quickening the pace

quickening the pace
ANNUAL REPORT AND ACCOUNTS 2015 Tarsus Group plc
YEAR ENDED 31 DECEMBER 2015
Tarsus is an international business-to-business media group with interests in
exhibitions, conferences, education, publishing and online media.
Connecting buyers with sellers, Tarsus is focused on developing a business that
facilitates relationships between them; helping them to do business in their respective
markets efficiently and profitably. Exhibitions offer a unique and unparalleled
proposition in their ability to provide face-to-face interaction, and are particularly
resilient in emerging markets where personal relationships are so highly valued.
A full pdf of the Annual Report and further information about the Group
and its businesses can be found online at our corporate website:
WWW.TARSUS.COM
CONTENTS
STRATEGIC REPORT
2
Who we are
4Strategy
7 Highlights
8
Chairman and Managing Director’s statement
12 Financial Review
STRATEGIC REPORT – GEOGRAPHICAL AREAS
14 Emerging Markets
26 US
30 Europe
GOVERNANCE
34 Corporate Social Responsibility
36 Board of Directors
37 Director’s Report
42 Corporate Governance Report
46 Nomination Committee Report
47 Audit Committee Report
53 Remuneration Committee Report
70 Director’s Responsibility Statement
FINANCIAL STATEMENTS
71 Independent Auditors’ Report
77 Consolidated income statement
78 Consolidated statement of comprehensive income
79 Consolidated statement of financial position
80 Consolidated statement of cash flows
81 Consolidated statement of changes in equity
83 Notes to the consolidated financial statements
117 Tarsus Group plc - company income statement
118 Tarsus Group plc - company statement of financial position
119 Tarsus Group plc - company statement of cash flows
120 Tarsus Group plc - company statement of changes in equity
121 Notes to the financial statements of Tarsus Group plc
OTHER INFORMATION
125 Shareholder information
Tarsus Group plc 1
Strategic Report
who we are
“Our ‘Quickening the Pace’ growth
strategy gained further traction
and we achieved industry leading
organic growth through our focus on
delivering larger numbers of buyers
to our exhibitions – up 9% in 2015.”
Douglas Emslie, Group Managing Director
its portfolio by both geography and industry through
a combination of organic growth supplemented by
strategic acquisitions. The Group’s businesses are
managed strongly at a local level with a focus on growing
the number of buyers that attend exhibitions and
the Group is increasingly taking its brands into new
territories to deliver organic growth. Acquisitions have
been identified in faster growth markets or industries
undergoing fundamental change – collectively “markets
in transition” – adding to the Group’s growth dynamic.
A key differentiator is a culture that welcomes and
encourages entrepreneurs to join the Tarsus team and
develop their business in partnership.
THE MARKETPLACE
WHAT WE DO
Tarsus owns and manages a portfolio of leading trade
exhibitions in a range of sectors in the Emerging
Markets, the US and Europe. These exhibitions
represent a vital business-to-business sales channel
that facilitates the development and monetization
of relationships between buyers and sellers in their
respective markets. Tarsus also reinforces its trade
shows through online interaction and education and
by the provision of market-leading publications and
through thought leadership conferences.
One key to Tarsus’ success is its ownership of leading
brands backed by high-quality local delivery and
expertise. A “must attend” event – like Labelexpo
Europe for example – is a valuable asset and presents
significant barriers to entry to competitors.
Since its inception in 1998, Tarsus has developed
2 Tarsus Group plc
The global exhibition industry grew by over 4% in 2014
and is now estimated to be worth some $29 billion.
AMR International estimates a similar rate of growth in
the near-term supported by above average growth in
Emerging Markets, including the Gulf region, along with
further recovery in mature markets. While the US and
Germany remain the two largest individual markets,
China has now moved into third position and is expected
to be bigger than Germany in the not too distant future.
Tarsus has consistently built up its exposure to emerging
markets and following the sale of its French business
in 2015, these now comprise over 80% of annual proforma revenues. The portfolio has grown through a
combination of organic growth and acquisition and the
Group’s main business interests now lie within America
and the emerging markets of China, Middle East, Turkey,
Mexico and Southeast Asia. Key events and brands cover
a diverse range of industries including the aerospace,
automotive, fashion, construction and houseware
business sectors. As a result the Group’s portfolio looks
increasingly well positioned.
TARSUS AT A GLANCE
Business sector
Key events and brands
EM
Aerospace
Dubai Airshow, MEBAA, AIME
✓
Automotive
AAITF, AMB Tarsus Auto
✓
Fashion
OFFPRICE, SIUF
✓
Education
GESS
✓
Housewares
Zuchex, Ideal Homex
✓
Horticulture
Plant Fair
✓
Hospitality
AMB Tarsus Food and Hotel
✓
Infrastructure and
Building
IIW, Big 5, AMB Tarsus Energy, Water and Build, Yapi
Decoor, REW, ISG
✓
Industrial and
Manufacturing
Asansor, Plastimagen, Komatek, Expomanufactura,
Industrial Print Expo, Equipment Manufacturing
✓
Labels and Printing
Labelexpo, Gulf Print & Pack, Labels & Labeling,
Additive Manufacturing
✓
Livestock
Agrilivestock
✓
Medical
South Beach, PAINWeek, Medical Equipment, MCII,
Cardio, CMHC
✓
Travel and Leisure
COTTM, China Horse Fair
✓
US
EU
✓
✓
✓
✓
Tarsus geographic footprint
AMERICA
EUROPE
EMERGING MARKETS: Middle East,
China, Turkey, South East Asia, Mexico
Tarsus Group plc 3
Strategic Report
strategy
“2015 was an important year for
Tarsus. We passed an important
milestone in the strategic progress
of the Group with the sale of our
French business. This will allow us
to concentrate our resources on our
selected core geographies which offer
the best opportunities for growth.”
Douglas Emslie, Group Managing Director
STRATEGY
Tarsus launched its “Quickening the Pace” strategy in
2013. This seeks to accelerate the pace of financial
returns to Shareholders through three principal levers:
• Driving organic growth from the existing portfolio by:
• increasing buyer attendance, thereby increasing the
returns on existing assets
• geographical replication of major brands into fast
growing markets
• Small strategic acquisitions in selected geographies
Our strategy is building on the reshaping of the
portfolio over the past few years, which has seen
the Group’s exposure to selected Emerging Markets
economies expand progressively to take advantage
of higher levels of growth. These selected markets
comprise China, Mexico, South East Asia, Turkey and
the Middle East (principally Dubai).
