months'
continuous employment. The second 250,000 are exercisable after a further 12 months' continuous employment. This option is in force
for ten years and does not have performance conditions attached to it. In addition, a further 921,000 shares were granted on 5 August
2010, 736,800 of which have vested at 31 March 2012. These options vest in tranches of 184,200 shares once the share price has achieved
the trigger points of 20p, 25p, 30p, 35p and 40p for ten consecutive days.
The exercise periods for share options were set by the Remuneration Committee in order to incentivise and retain key executives.
All share disposals will be limited to one-third of the option in any given year without prior board approval. The market price of the
Company’s shares at 31 March 2012 was 33.75p (31 March 2011: 18.50p) and the range during the year was 23.00p to 38.25p
(2011: 6.70p to 21.70p).
15
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10our GOVERNANCEour bUsINEssour fINANCIALs report Of THE INdEPENdENT AUdITORs
TO THE MEMbERs Of TRICORN GROUP PLC
We have audited the Group financial statements of Tricorn Group plc for the year ended 31 March 2012 which comprise the Group
statement of comprehensive income, the Group statement of changes in equity, the Group statement of financial position, the Group
statement of cash flows and the related notes. 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.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have
formed.
reSpeCtive reSponSibilitieS of direCtorS and auditorS
As explained more fully in the directors’ Responsibilities statement set out on pages 11 and 12, the directors are responsible for the
preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the Group financial statements in accordance with applicable law and International standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices board’s (APb’s) Ethical standards for Auditors.
SCope of tHe audit of tHe finanCial StatementS
A description of the scope of an audit of financial statements is provided on the APb’s website at www.frc.org.uk/apb/scope/private.cfm.
opinion on finanCial StatementS
In our opinion the Group financial statements:
● give a true and fair view of the state of the Group’s affairs as at 31 March 2012 and of its profit for the year then ended;
● have been properly prepared in accordance with IfRs as adopted by the European Union; and
● have been prepared in accordance with the requirements of the Companies Act 2006.
Separate opinion in relation to ifrS
As explained in note 2 to the Group financial statements, the Group in addition to complying with its legal obligation to comply with IfRss
as adopted by the European Union, has also complied with IfRss as issued by the International Accounting standards board (IAsb).
In our opinion the Group financial statements comply with IfRss as issued by the IAsb.
opinion on otHer matter preSCribed by tHe CompanieS aCt 2006
In our opinion the information given in the Report of the directors for the financial year for which the Group financial statements are
prepared is consistent with the Group financial statements.
matterS on wHiCH we are reQuired to report by exCeption
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:
● 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.
otHer matter
We have reported separately on the parent company financial statements of Tricorn Group plc for the year ended 31 March 2012.
David Munton
senior statutory Auditor
for and on behalf of Grant Thornton UK LLP
statutory Auditor, Chartered Accountants
birmingham
11 June 2012
16
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10
Tricorn Group plc
Group Consolidated
Financial Statements
For the year ended 31 March 2012
Company number 1999619
contents
18 Group statement of Comprehensive Income
19 Group statement of Changes in Equity
20 Group statement of financial Position
21 Group statement of Cash flows
17
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS group sTATEMENT Of COMPREHENsIVE INCOME
fOR THE YEAR ENdEd 31 MARCH 2012
notes
3
3
12
8
8
9
3
10
10
2012
£’000
24,706
(16,485)
8,221
(1,017)
(5,433)
2011
£’000
21,764
(14,845)
6,919
(925)
(4,796)
1,771
1,198
(118)
(54)
5
4
(82)
1,526
(117)
(44)
(11)
1,026
5
(104)
927
(370)
(240)
1,156
1,156
3.49p
3.39p
687
687
2.14p
2.12p
3/4
1,604
revenue
Cost of sales
Gross profit
distribution costs
Administration costs
operating profit before intangible asset amortisation, fair value adjustments
for foreign exchange contracts and share-based payment charges
Intangible asset amortisation
share-based payment charge
fair value change relating to forward exchange contracts
operating profit
finance income
finance costs
profit before tax
Income tax expense
profit for the year and total comprehensive income
attributable to:
Equity holders of the parent company
earnings per share:
basic earnings per share
diluted earnings per share
All of the activities of the Group are classed as continuing.
The accompanying notes form an integral part of these financial statements.
18
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 group sTATEMENT Of CHANGEs IN EQUITY
fOR THE YEAR ENdEd 31 MARCH 2012
share-
based
payment
reserve
£’000
Investment
in own
shares
£’000
profit
and loss
account
£’000
share
capital
£’000
3,302
2
—
Balance at 1 april 2010
Transactions with owners
Profit and Total Comprehensive
income
Balance at 31 March 2011
3,304
Issue of new shares
sale of Treasury shares
share-based payment charge
share-based payment reserve
transfer
dividends paid
Total transactions with owners
Profit and Total Comprehensive
income
35
—
—
—
—
35
—
share
premium
£’000
Merger
reserve
£’000
1,448
1,388
—
—
1,448
15
229
—
—
—
244
—
—
—
1,388
—
—
—
—
—
—
—
Balance at 31 March 2012
3,339
1,692
1,388
227
The accompanying notes form an integral part of these financial statements.
193
44
—
237
—
—
54
(64)
—
(10)
—
(49)
—
—
(49)
—
49
—
—
—
49
—
—
Total
£’000
4,778
46
687
(1,504)
—
687
(817)
5,511
—
—
—
64
(56)
8
50
278
54
—
(56)
326
1,156
1,156
347
6,993
19
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
group sTATEMENT Of fINANCIAL POsITION
AT 31 MARCH 2012
assets
non-current
Goodwill
Intangible assets
Property, plant and equipment
current
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
liabilities
current
Trade and other payables
financial liabilities at fair value through profit or loss
borrowings
Corporation tax
non-current
borrowings
deferred tax
Total liabilities
net assets
equity
share capital
share premium account
Merger reserve
share-based payment reserve
Investment in own shares
Profit and loss account
Total equity
The financial statements were approved by the board of directors on 11 June 2012.
M I Welburn
director
Company number: 1999619
The accompanying notes form an integral part of these financial statements.
20
notes
2012
£’000
2011
£’000
11
12
13
15
16
17
19
24
20
20
18
25
591
558
1,628
2,777
2,929
5,823
2,468
11,220
13,997
(4,580)
(7)
(1,514)
(310)
(6,411)
(368)
(225)
(593)
(7,004)
6,993
3,339
1,692
1,388
227
–
347
6,993
591
676
1,040
2,307
3,087
5,016
1,612
9,715
12,022
(4,212)
(82)
(1,578)
(312)
(6,184)
(95)
(232)
(327)
(6,511)
5,511
3,304
1,448
1,388
237
(49)
(817)
5,511
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 group sTATEMENT Of CAsH fLOWs
fOR THE YEAR ENdEd 31 MARCH 2012
cash flows from operating activities
Profit after taxation
Adjustment for:
depreciation
Net finance costs in statement of comprehensive income
Amortisation charge
share-based payment charge
(Gain)/charge relating to foreign exchange derivative contract
Taxation expense recognised in statement of comprehensive income
Increase in trade and other receivables
Increase in trade payables and other payables
decrease in inventories
Cash generated from operations
Interest paid
Income taxes paid
net cash from operating activities
cash flows from investing activities
Purchase of plant and equipment
Proceeds from sale of plant and equipment
Interest received
net cash used in investing activities
cash flows from financing activities
Proceeds from sale of Treasury shares
Issue of ordinary share capital
dividend paid
Movement in short term borrowings
Repayment of bank borrowings
Payment of finance lease liabilities
net cash used in financing activities
net increase in cash and cash equivalents
cash and cash equivalents at beginning of year
cash and cash equivalents at end of year
The accompanying notes form an integral part of these financial statements.