This ability to deliver our strategy is enhanced by the
entrepreneurial approach the Group takes towards
developing its portfolio. Exhibition markets globally are
consolidating and high quality assets are in demand.
Tarsus’ flexibility and willingness to work in partnership
with vendors to develop their business and further
their strategic goals is increasingly seen by the Group
as a point of differentiation from our competitors and
is attractive to vendors.
The “Quickening the Pace” strategy targets countries
that are experiencing a fundamental shift in prospects
– like Indonesia – or industries where technological
innovation or substantial additional investment is
driving growth – for example infrastructure in Turkey.
The acquisition of 50% of AMB in 2015 is an
ideal example. This business – focused largely on
4 Tarsus Group plc
Tarsus’ “Quickening the Pace” strategy was launched at the beginning of
2013 and is designed to accelerate financial returns to shareholders
through:
• Organic growth from the existing portfolio by growing buyers
• Geographical replication of brands into faster-growing markets
organic growth indonesia
The below table shows the expansion in Indonesia since Tarsus aquired PTIA in 2013
Existing event acquired
in 2013
New brands added in
2014+2015
Brand replications
JV Launch
Visitors 2013 4,500 Visitors 2015 21,000
Myanmar and Cambodia – has very experienced
and entrepreneurial management and offers Tarsus
first mover advantage in some key sectors in rapidly
growing markets. In addition it adds strength and
depth to the Group’s South East Asian operations and
should facilitate the replication of some of Tarsus’
leading brands into the region.
STRATEGIC PROGRESS IN 2015
Our strategic focus delivered further positive results in
2015, an important outturn given the biennial weighting
in the portfolio. The major events – in particular
Labelexpo Europe and the Dubai Air Show - performed
extremely well and buyer growth across the portfolio
was very encouraging at 9%. In addition, the Group ran
a record number of replications – 15 - during the year.
The Group also disposed of its French business, raising
its exposure to the Emerging Markets and the US –
resulting in 86% of pro-forma revenues coming from
these geographies, ahead of its 75% 2015 target.
Organic growth - Buyer growth was 9% in 2015,
compared to 6% in 2014 –ahead of the Group’s KPI of 5%.
An ability to grow the number of buyers that attend
the exhibitions is a key factor in their ultimate success.
Deep knowledge of our customers ‘ requirements,
up-to-date databases, must attend conferences and a
focus on consumer service all contribute to this goal.
Replications - Tarsus has a strong track record
of successfully replicating its brands globally. The
Group’s Labelexpo portfolio has grown from two
western events and one in Singapore to a series in
nine countries, the majority being in the Emerging
Markets. This has been delivered by leveraging Tarsus’
resources, expertise and connections at both a local
and global level.
Tarsus’ strategy to take leading brands in one of its
markets and launch and develop them into others or
to broaden reach within one of its existing territories
continues to build momentum. There were 15
replications in 2015 including the Dubai educational
event GESS which launched in Mexico and Indonesia
and three additional events in the US in Atlanta,
Dallas and Las Vegas, related to the Boston-based
Cardiometabolic Health Congress, which the Group
bought in 2014.
Tarsus Group plc 5
replications gathering pace
2015
Repeat
2016 new
GESS
ü
ü
-
Additive Manufacturing
ü
ü
ü
Cardio
ü
ü
ü
OFFPRICE
ü
-
-
Industrial Print
ü
ü
ü
Zuchex
ü
-
ü
Turkey
ü
ü
-
Aerospace
ü
ü
ü
AAITF
ü
-
-
AMB
-
-
ü
15
11
11
Target
Achieved
2015
5-10% pa
7%
Increasing share of revenues from US and Emerging Markets
75%
86%
Visitor growth
5%
9%
Monterrey
México
Febrero 2-4
EXPO MEXICO 2016
www.industrialprintexpo.com
“Quickening the pace” - KPIs
Accelerating earnings per share growth
This table shows the key performance indicators of the Group’s “Quickening the Pace” strategy
Acquisitions - Tarsus’ acquisition strategy focuses on
markets in transition and market-leading brands. By
their nature such acquisitions provide higher growth
and the possibility of internationalization. In addition,
Tarsus’ entrepreneurial culture is often a valuable asset in
terms of attracting potential vendors, many of whom are
entrepreneurs themselves, who wish to further grow in
partnership.
Following a very active year for acquisitions, 2015 saw the
addition of AMB to the portfolio, substantially widening
6 Tarsus Group plc
the Group’s position in South-East Asia by adding
Malaysia, Myanmar and Cambodia to its Indonesian base.
Tarsus intends to scale up AMB’s existing events and
launch new exhibitions in its existing markets.
The disposal of the Group’s French business was in line
with the “Quickening the Pace” strategy that has seen
an increasing focus on economies offering the best
opportunity for growth. The disposal allows Tarsus to
recycle capital and continue to invest in these higher
growth economies.
Strategic Report
highlights
RECORD PERFORMANCE
Strong performances from key shows have delivered
record revenue and profits for the year
CONTINUED STRONG ORGANIC GROWTH
Like-for-like revenues up 10%
DUBAI AIRSHOW SUCCESS
Strong revenue growth and buyer attendance
increased 9%. 2017 rebooking strong and at record
level for show
CONTINUED GROWTH IN BUYER FOOTFALL
9% increase across the Group. Buyer growth driven
through established events’ continued strong
performances and successful organic replications
LABELEXPO EUROPE STRENGTH
Celebrates 35th anniversary with largest ever show.
Buyers up 12% and record rebooking for 2017
SUCCESSFUL INTERNATIONAL REPLICATIONS STAGED
15 organic event replications including GESS in Mexico
and Indonesia
PAINWEEK PURCHASED
Acquisition of America’s largest pain conference
completes Tarsus’ Medical Division as footprint is
expanded and diversified to cover all four pillars of
preventative medicine.