2012
£’000
1,156
301
78
118
54
(5)
370
(807)
381
158
1,804
(130)
(378)
1,296
2011
£’000
687
326
99
117
44
11
240
(1,169)
799
20
1,174
(137)
(69)
968
(465)
(187)
10
4
—
5
(451)
(182)
278
50
(56)
195
(400)
(56)
11
856
1,612
2,468
—
2
—
(119)
(300)
(53)
(470)
316
1,296
1,612
21
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs
fOR THE YEAR ENdEd 31 MARCH 2012
1 general information
Tricorn Group plc and subsidiaries’ (the ‘Group’) principal activities comprise high precision tube manipulation, systems engineering
and specialist fittings.
The Group’s customer base includes major blue chip companies with world wide activities in key market sectors, including
Pipefittings, Power Generation, Aerospace, Off Highway, and Automotive.
Tricorn Group plc is the Group’s ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of
the registered office, which is also its principal place of business, is spring Lane, Malvern, Worcestershire, WR14 1dA. It’s shares are
listed on the Alternative Investment Market of the London stock Exchange.
These consolidated financial statements have been approved for issue by the board of directors on 11 June 2012. Amendments to
the financial statements are not permitted after they have been approved.
2 aCCounting poliCieS
Basis of preparation
These consolidated financial statements have been prepared under the required measurement bases specified under International
financial Reporting standards (IfRs) and in accordance with applicable IfRs as adopted by the European Union and IfRs as issued by
the International Accounting standards board.
Going concern
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. detailed cash flow forecasts have been prepared which highlight that the Group
has sufficient cash headroom to support its activities. The key assumptions in these forecasts have been sensitised and no issues arise
which lead to any concern regarding the operations or financing of the Group. for this reason, the directors continue to adopt the
going concern basis in preparing the financial statements.
overall considerations
The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarised
below.
The consolidated financial statements have been prepared using the measurement bases specified by IfRs for each type of asset,
liability, income and expense. The measurement bases are more fully described in the accounting policies below.
The accounting estimates and assumptions are consistent with the Group’s latest approved budget forecast where applicable.
Judgements are based on the information available at each reporting date. All estimates are based on the best information available
to management.
22
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 2 aCCounting poliCieS continued
standards and interpretations not yet applied by the Group
The following new standards and Interpretations, which are yet to become mandatory, have not been applied in the Group’s financial
statements.
standard or Interpretation
IfRs 9
IAs 24
IfRs 12
IfRs 13
IAs 27 (revised)
financial Instruments
Consolidated financial statements
disclosure of Interests in Other Entities
fair Value Measurements
separate financial statements
effective for reporting
periods starting on or after
1 January 2015
1 January 2013
1 January 2013
1 January 2013
1 January 2013
significant accounting estimates and judgements
Certain estimates and judgements need to be made by the directors of the Group which affect the results and position of the
Group as reported in the financial statements. Estimates and judgements are required at the reporting date regarding certain
assets/liabilities that are recorded at fair value which require a number of estimates and assumptions to be made.
The major areas for estimation within the financial statements are as follows:
●
●
●
performance of impairment reviews to assess the carrying value of goodwill (see note 11);
valuation of interest rate collar (see note 24) (terminated in March 2012);
estimates of inventory recoverability. Management review ageing of inventory, movement levels throughout the year and
forecast future usage levels to set an adequate inventory provision to cover obsolete inventory lines.
There are no major areas for judgements within the financial statements which are not covered by the accounting policies
detailed below.
consolidation and investments in subsidiaries
subsidiaries are all entities over which the Group has the power to control the financial and operating policies. The Group obtains
and exercises control through voting rights. The consolidated financial statements of the Group incorporate the financial statements
of the parent company as well as those entities controlled by the Group by full consolidation.
Acquired subsidiaries are subject to application of the purchase method. This involves the revaluation at fair value of all identifiable
assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were
recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the
subsidiary are included in the Group statement of financial position at their revalued amounts, which are also used as the basis for
subsequent measurement in accordance with the Group accounting policies. Goodwill represents the excess of acquisition cost over
the fair value of the Group’s share of the identifiable net assets of the acquired subsidiary at the date of acquisition.
Intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements.
23
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
noteS TO THE fINANCIAL sTATEMENTs continued
2 aCCounting poliCieS continued
Business combinations completed prior to date of transition to IFrs
The Group has elected not to apply IfRs 3 business Combinations retrospectively to business combinations prior to the date of
transition to IfRs, 1 April 2006.
Accordingly the classification of the combination (acquisition, reverse acquisition or merger) remains unchanged from that used
under UK GAAP. Assets and liabilities are recognised at date of transition if they would be recognised under IfRs, and are measured
using their UK GAAP carrying amount immediately post-acquisition as deemed cost under IfRs, unless IfRs requires fair value
measurement. deferred tax is adjusted for the impact of any consequential adjustments after taking advantage of the transitional
provisions.
revenue recognition
Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods supplied and
services provided, excluding VAT and trade discounts. Revenue is recognised upon the performance of services or transfer of risk to
the customer.
The Group recognises revenue when persuasive evidence of an arrangement exists; delivery has occurred or services have been
rendered; the sale price fixed and determinable; and collectability is reasonably assured. Amounts received are recognised
immediately as revenue where there are no substantial risks, there are no ongoing performance obligations and amounts received
are not refundable. Amounts are deferred over an appropriate period where these conditions are not met.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of ordinarily interchangeable items are assigned using the
first in, first out cost formula. Cost of work in progress and finished goods includes materials, direct labour and an attributable
proportion of manufacturing overheads based on normal levels of activity. Provisions are made against inventories where there is
evidence that the carrying amount has fallen below recoverable amount.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill which is recognised as an asset is reviewed for
impairment at least annually. Any impairment is recognised immediately through profit or loss and is not subsequently reversed.
Impairment
The Group’s goodwill, intangible assets and property, plant and equipment are subject to impairment testing.
for the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the
related business combination and represent the lowest level within the Group at which management controls the related cash flows.
Goodwill with an indefinite useful life is tested for impairment at least annually. All other individual assets or cash-generating units are
tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value in use,
based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has
been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the
other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist.
If the impairment is subsequently reversed, the carrying amount, except in the case of goodwill, is increased to the revised estimate
of its recoverable amount, limited to the carrying value that would have been determined had no impairment been recognised
previously. Impairment losses in respect of goodwill are not subsequently reversed.
24
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 2 aCCounting poliCieS continued
Intangible assets acquired as part of a business combination
In accordance with IfRs 3 business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to
the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the
probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset might be
separable, but only together with a related tangible or intangible asset, the Group of assets is recognised as a single asset separately
from goodwill where the individual fair values of the assets in the Group are not reliably measurable. Where the individual fair value
of the complementary assets are reliably measurable, the Group recognises them as a single asset provided the individual assets have
similar useful lives.
Intangible amortisation
Intangible assets are amortised over the following periods:
brand names
Customer contracts
15 years
5 years
Foreign currencies
These financial statements are presented in UK sterling which is the functional currency of the parent and the presentational
currency of the Group.
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated at the rates of exchange ruling at the reporting date. Exchange differences are dealt with
through profit or loss.
property, plant and equipment
Property, plant and equipment are carried at acquisition cost less subsequent depreciation and impairment losses. depreciation is
charged on these assets, after adjusting for their residual values, on a straight-line basis over the estimated useful economic life
of each asset.
The useful lives of property, plant and equipment can be summarised as follows:
Plant and equipment
Motor vehicles
3 to 10 years
5 years
leases
The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards
related to the ownership of the leased asset and is then disclosed and accounted for as a finance lease asset. The related asset is
recognised at the time of inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease
payments plus incidental payments, if any, to be borne by the lessee. A corresponding amount is recognised as a finance leasing
liability, irrespective of whether some of these lease payments are payable upfront at the date of inception of the lease.
subsequent accounting for assets held under hire purchase and finance lease agreements, i.e. depreciation methods and useful lives,
correspond to those applied to comparable acquired assets. The corresponding hire purchase and finance leasing liability is reduced
by lease payments less finance charges, which are expensed to finance costs. finance charges represent a constant periodic rate of
interest on the outstanding balance of the hire purchase and finance lease liability.
All other leases are treated as operating leases. Payments on operating lease agreements are recognised as an expense on a
straight-line basis. Associated costs, such as maintenance and insurance, are expensed as incurred.
The Group does not act as a lessor.
25
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
noteS TO THE fINANCIAL sTATEMENTs continued
2 aCCounting poliCieS continued
Taxation
Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or
prior reporting period, that are unpaid at the reporting date. They are calculated according to the tax rates and tax laws applicable to
the fiscal periods to which they relate, based on the taxable profit for the year.
deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. However, in
accordance with the rules set out in IAs 12, no deferred taxes are recognised in conjunction with the initial recognition of goodwill
on acquisitions. This applies also to temporary differences associated with shares in subsidiaries if reversal of these temporary
differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax
losses available to be carried forward as well as other income tax credits available to the Group are assessed for recognition as
deferred tax assets.
deferred tax liabilities are always provided for in full. deferred tax assets are recognised to the extent that it is probable that they
will be able to be offset against future taxable income. deferred tax assets and liabilities are calculated, without discounting, at tax
rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the
reporting date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the statement of comprehensive
income. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly
to equity are charged or credited directly to other comprehensive income.
employee benefits
Defined contribution pension scheme
Pensions to employees are provided through contributions to individual personal pension plans. A defined contribution plan is a
pension plan under which the Group pays fixed contributions to an independent entity. The Group has no legal or constructive
obligations to pay further contributions after payment of the fixed contribution.
The contributions recognised in respect of personal pension plans are expensed as they fall due. Liabilities and assets may be
recognised if underpayment or prepayment has occurred and are included in current liabilities or current assets as they are normally
of a short term nature.
other employee benefits
short term employee benefits, including holiday entitlement, are included in other employee obligations at the undiscounted amount
that the Group expects to pay as a result of the unused entitlement.
Financial assets
The Group’s financial assets include cash, cash equivalents and trade and other receivables.
All financial assets are recognised when the entity becomes party to the contractual provisions of an instrument. All financial assets
are initially recognised at fair value, plus transaction costs, and are subsequently measured at amortised cost using the effective
interest rate.
Interest and other cash flows resulting from holding financial assets are recognised in profit or loss when received, regardless of how
the related carrying amount of financial assets is measured.
Trade receivables are provided against when objective evidence is received that the Group will not be able to collect all amounts due
to it in accordance with the original terms of the receivables. The amount of the write-down is determined as the difference between
the asset’s carrying amount and the present value of estimated future cash flows.
26
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 2 aCCounting poliCieS continued
cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and overdrafts as well as short term highly liquid investments such as
bank deposits.
equity
share capital is determined using the nominal value of shares that have been issued. Equity instruments issued by the Company are
recorded at the proceeds received, net of direct issue costs. When the Company purchases its own shares, the consideration is
deductible from equity attributable to the Company’s equity holders until the shares are either cancelled or reissued. When this
happens, any consideration received is included in equity attributable to equity holders. Treasury shares are held at cost.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated
with the issuing of shares are deducted from share premium, net of any related income tax benefits.
The merger reserve represents the difference between the issue price and the nominal value of shares issued as consideration for
the acquisition of a subsidiary undertaking when the Company has taken advantage of merger relief.
All current and prior period results are taken to the profit and loss account as disclosed in the statement of comprehensive income.
share-based employee remuneration
All share-based payment arrangements are recognised in the consolidated financial statements. The Group operates equity-settled
share-based remuneration plans for the remuneration of its employees.
All employee services received in exchange for the grant of any share-based remuneration are measured at their fair values. These
are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and
excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
All share-based remuneration is ultimately recognised as an expense in the profit or loss with a corresponding credit to the share-
based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are
subsequently revised, if there is any indication that the number of share options expected to vest differs from previous estimates. No
adjustment is made to the expense recognised in prior periods if fewer share options ultimately are exercised than originally
estimated.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of
the shares issued are allocated to share capital with any excess being recorded as share premium.
Financial liabilities
The Group’s financial liabilities include trade and other payables, bank borrowings, invoice discounting facilities and finance lease and
hire purchase agreements.
financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest
related charges are recognised as an expense in “finance cost” in the statement of comprehensive income. financial liabilities are
initially recognised at fair value and subsequently measured at amortised costs using the effective interest rate.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled
or expires.
27
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
noteS TO THE fINANCIAL sTATEMENTs continued
2 aCCounting poliCieS continued
provisions for liabilities
Provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Group and they
can be reliably estimated. A present obligation arises from the presence of a legal or constructive commitment that has resulted from
past events.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence
available at reporting date and all future estimated cash flows are discounted to arrive at the present value of the provision.
Borrowings
borrowings are recognised initially at fair value, net of transaction costs incurred. They are subsequently stated at amortised cost; any
difference between proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive
income over the period of the borrowings using the effective rate of interest method. borrowings are classified as current liabilities
unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Derivative contracts
All derivatives are recognised at fair value through profit or loss. The value of the derivative is reassessed at fair value at each
reporting date.
research costs
Expenditure on research (or the research phase of an internal project) is recognised as an expense in the period in which it is
incurred.
28
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 3
Segmental reporting
The Group operates three main operating segments:
●
●
●
Energy and Utilities: manipulated tubular assemblies for use in power generation, oil and gas and marine sectors, and innovative
jointing systems for use typically within the utility industry.
Transportation: ferrous, non-ferrous and nylon material tubular assemblies for use in off-highway, medical, and other
such applications.
Aerospace: specialised rigid pipe assemblies for use in the aerospace sector.
The Group previously presented four business segments with Energy and Utilities disclosed as separate segments. These two business
streams have now been aggregated as they are both operationally managed and reported internally to the Chief Executive on a
single basis. As such, the prior period comparative figures have been restated to aggregate Energy and Utilities into one reportable
segment.