DISPOSAL OF FRENCH BUSINESS
Completes portfolio transformation started in 2010
with further reduction in exposure to Eurozone
PORTFOLIO DOUBLED IN SOUTHEAST ASIA
Acquisition of 50% of AMB Group bringing major
presence in Myanmar and Cambodia and expansion
opportunities in Vietnam, Philippines, Laos and Sri Lanka
Tarsus Group plc 7
kevin zacharoff
wednesday 9.9
Strategic Report
Chairman’s and Managing
Director’s statement
STRATEGIC OVERVIEW
The Group made further progress in delivering its
“Quickening the Pace” strategy which is focused on
accelerating financial returns to shareholders. This
is being achieved through a combination of organic
growth from the existing portfolio, geographical
replications of major brands across faster growth
economies and the identification of small strategic
acquisitions in our selected geographies.
Tarsus made two strategic acquisitions in the year. The
addition of Painweek in the US completed our footprint
for the Medical Division and extends our coverage to
address all four pillars of preventative medicine. The
acquisition of 50% of AMB gives us further exposure to
the fast growing markets of South East Asia.
The Group’s entrepreneurial culture, specifically its
size, flexibility and willingness to collaborate with its
partners in the development of their businesses,
is proving increasingly attractive to vendors and
proved instrumental in enabling us to secure these
acquisitions for the Group helping to accelerate the
overall strategy.
In the future, there will be an emphasis on gradually
buying in the outstanding minority interests of our joint
ventures in the Group’s Emerging Markets portfolio.
This will help us deliver sector leading earnings per
share growth towards the top end of our target range.
managing its portfolio of events, adjusted EPS grew (on
a constant currency basis over the biennial cycle) 7%
per annum to 21.4p, against a 5-10% growth per annum
target.
2. Increasing share of revenues from faster
growth economies in the emerging markets
and the US
The Group has identified geographies (certain
emerging markets and the US) which it believes
provide higher potential for growth. For the year ended
31 December 2015 the Group recorded 86% of proforma revenues (79% of reported) from its emerging
markets and US events, ahead of its 75% target.
3. Driving visitor growth
The Group aims to drive visitor attendance at its events
and strong growth of 9% in 2015 compares favourably
with an industry average of 3% and an internal target
of 5%. This is being assisted by executing a focused
programme for every show and by higher levels of
knowledge sharing and best practice disciplines internally.
FINANCIAL RESULTS
The Group assesses its performance against three
KPIs:
The financial results were in line with the Board’s
expectations. Group revenues for the full year were
£86.9m (2014: £60.6m), up 15% on a biennial basis
(2013: £75.9m). Like-for-like revenues, at constant
exchange rates, increased by 10%. Revenues were not
materially impacted by foreign exchange in 2015 with a
strengthening in the US dollar offsetting a depreciation
of the Turkish Lira.
1. Accelerating EPS growth
Through targeting underlying growth at its exhibitions
in growth markets, the Group aims to deliver enhanced
financial returns to its shareholders. By proactively
Group adjusted profit before tax was £26.3m (2014:
£17.0m), up 9% on a biennial basis (2013: £24.2m).
Net interest expense of £2.0m (2014: £1.7m) reflected
increased debt levels across 2015 as a result of
8 Tarsus Group plc
acquisitions. Reported profit before tax was £19.1m
(2014: £7.1m).
The Group incurred an amortisation charge of £5.2m
(2014: £4.5m) and an impairment charge of £1.8m
(2014: nil) on the disposal of its French business.
The adjusted tax charge of £3.8m (2014: £2.5m)
represents 15% (2014: 15%) of the Group’s adjusted
profit before tax. The reported tax charge is £2.2m
(2014: £1.7m). The Group continues to focus on tax
efficiency and generates nearly all of its profits outside
of the UK, including markets with significantly lower tax
rates.
Adjusted earnings per share were 21.4p (2014: 12.7p),
7% up on a biennial basis (2013: 20.0p). Basic earnings
per share for 2015 were 14.4p (2014: 5.0p).
The group generated £27.0m of adjusted operating
cash* during the year (2014: £19.5m and 2013:
£23.9m). The Group’s net debt as at 31 December
2015 increased to £43.8m (2014: £38.4m).
Reflecting the strong financial performance during
2015 the Tarsus Board is proposing a final dividend
of 5.9p per share, bringing the total for the year to
8.4p per share (2014: 7.8p per share), an increase of
8%. This proposed rise is the fifth consecutive year of
increases to the dividend and represents a compound
annual growth rate of 7.5%.
The final dividend, subject to Shareholder approval, will
be paid on 7 July 2016 to Shareholders on the Register
of Members on 27 May 2016. A scrip dividend will
continue to be offered as an alternative.
CORPORATE ACTIVITY
Two strategic acquisitions were completed during the
year.
In May 2015, Tarsus acquired 100% of Painweek in
the US. This completes the exposure of the Group’s
medical business to the four main sectors of the US
preventative medical market – neurology, endocrinology,
cardiovascular and oncology. Painweek has enjoyed
strong growth since it was established in 2007 and its
main annual event is supported by a series of satellite
events in the US and a strong digital presence.
In July 2015, the Group purchased 50% of the AMB
Group, an established South-East Asian exhibition
organiser with a major presence in Myanmar and
Cambodia. This adds significant scale and presence
across the region, building on Tarsus’ existing business
in Indonesia. Tarsus intends to scale up AMB’s events
and launch new exhibitions in its existing markets.
The Group sold all of its French business in July 2015 to
French management, in line with the previously stated
strategy of reducing exposure to France and allowing
the Group to concentrate resources on its selected core
geographies which offer the best opportunities for growth.
OPERATING REVIEW
EMERGING MARKETS
Dubai - The Group’s largest event, the Dubai Airshow,
once again saw strong revenue growth and buyer
attendance increased by 9%. The aerospace sector in
the region continues to go from strength to strength,
this was reflected at the Dubai Airshow where a record
rebook for the next edition in 2017 was secured.
The education event GESS performed well with
buyer growth of 11%. GESS is one of the Group’s key
replication brands with successful launches during
2015 into both Mexico City and Jakarta.
Turkey - Overall the portfolio performed well and
once again there were strong performances from
the larger shows, notably the biennials, Asansor
(lifts) and Komatek (construction), as well as the
Flower Show (landscaping equipment and services).
Zuchex (Homewares) saw buyer growth of 6% with
its international visitors running at twice that level
supported by investment into multi-lingual marketing
and advertising. Ideal Home (Homewares) and Sign
(Advertising) both produced solid results. The Sterling
translated results were impacted during 2015 by a
weakening of the Turkish lira by 30% compared with
prior events.