The financial information detailed below is frequently reviewed by the Chief Operating decision Maker.
year ended 31 March 2012
revenue
— from external customers
— from other segments
segment revenues
operating profit/(loss) pre intangible
asset amortisation, foreign exchange
contracts and share-based payment
charges
Intangible asset amortisation
share-based payment charge
fair value gain relating to forward exchange
contracts
operating profit/(loss)
Net finance costs
profit/(loss) before tax
segmental assets
other segment information:
Capital expenditure
depreciation
energy
& utilities
£’000
10,691
—
10,691
Transportation
£’000
aerospace
£’000
unallocated
£’000
8,681
—
8,681
5,334
—
5,334
—
—
—
Total
£’000
24,706
—
24,706
987
767
—
—
—
987
(64)
923
4,637
462
141
—
—
—
767
(4)
763
3,309
146
105
51
—
—
—
51
(26)
25
3,177
297
54
(34)
1,771
(118)
(54)
5
(201)
16
(185)
2,874
2
1
(118)
(54)
5
1,604
(78)
1,526
13,997
907
301
29
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
3
Segmental reporting continued
Year ended 31 March 2011
Revenue
— from external customers
— from other segments
segment revenues
Operating profit/(loss) pre intangible asset
amortisation, foreign exchange contracts and
share-based payment charges
Intangible asset amortisation
share-based payment charge
fair value gain relating to forward exchange
contracts
Operating profit/(loss)
Net finance costs
Profit/(loss) before tax
segmental assets
Other segment information:
Capital expenditure
depreciation
Energy
& Utilities
£’000
Transportation
£’000
Aerospace
£’000
Unallocated
£’000
9,674
—
9,674
868
—
—
—
868
(60)
808
4,469
177
142
7,155
—
7,155
4,935
—
4,935
604
(283)
—
—
—
604
(6)
598
2,532
50
126
—
—
—
(283)
(24)
(307)
2,628
13
57
—
—
—
9
(117)
(44)
(11)
(163)
(9)
(172)
2,393
—
1
Total
£’000
21,764
—
21,764
1,198
(117)
(44)
(11)
1,026
(99)
927
12,022
240
326
The Group’s revenue from external customers (by destination) and its geographic allocation of total assets may be summarised as
follows:
United Kingdom
Europe
Rest of World
No single customer accounts for more than 10% of revenue.
year ended
31 March 2012
Year ended
31 March 2011
revenue
£’000
18,076
4,122
2,508
24,706
assets
£’000
13,997
—
—
13,997
Revenue
£’000
15,733
3,732
2,299
21,764
Assets
£’000
12,022
—
—
12,022
30
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 4 profit before taxation
The profit on ordinary activities before taxation is stated after charging:
auditors’ remuneration:
Audit of parent and Group consolidation
Audit of Group subsidiaries
Non-audit services:
Corporate taxation
operating lease charges:
Land and buildings
Plant and equipment
Motor vehicles
Depreciation and amortisation:
Intangible assets
Loss on disposal of tangible fixed assets
Property, plant and equipment – owned
Property, plant and equipment – leased
5 direCtorS’ emolumentS
2012
£’000
2011
£’000
13
29
13
426
39
87
118
8
269
32
13
28
13
419
36
73
117
—
254
72
2012
2011
2012
2011
Basic
£’000
Bonus
£’000
Benefits
in kind
£’000
Total
£’000
basic
£’000
bonus
£’000
benefits
in kind
£’000
Total
£’000
pension
£’000
Pension
£’000
n c paul cBe
r allsop
M I Welburn*
p lee*
D e leakey*
n silverthorne
30
15
120
90
73
9
—
—
60
45
30
—
337
135
—
—
22
14
11
1
48
30
15
202
149
114
10
520
25
10
120
90
—
57
302
—
—
36
27
—
—
63
—
18
14
—
5
37
25
10
174
131
—
62
402
—
—
8
6
—
—
14
—
—
8
6
—
4
18
* The Executive directors are classified as the key management personnel of the Group as defined in IAs 24 Related Party disclosures.
N sliverthorne resigned as a director of the Company on 31 May 2011 and as such only his emoluments up to this date are disclosed
as director's emoluments.
d E Leakey was appointed as a director of the Company on 3 June 2011 and as such his emoluments as a director are disclosed from
that date.
Employer's National Insurance Contributions made relating to directors' emoluments were £51k (2011: £32k).
31
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
5 direCtorS’ emolumentS continued
share-based payment charge by director (note 6)
M I Welburn*
p lee*
n c paul cBe
2012
£’000
18
15
19
52
2011
£’000
21
5
18
44
* The Executive directors are classified as the key management personnel of the Group as defined in IAs 24 Related Party
disclosures.
6 employee CoStS
The average number of persons (including directors) employed
by the Group during the year was:
Production
sales, distribution and administration
staff costs during the year were as follows:
Wages and salaries
social security costs
Other pension costs
share based payment charge
2012
number
2011
Number
279
48
327
2012
£’000
6,884
626
163
54
7,727
247
44
291
2011
£’000
6,377
518
158
44
7,097
32
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 7
SHare-baSed employee remuneration
There are two share based remuneration schemes in operation:
●
●
Approved Enterprise Management Incentive (EMI) scheme
Unapproved share options.
delete p?
At
31 March
2011
No. of
shares
Granted
in year
No. of
shares
Exercised
in year
No. of
shares
Lapsed
in year
No. of
shares
at
31 March
2012
no. of
shares
Life remaining
on options
at 31 March
2012
Months
Exercise
price
Pence
enterprise Management Incentive (eMI) scheme
Exercise date:
April 2002 – April 2012
december 2004 – July 2012
March 2009 – March 2019
december 2009 – december
2019
August 2010 – August 2020
160,000
200,000
500,000
100,000
2,184,156
3,144,156
— (150,000)
— (200,000)
—
—
—
—
—
—
— (350,000)
—
—
—
—
10,000
—
500,000
100,000
— 2,184,156
— 2,794,156
10
—
10
10
10
The weighted average exercise price of the EMI scheme at 31 March 2012 was 10p (2011: 10.51p). 2,609,956 options were
available for exercise at 31 March 2012 (2011: 2,223,156).
unapproved share options
Exercise date:
september 2010 – september 2015
1,000,000
september 2010 – september 2020
661,844
—
—
June 2011 – June 2021
december 2011 – december 2021
— 500,000
— 200,000
1,661,844
700,000
—
—
—
—
—
Total share options
4,806,000 700,000 (350,000)
— 1,000,000
—
—
—
661,844
500,000
200,000
— 2,361,844
— 5,156,000
10
10
30
25
1
—
84
93
101
42
102
111
114
The weighted average exercise price of the unapproved share options at 31 March 2012 was 15.5p (2011: 10.0p).
2,161,844 options were available for exercise at 31 March 2012 (2011: 661,844).
The approved and unapproved option schemes have been valued in the year by management using the black–scholes valuation
model. Key inputs into the model are expected share price volatility of 60%, expected life of option of between 3 and 5 years and
the expected risk free interest rates of 2.33%.
1,000,000 of the unapproved options and 921,000 of the approved EMI options issued have performance criteria. These options
vest in five equal tranches once the share price has achieved the trigger points of 20p, 25p, 30p, 35p and 40p for ten consecutive
trading days.
33
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
noteS TO THE fINANCIAL sTATEMENTs continued
8 finanCe inCome and expenSe
bank interest receivable
Finance income
Invoice discounting interest
fair value charge for interest rate collar (note 24)
Charge for closure of interest rate collar
Effective interest charge on borrowings
Interest on hire purchase agreements and finance leases
Finance expense
9 taxation on profit on ordinary aCtivitieS
The tax is based on the profit for the year and represents:
UK corporation tax
Adjustments in respect of prior years
Current tax charge for the year
deferred taxation (note 18)
Tax on profit on ordinary activities
2012
£’000
4
4
53
(71)
25
68
7
82
2012
£’000
402
(25)
377
(7)
370
2011
£’000
5
5
47
(33)
82
8
104
2011
£’000
293
—
293
(53)
240
The tax assessed is different to the standard rate of corporation tax in the UK of 26% (2011: 28%). The difference is explained
as follows:
Profit on ordinary activities before tax
Profit on ordinary activities multiplied by standard rate
of corporation tax in the UK of 26% (2011: 28%)
Effect of:
Expenses not deductible for tax purposes
Capital allowances in excess of depreciation
Adjustments in respect of prior years
2012
£’000
1,526
396
(11)
17
(25)
377
2011
£’000
927
260
20
13
—
293
At 31 March 2012 the Group had tax losses of £210,000 (2011: £207,000) to offset against future profits within the United Kingdom.
34
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 10 earningS per SHare
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and
the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary
shares.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
Basic earnings per share
dilutive shares
Diluted earnings per share
basic earnings per share
dilutive shares
diluted earnings per share
31 March 2012
Weighted average
number of shares
number
’000
33,164
951
34,115
profit
£’000
1,156
1,156
31 March 2011
Weighted average
number of shares
Number
’000
32,146
297
32,443
Profit
£’000
687
687
earnings
per share
pence
3.49
3.39
Earnings
per share
Pence
2.14
2.12
The directors consider that the following adjusted earnings per share calculation is a more appropriate reflection of the Group
performance.
35
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
10 earningS per SHare continued
Basic earnings per share
Amortisation of intangible asset
Interest rate collar gain
share-based payment charge
Charge relating to foreign exchange contract
adjusted earnings per share
dilutive shares
Diluted adjusted earnings per share
basic earnings per share
Amortisation of intangible asset
Interest rate collar gain
share-based payment charge
Charge relating to foreign exchange contract
Adjusted earnings per share
dilutive shares
diluted adjusted earnings per share
31 March 2012
Weighted average
number of shares
number
’000
earnings
per share
pence
33,164
3.49
33,164
951
34,115
3.78
3.67
31 March 2011
Weighted average
number of shares
Number
’000
Earnings
per share
Pence
32,146
2.14
32,146
297
32,443
2.57
2.54
profit
£’000
1,156
118
(71)
54
(5)
1,252
1,252
Profit
£’000
687
117
(33)
44
11
826
826
36
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 11 goodwill
cost
At 31 March 2010, 31 March 2011 and 31 March 2012
Impairment
At 31 March 2010, 31 March 2011 and 31 March 2012
net book value
At 31 March 2010
At 31 March 2011
at 31 March 2012
Goodwill above relates to the following cash-generating units:
Redman fittings Limited
RMdG Aerospace Limited
Maxpower Automotive Limited
Total
£’000
591
—
591
591
591
Original
cost
£’000
60
140
391
591
date of
acquisition
June 1999
June 2006
June 2007
Goodwill arising on consolidation represents the excess of the fair value of the consideration given over the fair value of the
identifiable net assets acquired.
The Group tests annually for impairment, or more frequently if there are indicators that goodwill might be impaired.
The recoverable amounts of the cash-generating units (CGUs) are determined from value in use calculations, covering a detailed five
year forecast and applying a discount rate of 2.6% which equates to the Group’s weighted average cost of capital.
Management’s key assumptions are based on their past experience and future expectations of the market over the longer term.
The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes to
selling prices and direct costs.
Apart from the considerations described in determining the value in use of the cash-generating unit above, the Group’s management
do not believe that reasonably possible changes in the assumptions underlying the value in use calculation would have an impact on
the carrying value of goodwill.
After applying sensitivity analysis in respect of the results and future cash flows, in particular for presumed growth rates and discount
rates, management believe that no impairment is required. Management is not aware of any other changes that would necessitate
changes to their key estimates.
37
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
12 intangible aSSetS
cost
At 1 April 2010
At 1 April 2011 and 31 March 2012
amortisation
At 1 April 2010
Charge for the year
At 1 April 2011
Charge for the year
At 31 March 2012
net book value
At 31 March 2010
At 31 March 2011
at 31 March 2012
brand
names
£’000
830
830
(178)
(55)
(233)
(56)
(289)
652
597
541
Customer
contracts
£’000
312
312
(171)
(62)
(233)
(62)
(295)
141
79
17
Total
£’000
1,142
1,142
(349)
(117)
(466)
(118)
(584)
793
676
558
All intangible asset amortisation is included in the Group statement of comprehensive income under amortisation of intangibles as
detailed on the face of the Group statement of comprehensive income.
38
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 13 property, plant and eQuipment
cost
At 1 April 2010
Additions
At 1 April 2011
Additions
At 31 March 2012
Depreciation
At 1 April 2010
Charge for the year
At 1 April 2011
Charge for the year
disposals
At 31 March 2012
net book value
At 31 March 2010
At 31 March 2011
at 31 March 2012
Plant and
equipment
£'000
Motor
vehicles
£'000
4,622
240
4,862
907
5,769
3,496
326
3,822
301
18
4,141
1,126
1,040
1,628
43
—
43
—
43
43
—
43
—
—
43
—
—
—
Total
£’000
4,665
240
4,905
907
5,812
3,539
326
3,865
301
18
4,184
1,126
1,040
1,628
The net book value of property, plant and equipment includes £413,000 (2011: £342,000) in respect of assets held under finance
leases and hire purchase contracts.
39
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
14 prinCipal SubSidiarieS
At 31 March 2012 the principal subsidiaries of the Group were as follows:
Name of subsidiary
undertaking
Country of
incorporation
description of
shares held
% of
nominal
value of
shares held
Malvern Tubular Components Limited United Kingdom
Ordinary
100
Redman fittings Limited
United Kingdom
Ordinary
100
RMdG Aerospace Limited
United Kingdom
Ordinary
100
Maxpower Automotive Limited
United Kingdom
Ordinary
100
Principal business
activity
Manufacturer of tubular
components
sales and marketing company
for specialist pipe fittings
Manufacturer of aerospace
fittings
Manufacturer of highway and
automotive tubular and pipe
components
Robert Morton dG Limited*
United Kingdom
Ordinary
100
dormant
* Held by a subsidiary undertaking.
Issquared Limited, searchwell Limited, Integrated statistical solutions Limited and MTC Holdings Limited which were all dormant
companies as at 31 March 2011, were dissolved during the current year.
15 inventorieS
Raw materials
Work in progress
finished goods
2012
£’000
1,565
898
466
2,929
2011
£’000
1,560
989
538
3,087
In the year to 31 March 2012, a total of £10,713,000 of inventory (2011: £9,779,000) was included in the statement of
comprehensive income as an expense.
40
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 16 trade and otHer reCeivableS
Trade receivables
Impairment of trade receivables
Other receivables
Prepayments and accrued income
Total
2012
£’000
5,420
(9)
5,411
78
334
5,823
2011
£’000
4,560
(11)
4,549
259
208
5,016
At 31 March 2012, some of the unimpaired trade receivables are past their due date but all are considered recoverable. The age of
financial assets past due date but not impaired is as follows:
Not more than one month
Not more than two months
Not more than three months
2012
£’000
2,267
787
109
3,163
2011
£’000
1,500
502
246
2,248
Trade and other receivables are usually due within 30–75 days and do not bear any effective interest rate. All trade receivables are
subject to credit risk exposure. However, the Group does not identify specific concentrations of credit risk with regard to trade and
other receivables as the amounts recognised represent a large number of receivables from various customers.
The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation
of fair value.
17 CaSH and CaSH eQuivalentS
Cash and cash equivalents
2012
£’000
2,468
2011
£’000
1,612
Cash and cash equivalents consist of cash on hand and balances with banks only. At the year end £770,000 (2011: £522,000) of cash
on hand and balances with banks were held by the subsidiary undertakings; however, this balance is available for use by the Group.