China - We were encouraged by the performance of
our Chinese business in 2015 despite slowing GDP
growth in China. Hope, the Group’s Central China
operation turned in another year of good growth led by
its medical equipment events. SIUF, the leading Asian
show for underwear demonstrated good progress over
the 2014 edition while AAITF (auto aftermarket) was
Tarsus Group plc 9
“The Group’s size, flexibility and willingness to work with vendors to develop
their businesses in partnership with Tarsus is becoming increasingly attractive
to partners and helps accelerate the overall strategy”
Douglas Emslie, Group Managing Director
successfully repositioned in Shenzhen in January 2015
where it performed well.
Mexico - There was a good performance from Expo
Manufactura (manufacturing) including a successful
launch of the co-located Industrial Print Expo. GESS
(Dubai-based) also enjoyed a successful replication
launch into the Mexican market.
§ Neurology – Painweek
§ Cardiovascular – Cardiometabolic Health Congress (CMHC)
§ Oncology – South Beach Symposium (SBS)
§ Endocrinology – MMI
South-East Asia - In Indonesia the established IIICE
(infrastructure) event achieved strong buyer attendance
following increased investment by the Group in
marketing. The first edition of Big 5 Construct, held via
a joint venture with DMGT, was launched successfully.
Construction and infrastructure are important and
growing areas for the Indonesian economy and the
Group is well placed to take advantage of developments.
Our GESS education brand (Dubai-based) also enjoyed a
successful launch in Jakarta in 2015 and the outlook for
this event is very promising.
A number of initiatives were launched in 2015 to
drive future growth. Firstly, the Group has seen a
number of opportunities arise from collaboration
and cross-working within the business units which
now make up the division. Secondly, building on the
model successfully employed by CMHC, this division
is establishing a central team focussed on obtaining
educational grants from pharmaceutical companies to
develop an additional revenue stream across the other
business units. Finally, the business is launching a new
medical technology event in December 2016.
The Group substantially increased its regional
presence with the acquisition of 50% of AMB in July
2015 thereby adding Malaysia, Myanmar, Cambodia
and the Philippines to its Indonesian base. The ASEAN
economies are growing strongly and the joint venture
will offer Tarsus first-mover advantage in some key
sectors in these exciting markets. AMB performed in line
with our expectations and its acquisition business case.
The Group’s established anti-aging events in Orlando
(May) and Las Vegas (December) were both record
shows with increased attendances, while both SBS and
Painweek performed well in their first editions under
Tarsus ownership.
US
EUROPE
Medical - The Group has continued to reposition the
Medical Division to address the larger mainstream
medical market. Following the acquisition of Painweek
in July 2015, the Group now addresses all four pillars of
the preventative medicine market. Its key brands are:
The Group’s second largest event, Labelexpo Europe,
produced a very strong result with buyers up by 12%
on the previous edition to a record 35,700. In addition,
re-bookings at the event for the 2017 edition reached
a very encouraging 84%.
10 Tarsus Group plc
Offprice - Both Offprice events in Las Vegas during
2015 performed well with solid revenue growth of 5%.
Geographical Analysis
Emerging Markets
United States
Europe
(£m)
2015
2014
2013
2015
2014
2013
2015
2014
2013
Biennial revenue
24.8
4.3
21.1
-
5.1
-
10.5
-
9.0
Annual revenue
18.8
19.4
16.0
25.4
19.5
18.7
7.4
12.3
11.1
Total revenue
43.6
23.7
37.1
25.4
24.6
18.7
17.9
12.3
20.1
Adjusted profit before tax
15.0
7.3
14.0
11.4
11.7
8.8
4.1
1.2
4.8
highlights
Revenue
adjusted profit before tax
£86.9m
2015
£75.9m
2013
£26.3m
2015
£24.2m
2013
adjusted effective tax rate
adjusted earnings per share
15%
2015
2013
15%
2013
The 3D Printshow business successfully completed
an aggressive launch programme in 2015. We are
looking to consolidate this business in 2016 into two
larger events, in Amsterdam and Pasadena, California
focused on industrial additive manufacturing, to
address the B2B market.
The Group completed the sale of its French business
in July 2015 in line with its strategy to focus on markets
with higher growth potential.
£27.0m
£23.9m
20.0p
2013
ADJUSTED operatiNG CASH
2015
21.4p
2015
dividend per share
8.4p
2015
7.3p
2013
solid events. Expo Manufactura recorded a strong
performance in Mexico in February.
Forward bookings for the Group’s major events in
2016 are tracking +10% ahead of 2015 (adjusted
for biennials and acquisitions). We are mindful of
the current global macroeconomic uncertainty and
geopolitical risk and have budgeted accordingly.
The Group is well positioned to deliver a good
performance in 2016.
OUTLOOK
Trading for the first two months of 2016 has been in
line with management expectations. AAITF showed
good growth in its second edition in Shenzhen. AIME
and MRO in Dubai also performed well. In the US
the South Beach Symposium and Off Price were
Neville Buch
Chairman
Douglas Emslie
Group Managing Director
2 March 2016
2 March 2016
Tarsus Group plc 11
Strategic Report
Financial Review
“Our high quality portfolio is delivering strong growth in revenues, profits
and cash. With a strong balance sheet we are well positioned to achieve our
‘Quickening the Pace’ strategy.”
Dan O’Brien, Group Finance Director
FINANCING
The geographical composition of Tarsus’ international
event portfolio means that revenues and profits
are generated in a range of currencies, principally
US Dollars, Euros, Turkish Lira and Sterling. In 2015
approximately 55% of revenues were generated in
US Dollars, 6% in Euros, 12% in Turkish Lira, 16% in
Sterling and 10% in Chinese Renminbi. As a result of
the Group’s currency composition, Sterling translated
trading results are significantly affected by any changes
in prevailing exchange rates during the year. The
average exchange rates applicable for 2015 were:
§US$: 1.50
§Euro: 1.38
§Turkish Lira: 4.20
2016 budgeted exchange rates are US$: 1.50, Euro:
1.35 and Turkish Lira: 4.30.
CASH FLOWS
Tarsus continues to generate strong cash flows from its
operations. The larger events in the Group’s portfolio
typically have a positive working capital cycle and
the business in general has a low capital investment
requirement.
The biennial nature of the Group’s event portfolio
results in an increase in working capital (excluding
cash) in odd years (including 2015) which include the
Group’s two largest events. This occurs as deferred
income relating to these events builds up in the
Statement of Financial Position ahead of the events in
the following year.