41
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
18 deferred taxation
Intangible assets
Plant and equipment
Trade and other payables
The movement in the deferred taxation account during the year was:
balance brought forward
Group statement of comprehensive income
movement arising during the year
balance carried forward
assets
liabilities
2011
£’000
—
—
—
—
2012
£’000
(134)
(91)
—
(225)
assets
liabilities
2011
£’000
4
(4)
—
2012
£’000
(232)
7
(225)
2011
£’000
(175)
(56)
—
(232)
2011
£’000
(289)
57
(232)
2012
£’000
—
—
—
—
2012
£’000
—
—
—
As at 31 March 2012 the Group has unprovided deferred tax assets as follows:
Trading losses
This deferred tax asset is not recognised due to uncertainty over its recoverability.
unprovided
2012
£’000
Unprovided
2011
£’000
(50)
(54)
42
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 19 trade and otHer payableS
Trade and other payables
Other taxation and social security
Accruals
2012
£’000
2,696
497
1,387
4,580
2011
£’000
2,533
776
903
4,212
due to the short term duration of trade and other payables the carrying value in the statement of financial position represents the
fair value of the liabilities.
20 borrowingS
current borrowings
bank borrowings
Invoice discounting facility
Hire purchase agreements and finance lease liabilities (note 21)
non-current borrowings
bank borrowings
Hire purchase agreements and finance lease liabilities (note 21)
2012
£’000
—
1,464
50
1,514
—
368
368
The future contractual payments, including interest, for bank borrowings and the invoice discounting facility are as follows:
In one year or less or on demand:
bank loan
Invoice discounting facility
In more than one year but not more than two years:
bank loan
2012
£’000
—
1,464
—
1,464
2011
£’000
292
1,269
17
1,578
94
1
95
2011
£’000
365
1,269
116
1,750
Bank loan
The Group obtained a £1,400,000 bank loan in 2007, repayable over five years. On 30 september 2011 the Group gave notice
to its bankers to repay this facility early. The facility was fully repaid on 14 October 2011.
Invoice discounting facility
The invoice discounting facility is secured against the trade receivables to which it relates. Interest is paid at 2.15% over bank base
rate per annum.
43
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
21 Hire purCHaSe agreementS and finanCe leaSe liabilitieS
The commitments under hire purchase agreements and finance lease liabilities are as follows:
31 March 2012
Payments
discounting
31 March 2011
Payments
discounting
Within
1 year
Within
1–2 years
Within
2–5 years
Total
71
(21)
50
18
(1)
17
123
(16)
107
1
—
1
278
(17)
261
—
—
—
472
(54)
418
19
(1)
18
The hire purchase agreements and finance lease liabilities are secured against the assets to which they relate.
44
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 22 finanCial inStrumentS
financial instruments used by the Group comprise cash and short term deposits, invoice discounting and hire purchase agreements
and finance leases. The Group has items such as trade receivables and trade payables that arise directly from its operations.
Trade and other receivables and trade and other payables
The Group manages its trade receivables to ensure that credit risk is minimised by avoiding concentration with any one customer. All
trade receivables have set credit terms which are monitored.
The invoice discounting facility provides immediate funds on approved trade receivables.
The Group works to ensure that it receives acceptable trading terms from its suppliers.
liquidity risk
The objective of the Group is to maintain a balance between continuity of funding and flexibility through the use of deposits, bank
loans, invoice discounting and finance lease and hire purchase contracts. Money on deposit is held on treasury reserve, partly to
finance working capital and also to help finance future acquisitions.
Interest rate risk
The policy of the Group is to manage its interest cost using a mix of fixed and variable rate debt. The Group's exposure to interest
rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities. The Group finances specific large plant
acquisitions via hire purchase or finance lease contracts. The Group pays interest on:
●
●
invoice discounting at 2.15% over base rate
finance leases at 2.0% to 2.5% over base rate
If the Group's interest rates were to rise/fall by 10% then the interest charge within the financial statements would increase/
decrease by £nil (2011: £nil), equity and reserves would reduce/increase by the same amount, and the charge would be £82,000
(2011: £104,000).
Foreign currency risk
The Group transacts certain purchases and sales in foreign currencies. At 31 March 2012 there were three (2011: four) foreign
currency forward contracts in force.
foreign exchange differences on retranslation of foreign currency assets and liabilities are taken to the statement of comprehensive
income of the Group.
If the Us dollar and Euro were to fall/rise by 10% on the closing rate and average annual rate at 31 March 2012 then Group profits
would rise/fall by £176,000 at 31 March 2012 (2011: £177,000) and equity and reserves would increase/reduce by the same amount.
commodity price risk
The Group’s exposure to the price of steel is high, therefore selling prices are monitored regularly to reduce the impact of such risk
and opportunities to reduce material costs are explored constantly. The Group has partly responded to this risk by sourcing materials
in low cost countries. In addition, any increases in the cost of steel would be passed onto customers.
If steel prices were to fall/rise by 10% on the closing year end price, and the Group was unable to pass the increase onto customers,
then Group profits would rise/fall by £357,000 at 31 March 2012 (2011: £296,000) and equity and reserves would increase/reduce
by the same amount.
Financial assets and liabilities
The IAs 39 categories of financial assets included in the statement of financial position and the headings in which they are included
are as follows:
45
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
22 finanCial inStrumentS continued
Non-financial asset
Loans and other receivables
Total assets
The financial assets are included in the statement of financial position in the following headings:
current assets
Trade and other receivables
Cash and cash equivalents
2012
£’000
334
7,957
8,291
2012
£’000
5,823
2,468
8,291
2011
£’000
208
6,420
6,628
2011
£’000
5,016
1,612
6,628
The IAs 39 categories of financial liabilities included in the statement of financial position and the headings in which they are included
are as follows:
Non-financial liability
financial liabilities at fair value through profit and loss
financial liabilities measured at amortised cost
Total liabilities
The financial liabilities are included in the statement of financial position in the following headings:
current liabilities
Trade and other payables
financial liabilities at fair value through profit and loss
borrowings
non-current liabilities
borrowings
2012
£’000
497
7
5,965
6,469
2012
£’000
4,580
7
1,514
368
6,469
2011
£’000
776
82
5,109
5,967
2011
£’000
4,212
82
1,578
95
5,967
46
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10
22 finanCial inStrumentS continued
Fair value hierarchy
The following table presents financial assets and liabilities measured at fair value in the statement of financial position in accordance
with the fair value hierarchy prescribed by IfRs 7 financial Instruments disclosures. This hierarchy groups financial assets and liabilities
into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value
hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair
value measurement.
The financial liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows:
foreign exchange derivative contracts
level 1
2012
£’000
—
level 2
2012
£’000
7
level 3
2012
£’000
—
Total
2012
£’000
7
23 Capital management poliCieS proCedureS
The Group's capital management objectives are:
●
●
●
to ensure that the Group can continue as a going concern:
to ensure the Group has adequate resources to support the strategy of the Group; and
to provide a return to the Group’s shareholders.
The Group’s capital equals total equity less cash and cash equivalents. The Group’s financing includes total equity plus borrowings. The
borrowings have been taken out to provide working capital for the Group.
24 derivativeS
Interest rate swap
foreign exchange contracts
2012
£’000
—
7
7
2011
£’000
71
11
82
In february 2008, the Group entered into an interest rate collar agreement with its bankers against its bank loan. Under the
agreement, the interest payable by the Group under the loan could not exceed 6.0% or drop below 4.4%. On 30 March 2012 the
Group gave notice to cancel this agreement, for which an early cancellation charge of £25,500 has been included within the accounts.
At the year end the Group had three (2011: four) forward currency exchange contracts in place. These contracts have been valued
at fair value at the year end of £7k (2011: £11k).
47
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS 25 SHare Capital
Allotted and issued
2012
£’000
2011
£’000
33,395,000 (2011: 33,045,000) ordinary shares of 10 pence each
3,339
3,304
All 10 pence ordinary shares carry the same voting rights and rights to discretionary dividends.
On 11 March 2010 the Group purchased 875,000 of its own ordinary shares on the open market into treasury at a price of 5.5
pence per ordinary share. These shares were sold to satisfy institutional demand on 9 June 2011 for 32 pence per share.
26 Contingent liabilitieS
There were no contingent liabilities at 31 March 2012 or 31 March 2011.
27 Capital CommitmentS
At 31 March 2012 the Group had capital commitments of £nil (31 March 2011: £524k).
28 leaSing CommitmentS
The Group’s aggregate minimum operating lease payments for the remaining lives of the leases are as follows:
In one year or less
One to five years
Greater than five years
2012
land and
buildings
£’000
425
1,620
944
2,989
2011
Land and
buildings
£’000
418
1,453
411
2,282
2012
2011
other
£’000
122
195
14
331
Other
£’000
112
108
—
220
29 tranSaCtionS witH related partieS
There are no transactions with related parties other than key management as disclosed in note 5 to the Group financial statements.
48
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 Tricorn Group plc
Company Statutory
Financial Statements
Under UK GAAP
For the year ended 31 March 2012
Company number 1999619
contents
50 Company statement of directors’ Responsibilities
51 Report of the Independent Auditors
52 Company balance sheet
53 Notes to the financial statements
49
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS Company sTATEMENT Of dIRECTORs’ REsPONsIbILITIEs
The directors are responsible for preparing the directors’ report and the Company only financial statements (“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 have elected to
prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
standards and applicable laws). Under company law, the directors must not approve the financial statements unless they are satisfied that
they give and true and fair view of the state of affairs and the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
–
– make judgements and estimates that are reasonable and prudent;
–
state whether applicable UK Accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
–
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. 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 confirm that:
–
–
so far as each director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
the directors have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
50
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 report Of THE INdEPENdENT AUdITORs
TO THE MEMbERs Of TRICORN GROUP PLC
We have audited the parent company financial statements of Tricorn Group plc for the year ended 31 March 2012 which comprise the
parent company balance sheet and notes 1 to 16. The financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
reSpeCtive reSponSibilitieS of direCtorS and auditorS
As explained more fully in the directors’ Responsibilities statement set out on page 50, the directors are responsible for the preparation
of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the the parent company financial statements in accordance with applicable law and International standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices board’s (APb’s) Ethical standards for Auditors.
SCope of tHe audit of tHe finanCial StatementS
A description of the scope of an audit of financial statements is provided on the APb's website at www.frc.org.uk/apb/scope/private.cfm.
opinion on finanCial StatementS
In our opinion the parent company financial statements:
● give a true and fair view of the state of the Company’s affairs as at 31 March 2012;
● have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
● have been prepared in accordance with the requirements of the Companies Act 2006.
opinion on otHer matter preSCribed by tHe CompanieS aCt 2006
In our opinion the information given in the Report of the directors for the financial year for which the financial statements are prepared
is consistent with the parent company financial statements.
matterS on wHiCH we are reQuired to report by exCeption
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our
opinion:
● adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
● the parent company financial statements are not in agreement with the accounting records and returns; or
● certain disclosures of directors’ remuneration specified by law are not made; or
● we have not received all the information and explanations we require for our audit.
otHer matter
We have reported separately on the Group financial statements of Tricorn Group plc for the year ended 31 March 2012.
David Munton
senior statutory Auditor
for and on behalf of Grant Thornton UK LLP
statutory Auditor, Chartered Accountants
birmingham
11 June 2012
51
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS Company bALANCE sHEET
AT 31 MARCH 2012
Fixed assets
Tangible assets
Investments
current assets
debtors: amounts due within one year
Cash at bank and in hand
creditors: amounts falling due within one year
net current assets
Total assets less current liabilities
creditors: amounts falling due after more than one year
net assets
capital and reserves
Called up share capital
share premium account
share-based payment reserve
Merger reserve
Investment in own shares
Profit and loss account
equity shareholders’ funds
The financial statements were approved by the board of directors on 11 June 2012.
M I Welburn
director
Company number: 1999619
notes
7
8
9
10
11
12
12
12
12
12
2012
£’000
3
6,196
6,199
7,292
1,698
8,990
2011
£’000
2
6,196
6,198
4,280
1,090
5,370
(7,980)
(4,449)
1,010
7,209
—
7,209
3,339
1,692
227
1,592
—
359
7,209
921
7,119
(94)
7,025
3,304
1,448
237
1,592
(49)
493
7,025
52
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 noteS TO THE fINANCIAL sTATEMENTs
fOR THE YEAR ENdEd 31 MARCH 2012
1 baSiS of preparation
The separate financial statements of the Company have been prepared under the historical cost convention and in accordance with
UK accounting standards.
The principal activity of the Company is that of a holding company which has remained unchanged from the previous year.
2 aCCounting poliCieS
Investments
Investments held by the Company are included at cost less amounts written off. Where the consideration for the acquisition of a
subsidiary undertaking includes shares in the Company to which the provisions of section 612 of the Companies Act 2006 apply,
cost represents the nominal value of shares issued together with the fair value of any additional consideration given and costs.
Financial instruments
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial
liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those
financial instruments are classed as financial liabilities. financial liabilities are presented as such in the balance sheet. finance costs and
gains or losses relating to financial liabilities are included in the profit and loss account. finance costs are calculated so as to produce a
constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as
an equity instrument. dividends and distributions relating to equity instruments are debited direct to equity.
Deferred taxation
deferred tax is recognised on all timing differences where the transactions or events that give the Company an obligation to pay
more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet date. deferred tax assets are
recognised when it is more likely than not that they will be recovered.
deferred tax is measured using rates of tax that have been enacted or substantially enacted by the balance sheet date.
share-based payments
All share-based payment arrangements are recognised in the parent company’s financial statements. The Company operates
equity-settled share-based remuneration plans for remuneration of employees of the Company and its subsidiaries. Options are
issued by the parent to the employees of the Company and its subsidiaries. The charge for the share based remuneration is
recognised in the parent company profit and loss account.
All employee services received in exchange for the grant of any share-based remuneration are measured at their fair values. These
are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and
excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to the share-based
payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated
over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting
conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are
subsequently revised, if there is any indication that the number of share options expected to vest differs from previous estimates. No
adjustment is made to the expense recognised in prior periods if fewer share options ultimately are exercised than originally
estimated.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of
the shares issued are allocated to share capital with any excess being recorded as share premium.
53
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS
noteS TO THE fINANCIAL sTATEMENTs continued
2 aCCounting poliCieS continued
equity
share capital is determined using the nominal value of shares that have been issued. Equity instruments issued by the Company are
recorded at the proceeds received, net of direct issue costs. When the Company purchases its own shares, the consideration is
deductible from equity attributable to the Company’s equity holders until the shares are either cancelled or reissued. When this
happens, any consideration received is included in equity attributable to equity holders. Treasury shares are held at cost.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated
with the issuing of shares are deducted from share premium, net of any related income tax benefits.