12 Tarsus Group plc
During 2015, the Group generated £27.0m of adjusted
operating cash* (2014: £19.5m; 2013: £23.9m).
The key non-operating cash flows in 2015 included:
§Dividends paid of £7.6m
§Deferred consideration payments totalling £7.2m
§Tax and interest paid totalling £3.7m
§Acquisition of PainWeek and AMB £5.9m
§Proceeds on disposal of France £3.2m
§Share purchases by Employee Benefit Trust £1.5m
NET DEBT
The Group’s funding objective is to ensure that
the business has sufficient resources, secured on
competitive terms, to meet its various financial
commitments as they arise. It achieves this objective
by actively monitoring its cash flows and requirements
on both an historic and forward looking basis. The
Group is cautious in its approach, applying appropriate
sensitivities to both the quantum and timing of its
projections.
In June 2015 Tarsus’ external bank debt facility of £60m
was extended to £75m and remains in place until
September 2020. At 31 December 2015 all borrowings
were denominated in Sterling. The Group has entered
into interest rate swaps to fix the interest rates payable
under its banking facilities.
The Group’s net debt was £43.8m at 31 December
2015 (31 December 2014: £38.4m).
NET ASSETS
As at 31 December 2015, the Group had net assets of
£39.9m (31 December 2014: £37.5m).
INTANGIBLE ASSETS
Intangible assets comprise goodwill, trademarks and
customer lists. The carrying value of intangible assets
at 31 December 2015 was £127.1m (31 December
2014: £126.8m).
WORKING CAPITAL
It is the Group’s policy to recognise profits upon the
completion of an event. Until completion, revenues and
costs are held on the Statement of Financial Position.
Included in net current liabilities as at 31 December
2015 is deferred income of £24.1m (2014: £28.5m;
2013: £18.4m). Prepaid event costs of £4.8m (2014:
£3.7m; 2013: £2.8m) are included in Trade and other
receivables. Dan O’Brien
Group Finance Director
2 March 2016
Tarsus Group plc 13
Dubai Airshow 2015
14 Tarsus Group plc
50%
Percentage of Group revenue generated
from Emerging Markets in 2015
(£m)
2015 20142013
Biennial revenue
24.8
4.3
21.1
Annual revenue
18.8
19.4
16.0
Total revenue
43.6
23.7
37.1
Adjusted profit before tax
15.0
7.3
14.0
Emerging markets
Middle East
China
Turkey
Southeast Asia
Mexico
Tarsus’ strong foothold in the emerging markets of
China, the Middle East, Turkey, Southeast Asia and
Mexico positions its market leading brands as excellent
platforms for sustainable growth.
Strategic Report - Emerging Markets
MIDDLE EAST
With its open economy, sizeable
middle class population with high
per capita income and excellent,
modern infrastructure, Dubai
offers many compelling reasons for
doing business in the region.
The United Arab Emirates (UAE) is a federation of
seven states which form one of the Middle East’s
most important economic centres. The second
largest Emirate, Dubai is also the most populated
with over 2.4 million inhabitants. Having diversified
its economy away from fossil fuels, set up industryspecific free zones throughout the city to attract
foreign investment and offering a pro-business
environment, the entrepreneurial spirit is alive and
well in Dubai.
KEY FACT :
BUYERS INCREASED 10% IN
COMPARISON TO PREVIOUS
EDITIONS WITH A COMBINED
FOOTFALL OF 95,833
16 Tarsus Group plc
LOOKING BACK – REGIONAL HIGHLIGHTS
AEROSPACE - The Group organised four aerospace
industry events during 2015 including the Group’s
flagship Dubai Airshow and newly launched MEBAA
Show in North Africa.
The 14th Dubai Airshow wrapped up an action-packed
week at the beginning of November which saw 1,103
exhibitors representing 61 countries meet, network
and do business. Buyer numbers for this year’s aviation
industry showcase broke all previous records attracting
66,346 sector professionals; representing an increase
of 9% on 2013’s show. On the financial front, the final
tally for the 2015 order book came in at US$37.2
billion, the fourth highest since records began in 1999,
with a wide range on onsite deals covering high profile
aircraft, maintenance services, infrastructure and
systems and flight training programme agreements.
The smaller Aircraft Interiors Middle East, (AIME), is
co-located with the Maintenance, Repair & Overhaul
(MRO) Middle East show. It is firmly established as the
ideal platform for interiors suppliers, manufacturers
and buyers to network and form new relationships in
the Middle East. The 2015 edition, held in February,
reported increased attendance compared to 2014 with
4,298 buyers and 251 exhibitors.
Capitalising on the success of the existing MEBAA Show
held biennially in Dubai, the inaugural MEBAA Morocco
Show was staged in Casablanca during September. The
first business aviation show of its kind in the region,
the two-day event attracted 2,033 buyers. The African
business aviation market has been resilient through
the global financial crisis. New aircraft sales have fared
better than in developed markets such as Europe and
North America and Africabusiness.com stated that
Africa’s business jet fleet has more than doubled in
the last 10 years. Held under the high patronage of
His Majesty King Mohammed VI and organised by F&E
Aerospace on behalf of the Middle East and North
Africa Business Aviation Association, its next edition is
due in 2017.
DUBAI AIRSHOW 2015
Exhibitor Q&A with Adam Thomas, Senior Spokesman
for Defence & Security in UK TI DSO
THE VALUE OF DOING BUSINESS IN AN EMERGING
MARKET
How was it exhibiting at the Dubai Airshow?
“The Dubai Airshow has been absolutely fantastic. We’ve
been incredibly impressed at the organisation. The
networking has been brilliant and this is a really good
opportunity for the UK to show continued commitment to
the UAE. The Dubai Airshow is unique and one of the best
airshows in the world.”
What makes the Dubai Airshow unique in your
opinion?
“Two fold, what you’ve done wonderfully well here is you’ve
brought together the civil and defence side incredibly
well, you’ve brought delegations from both sides as well.
Our SME’s have met people they have never met before
and have been able to find out much more about what
people’s requirements are.”
EDUCATION - Quality education plays a key role in
the economic development of any nation and in the
case of the GCC countries, it is one of the key forces
enabling their future growth. As the education sector
remains a key pillar of development, the Group’s
GESS brand continues to perform strongly in line with
demand from the region.