The merger reserve represents the difference between the issue price and the nominal value of shares issued as consideration for
the acquisition of a subsidiary undertaking when the Company has taken advantage of merger relief.
The profit and loss account includes all current and prior period results.
3 profit for tHe finanCial year
The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own profit and loss account
in these financial statements. The Company’s loss for the year was £142,000 (2011: £77,000).
Auditors’ remuneration incurred by the Company during the year for audit services totalled £13,000 (2011: £13,000), and for tax
compliance services totalled £2,000 (2011: £2,000).
4 direCtorS’ and employeeS’ remuneration
Wages and salaries
social security costs
Other pension costs
2012
£’000
745
80
41
866
2011
£’000
709
57
31
797
The average number of persons (including directors) employed by the Company during the year was 10 (2011: 10).
5 direCtorS emolumentS
All details on directors’ remuneration are given in note 5 to the Group financial statements.
6
SHare-baSed employee remuneration
All details on share options are included in note 7 to the Group financial statements.
54
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 7 fixed aSSet inveStmentS
cost
At 1 April 2011 and 31 March 2012
Impairment
At 1 April 2011 and 31 March 2012
net book value
at 31 March 2012
At 31 March 2011
Total
£’000
7,478
(1,282)
6,196
6,196
At 31 March 2012 the Company holds 100% of the ordinary share capital of the following subsidiaries:
Name of subsidiary
undertaking
Country of
incorporation
description of
shares held
% of
nominal
value of
shares held
Malvern Tubular Components Limited United Kingdom
Ordinary
100
Redman fittings Limited
United Kingdom
Ordinary
100
RMdG Aerospace Limited
United Kingdom
Ordinary
100
Maxpower Automotive Limited
United Kingdom
Ordinary
100
Principal business
activity
Manufacturer of tubular
components
sales and marketing company
for specialist pipe fittings
Manufacturer of aerospace
fittings
Manufacturer of highway and
automotive tubular and pipe
components
Robert Morton dG Limited*
United Kingdom
Ordinary
100
dormant
* Held by a subsidiary undertaking.
Issquared Limited, searchwell Limited, Integrated statistical solutions Limited and MTC Holdings Limited which were all dormant
companies as at 31 March 2011, were dissolved during the current year.
55
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
8 debtorS
Amounts owed by subsidiary undertakings
Other debtors
Prepayments and accrued income
9 CreditorS : amountS due witHin one year
bank borrowings
Other creditors
Trade creditors
Amounts due to subsidiary undertakings
Other taxes and social security
Corporation tax
Accruals and deferred income
10 CreditorS: amountS falling due after more tHan one year
bank borrowings
borrowings are repayable as follows:
Within one year
— bank borrowings
After one and within two years
— bank borrowings
2012
£’000
7,268
—
24
2011
£’000
4,246
2
32
7,292
4,280
2012
£’000
—
—
26
2011
£’000
292
3
78
7,645
3,853
19
—
290
7,980
2012
£’000
—
2012
£’000
—
—
—
14
1
208
4,449
2011
£’000
94
2011
£’000
292
94
386
On 30 september 2011 the Company gave notice to its bankers to repay its term loan facility. This facility was repaid in full on
14 October 2011.
56
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 11 SHare Capital
Allotted and issued
2012
£’000
2011
£’000
33,395,000 (2011: 33,045,000) ordinary shares of 10 pence each
3,339
3,304
All 10p ordinary shares carry the same voting rights and rights to discretionary dividends.
On 11 March 2010 the Group purchased 875,000 of its own ordinary shares on the open market into treasury at a price of 5.5
pence per ordinary share. These shares were sold to satisfy institutional demand on 9 June 2011 for 32 pence per share.
12 reServeS
At 1 April 2011
share issues
sale of own shares
share based payment charge
share based payment reserve transfer
Loss for the year
dividends paid
at 31 March 2012
share
premium
£’000
share based
payment
reserve
£’000
1,448
15
229
—
—
—
—
1,692
237
—
—
54
(64)
—
—
227
Merger
reserve
£’000
1,592
—
—
—
—
—
—
1,592
13 reConCiliation of movement in eQuity SHareHolderS’ fundS
Loss for the financial year
sale of own shares
Issue of new shares
dividends paid
share-based payment charge
Net increase/(decrease) to shareholders’ funds
Opening equity shareholders’ funds
Closing equity shareholders’ funds
Investment
in own
shares
£’000
profit and
loss
account
£’000
(49)
—
49
—
—
—
—
—
2012
£’000
(142)
278
50
(56)
54
184
7,025
7,209
493
—
—
—
64
(142)
(56)
359
2011
£’000
(77)
—
2
—
44
(31)
7,056
7,025
57
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS noteS TO THE fINANCIAL sTATEMENTs continued
14 Contingent liabilitieS
The Company has given an unlimited guarantee against the bank borrowings of its subsidiaries. At 31 March 2012 the balances
amounted to nil (2011: nil).
There were no further contingent liabilities at 31 March 2012 or 31 March 2011.
15 Capital CommitmentS
There were no capital commitments at 31 March 2012 or at 31 March 2011.
16 related partieS
The Company has taken advantage of the exemption under fRs 8 from disclosure of related party transactions with other
Group companies, on the grounds that they are wholly owned subsidiaries.
58
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 SHareHolder NOTEs
59
www.tricorn.uk.com21489-04 27/07/2012 PROOF 10OUR GovernanceOUR BUSIneSSOUR fInancIalS Bankers:
bank of scotland plc
125 Colmore Row
birmingham
b3 3sf
solicitors:
Orme & slade Limited
National Westminster bank Chambers
The Homend
Ledbury
Herefordshire
HR8 1Ab
auditors:
Grant Thornton UK LLP
Registered Auditors
Chartered Accountants
Colmore Plaza
20 Colmore Circus
birmingham
b4 6AT
Company INfORMATION
company registration number:
1999619
registered office:
spring Lane
Malvern Link
Malvern
Worcestershire
WR14 1dA
Directors:
Nicholas Campbell Paul CbE (Chairman and Non-Executive director)
Michael Ian Welburn (Chief Executive Officer)
Phillip Lee (Group finance director)
david Edward Leakey (Group sales director)
Roger Allsop (Non-Executive director)
secretary:
Michael Greensmith
nominated adviser and nominated broker:
Westhouse securities Limited
One Angel Court
London
EC2R 7HJ
registrars:
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
b63 3dA
60
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10 www.tricorn.uk.com
Our Businesses
MTC is a specialist manufacturer of manipulated tubular assemblies supplying
blue chip companies involved in power generation. This includes diesel engine,
generator set and radiator manufacture.
www.mtc.uk.com
Acquired in June 2007 the business manufactures a wide range of tubular
assemblies in ferrous, non-ferrous and nylon materials primarily for off
highway and niche automotive applications.
www.maxaut.co.uk
Acquired in June 2006 the company supplies specialised rigid pipe
assemblies to meet the demanding needs of the aerospace sector. Its
products are found in a wide range of aircraft and are recognised for their
excellence worldwide.
www.rmdg.co.uk
The business develops and supplies major OEM’s with bespoke jointing
systems for multi layer polyethylene pipe systems. The innovative jointing
system is patented worldwide and continues to attract considerable
interest.
www.redmanfittings.com
Tricorn Group plc
spring Lane
Malvern Link
Malvern
Worcestershire
WR14 1dA
Tel: 01684 569956
Fax: 01684 892337
www.tricorn.uk.com
Tricorn Group plc AnnuAl RepoRt And Accounts 201221489-04 27/07/2012 pRooF 10