Since its launch in 2008, GESS Dubai has grown
exponentially. 2015’s edition was held in February
(alongside the GESS Education Awards and Global
Education Forum) achieving gains in both buyers and
exhibitors. The exhibition and conference programme
concluded with over 400 exhibitors (up from 350 in
2014) and 10,000 buyers. 2015 also saw the Group
launch successful event replications in Mexico and
Indonesia.
LABELS & PACKAGE PRINTING - Gulf Print & Pack is
billed as the premiere print industry trade show in the
Middle East and North African region. Originally two
separate co-located exhibitions called Gulf Print and
Gulf Pack, which were first held in 1990, the event’s
format was reworked in 2011 when it was rebranded.
The region’s definitive platform for the commercial
and package printing industry, 2015’s edition, which
was held in April, posted a 26.7% rise in buyers with a
footfall of 12,186 and featured over 300 exhibitors.
“I also think it is the atmospherics, it’s really well organised
and relaxed. The delegations have been very comfortable
when they have come here.”
How has the business benefitted from exhibiting
at the Dubai Airshow?
“The guys that have come here have met a phenomenal
number of people, realised how they can use this
requirement and realise and get their technology over.”
“Our SMEs here have seen major delegations, there’s been
good B2B and they’ve had a chance also to talk to local
companies about their future requirements. So it’s a really
good environment to do business in and, I think, probably
one of the best environments in the world.”
What are your top highlights from exhibiting at
the show?
“The show is probably one of the best networking events
in the world and it has given us a great opportunity to
expose our capabilities in the defence and security sector.
But most importantly, it gives our small and medium size
companies a chance to meet with delegations that we
otherwise perhaps wouldn’t meet at all. My view is, if you
want to do business in the gulf, you have to be at the Dubai
Airshow.”
LOOKING AHEAD
Forward bookings remain in line with expectations for
2016’s events including AIME, MRO, MEBAA and GESS
Dubai.
Tarsus Group plc 17
Strategic Report - Emerging Markets
China
With an historic average annual growth
of 10%, China’s economic rise over the
last 30 years has resulted in the single
biggest creation of a consumer class the
world has ever seen. With a population
of over 1.3 billion, China has become the
world’s second largest economy.
After experiencing rapid growth for many decades,
China’s economic data shows its economy has
been gradually slowing down over the last few
years. Despite this, China still remains a vast engine
for global development with growth close to 7%.
Still developing, China is a complex and diverse
place in which to do business. Due to its sheer
scale and size, it can be subdivided into regional
economies where opportunities vary widely.
Opening its first office in Shanghai in 2005, Tarsus
hosts over 20 events across different industries in
China’s first and second tier cities.
KEY FACT :
SIUF 2015 HOSTED OVER 61,000
BUYERS AND 400 EXHIBITORS
18 Tarsus Group plc
LOOKING BACK – REGIONAL HIGHLIGHTS
AUTOMOTIVE AFTERMARKET - AAITF was the first
large event of 2015 and took place for the first time
in Shenzhen. This has been a transitional year for the
event given the change of location from its previous
home in Guangzhou. The venue move was received
better than expected and the 11th addition of the
annual trade show received 3,500 exhibitors and just
under 49,000 buyers.
CLOTHING - Part of the Tarsus Group portfolio
since early 2014, China (Shenzhen) International
Brand Underwear Fair (SIUF) is the leading show for
underwear garments in the Asian Pacific market. Launched In 2006, the show is held annually in
Shenzhen, Southern China.
The global underwear market is currently valued at
approximately $30 billion. The Chinese market was
valued at approximately $10 billion in 2010 and is the
fastest growing market globally, supported by a strong
domestic manufacturing and retail base.
2015’s show, the second organised under Tarsus’
ownership, covered an exhibition area of 58,500
square metres and registered over 400 exhibitors and
increased total of 61,000 buyers.
LABELS & PACKAGE PRINTING - Held biennially
since 2003, Labelexpo Asia is the region’s largest trade
show for the label and packaging printing industry.
Labelexpo Asia 2015 enjoyed its most successful
edition with 300 exhibitors and 22,104 buyers - an
increase of 3.2% on 2013.
OTHER BUSINESS SECTORS - Hosting numerous
other events across China as part of its joint venture
with Hope, other highlights included the China Horse
Fair (CHF). Since its launch in 2007, it has consistently
grown and developed alongside the industry it
represents and it is now acknowledged as China’s
largest, most established and international gathering
for trade professionals involved in all forms of equine
sports and leisure activities. CHF 2015 attracted 130
20142015
Exhibitors
345416
International exhibitors
35
Buyers
International buyers
42
43,83061,358
957
1,447
INTERNATIONALISATION IN THE EXHIBITION
INDUSTRY
Q&A with Laura Fan, Project Director, SIUF
What benefits has the joint venture with Tarsus
brought to SIUF?
exhibitors and 3,378 buyers, representing an increase
of 44% over 2014’s show.
China Outbound Travel & Tourism Market (COTTM)
was held in Beijing in April with 350 exhibitors
and 3,800 buyers - up 15% on previous years. The
industry’s definitive B2B event for outbound tourism,
this year saw a full three day seminar and workshop
programme consisting of targeted sessions designed
to address key issues and learning requirements of
both exhibitors and visitors. The team also organised
two supporting regional events in Guangzhou and
Shenzhen which focused on more intimate ‘tailormade’ networking activities.
As an international media and exhibition group, Tarsus
has been helping SIUF to open the door to the wider
international market. For the first year, best practice was
shared to put more of an international perspective on the
SIUF team’s management skills in terms of operations,
marketing, PR, media, sales presentation, business
partner recruitment and so on.
What areas of the business/show has the
partnership helped enhance the most?
Tarsus focuses on promoting SIUF as an international
brand to customers. As a result some high end
international lingerie brands have been recruited by
Tarsus to attend SIUF 2016. Meanwhile Tarsus is working
closely with different associations, media and agencies
to expand the influence of SIUF to a wider target group,
aiming to leverage the brand image of SIUF to an even
higher standard.
How do you see the SIUF brand developing in the
next five years?
SIUF has good opportunities to enter new territories such
as casual wear and swimwear because of their natural
links with the lingerie industry.
The SIUF brand has very high potential to become a
world-wide leading international fair for the lingerie
industry. In addition, the Chinese lingerie industry’s very
strong growth will definitely support this trend.
LOOKING AHEAD
The outlook for 2016 is positive with AAITF’s continued
growth and steady growth expected across the rest of
the portfolio.
Tarsus Group plc 19
Strategic Report - Emerging Markets
TURKEY
With a population of around 77
million, Turkey offers a large,
skilled and cost effective labour
force. In addition, approximately
60% of its population are aged
under 35 providing substantial
growth potential. Turkey also offers
attractive prospects for business
diversification, being an excellent
springboard for business with
central Asia and the Middle East.
Tarsus has been active in the Turkish market since
2011 when it acquired Istanbul-based IFO. This
was quickly followed with the acquisitions of CYF
and Life Media in 2012 and SADA and the Komatek
brand in 2014.
KEY FACT :
ZUCHEX POSTED A RECORD EDITION
WITH 607 EXHIBITORS AND 33,993
BUYERS
20 Tarsus Group plc
LOOKING BACK – REGIONAL HIGHLIGHTS
HOUSEWARES - The Turkish housewares sector
maintained its strong growth throughout 2015 and the
Group’s Zuchex brand celebrated its most successful
ever edition. The four-day event hosted 607 exhibitors
and welcomed 33,993 buyers, up 6% on 2014. The
number of international exhibitors grew, up 12% on
the previous biggest year (2012) and overseas buyer
attendance also rose 12%. The sister event Ideal
Homex posted robust results with good buyer and
exhibitor attendance.
INDUSTRIAL - Bought in 2014, Komatek was held
under Tarsus’ ownership for the first time in May.
Marking its 14th edition, Ankara played host to the
global construction machinery industry. Supported
by IMDER - The Turkish Construction Machinery
Distributors and Manufacturers Association, whose
37 members account for 96% of the country’s sector
- exhibitors occupied an area of more than 61,291
net square metres, an increase of 15% over 2013. A
record 505 suppliers from 25 countries displayed their
latest products to over 32,000 professional buyers and
operators.
GROWING OUR EVENTS THROUGH
DEVELOPING INDUSTRIES
Q&A with Levent Baykal, general manager of SADA.
What benefits for SADA and Komatek have you
noticed by partnering with Tarsus?
“The biggest benefit has been the freedom allowed and
respect shown for the experience and expertise of the
operating team in managing the business. Being allowed
to work freely but with close scrutiny helped the SADA
team to set goals and achieve targets while doing work
the way we know.”
OTHER SECTORS - The Group’s other biennial event,
ASANSOR Istanbul, took place during March. The 14th
edition of what is one of the world’s top three elevator
exhibitions, hosted 434 exhibitors from 28 countries
including pavilions from Germany, China and Italy.
The show was attended by 28,278 buyers from 88
countries including 6,082 international attendees.
The Group also staged several other annual events.
The 11th Recycling, Environmental Technologies and
Waste Management International Fair (REW Istanbul),
was co-located alongside the first ever edition of ISG
Eurasia, the new occupational health and safety fair
which is organised with the support of the Turkish
Ministry of Environment and Urbanisation. The
combined events attracted 322 exhibiting companies
from 22 different countries and 10,582 buyers from 49
countries.
The 8th YAPI Decoor event ran in Ankara and hosted
120 exhibitors and 12,389 buyers while the newly
launched SecuriTex Eurasia fair which caters for the
security and safety market drew 101 exhibitors and
4,358 buyers.
SIGN Istanbul is the region’s most important platform
for showcasing the latest innovations in sign making,
advertising and digital print technologies and in 2015 it
achieved a new record for buyer attendance. Featuring
438 exhibiting companies from 30 countries, the
annual event hosted 23,900 buyers.
The 7th edition of Eurasia Plant Fair/Flower Show
Turkey took place in November. Serving the
professional horticultural and floricultural sector, it
is strategically located in this established trade and
commercial hub for the region. 2015’s exhibition
attracted 319 exhibitors from 21 countries and 14,865
buyers from 53 countries, making it the largest and
most international exhibition for the area’s rapidly
expanding ornamental plants and landscaping market.
“Being a member of an international group pushes
Komatek’s standards up and we are investing in higher
level international marketing, website expertise and
management procedures.”
What do you think are the advantages and
opportunities for Tarsus by working with Turkish
exhibition experts like SADA?
“I believe Tarsus is a very well defined international
investor. By this I mean the way Tarsus acquires and
manages exhibitions worldwide is well known and very
successful. By owning SADA shares Tarsus has cemented
its position in Turkey as an international exhibition
company owner, owning well-established flagship
exhibitions run by strong local teams.”
What opportunities do you foresee for the exhibition
industry outside of Istanbul?
“Turkey will become the exhibition hub that a lot of
international exhibition companies foresaw a decade
ago. Istanbul is a huge city with a lot of attractions, but
the city is crowded and the infrastructure could be
improved. Certain exhibitions have already moved out
from Istanbul, Komatek being one, and there are other
cities in Turkey like Ankara, Izmir, Antalya and Konya
seeking to attract organisers. When proper infrastructure
investment in these cities is completed I believe that at
least half of the major exhibitions will take place outside
Istanbul.”
How do you see the Komatek brand developing over
the next five years?
“Komatek is already an international brand and has the
potential of being the world’s fourth largest and Europe’s
second largest space-occupying construction machinery
exhibition. In this sector the world seems to be divided
into geographical regions where there is one leading
event. Komatek is the leading event in Eastern Europe
and Russia and should get larger as new venues are built
in Turkey that accommodate big outdoor events.”
LOOKING AHEAD
Of Tarsus’ existing brands, there will be 2016 editions
of Zuchex, Ideal Homex, Sign, Yapi Decoor, REW, Flower
Show Turkey, ISG Eurasia and SecuriTex. Forward
bookings for these events remain in line with the
Group’s expectations.
Tarsus Group plc 21
Strategic Report - Emerging Markets
SOUTHEAST ASIA
Southeast Asia offers excellent
strategic opportunities for
businesses looking beyond the
traditional BRIC nations (Brazil,
Russia, India, China) and is a
region where economic growth
and development are predicted to
surpass the global average.
KEY FACT :
THROUGH AMB GROUP ACQUISITION,
TARSUS NOW HOLDS EVENTS IN
CAMBODIA, MALAYSIA, MYANMAR, THE
PHILIPPINES, SRI LANKA AND VIETNAM
22 Tarsus Group plc
ASEAN’s Free Trade Agreement combined with its
wealth of natural resources, low-cost skilled workforce
and growing middle class ensure the region offers
dynamic and vibrant opportunities for commercial
growth.
Tarsus has predominantly focused the core of its
business interests in Indonesia since 2013 by acquiring
PT Infrastructure Asia (PTIA) and partnering with
Dyandra Promosindo.
LOOKING BACK – REGIONAL HIGHLIGHTS
In July the Group significantly strengthened its portfolio
and growth prospects in the region by acquiring a 50%
share of AMB Group. Established in 1996, the AMB
Group is a leading Southeast Asian exhibition organiser
with a major presence in Malaysia, Myanmar and
Cambodia and a growing business in the region. It has
built up a portfolio of market leading exhibitions and
conferences in some of Tarsus’ key strategic sectors
with the largest focused on building, infrastructure,
automotive and food processing.
AMB Group has enjoyed strong growth in recent
years, driven by the establishment of leading events
in Myanmar and Cambodia - MyanFood and Cambuild
respectively. The partnership adds significant scale
and presence across Southeast Asia, building on
Tarsus’ existing successful assets in Indonesia - PT
Infrastructure Asia and the replication of two Tarsus
brands, GESS Indonesia and Table and Home
Indonesia. 2015’s events performed well and looking
ahead, Tarsus intends to scale up AMB’s existing events
and launch new exhibitions in its existing markets.
EDUCATION - Indonesia has come a long way since
SCALING GROWTH AND COMMERCIAL
OPPORTUNITIES THROUGH LOCAL EXPERTISE
1973 when 20% of its youth were illiterate. Now only 2%
of those aged between 15 and 24 are unable to read.
With a growing young population where the median age
is 27, Indonesia has shown its commitment to schooling
by dedicating 20% of its annual budget to education.
Indonesia is now in the second stage of its long-term
development plan, which is focused on improving
the quality of human resources, the development of
science and technology and strengthening economic
competitiveness.
The inaugural GESS Indonesia was held in October in
Jakarta and organised in conjunction with PTIA. The threeday show featured 3,749 buyers from 29 countries and
over 100 exhibitors.
INDUSTRIAL - Tarsus’ annual Indonesia Infrastructure
Week (IIW) brings together infrastructure related
exhibitions, conferences and seminars with the aim
to accelerate infrastructure development across
Indonesia. It offers an unprecedented opportunity
for the infrastructure, construction and technology
community to come together and build/strengthen
existing partnerships between the public and private
sector from Indonesia and abroad.
IIW 2015 brought together 266 exhibitors and 13,620
participants from all sectors of critical infrastructure
in three highly successful days of business. One
in four visitors were responsible for investment or
procurement and between them concluded deals
worth over USD $9 billion during the event.
The Big 5 Construct Indonesia event debuted in May
in Jakarta to cater for the international building and
construction sector. It was co-organised with dmg
events, the organiser of the Big 5 series of events - the
Middle East’s largest construction event in Dubai and
events in Saudi Arabia, Kuwait and India. The brand
brings the international building and construction
world together in a single location providing a valuable
meeting place to source products, conduct business
and build strategic partnerships. It showcased new and
innovative products to the Indonesia market for the
first time and recorded exhibitors from 26 countries
and 5,775 buyers.
LOOKING AHEAD
The acquisition of 50% of AMB has substantially
widened the Group’s geographic coverage in South
East Asia. Strong performances and continued growth
in buyer numbers is expected from events being held
in Malaysia, Myanmar, Cambodia and the Philippines
in addition to the Group’s Indonesian base. IIICE is
also expected to track ahead of 2015 benefiting from
continued investment in marketing helping to drive
strong buyer attendance in a fast growing market.
Q&A with Alan
Solowiejczyk, CEO of PTIA
What benefits for PTIA
have you noticed by
partnering with Tarsus?
“The Tarsus partnership
has been impactful from
the offset, but three areas
stand out.”
“Firstly, I’ve valued Tarsus’ respect for me as an
entrepreneur. Tarsus has shied away from trying to
impose their own corporate culture; instead they have
enabled me to continue to lead and run PTIA, whilst
providing me with the right strategic and practical support
to achieve growth. I think my very good relationship with
Douglas Emslie has been critical in this.”
“Secondly, Tarsus has spent time understanding me, my
business and my team. This shared understanding has
afforded us the opportunity to successfully deliver two
new launch events in 2015, as well as expand our core
infrastructure event to a stage where the 2016 event is
forecast to sell out the current venue, so necessitating a
move to a larger venue in 2017. Tarsus’ ability to cultivate
an international community has been instrumental to this.”
“Finally, whilst Tarsus has been careful not to upset the
entrepreneurial spirit of PTIA and impose its own will,
it has invested resources into upskilling my team and
transferring best practice. Marketing communications,
conference production and sales performance are areas
where Tarsus has already positively impacted.”
What do you think are the advantages and
opportunities for Tarsus by working with
Indonesian exhibition experts like PTIA?
“Many of Tarsus’ competitors continue to lose money
in events in Indonesia, especially within sectors that we
operate in. The material difference between Tarsus’
experience and others has been driven by PTIA’s expertise
in understanding the needs of the local public and
private sectors, and then working closely in partnership
with them. Tarsus’ success is underpinned by our
understanding of Indonesian business culture and our
personal relationships with all our stakeholders.”
How crucial is local industry knowledge and
expertise in geo-adapting a brand into a new
region?
“Adapt is the critical descriptor in geo-adapting.
Opportunities abound for international trade shows in
most key global industry segments in Indonesia. However,
there are plenty of examples of leading trade show brands
which have tried and failed here, mostly because they
forgot to start by listening to local needs and opinions.”
What opportunities do you foresee for the
exhibition industry in Indonesia over the next few
years?
“Increased venue capacity will certainly lead to greater
competition for incumbent events. This will only speed up
the continued professionalisation and internationalisation
of the Indonesian B2B trade show industry. For PTIA, we
have a huge opportunity to continue to lead and partner
with the Indonesian infrastructure community, and
expand the topic into new and exciting adjacencies.”
Tarsus Group plc 23
Strategic Report - Emerging Markets
MEXICO
With the US to the north and Latin
America to the south, Mexico is
perfectly placed for cross border
trade.
KEY FACT :
THE MOST SUCCESSFUL EVER EDITION
OF LABEL SUMMIT LATIN AMERICA
WAS HELD WITH 1,080 BUYERS
As part of the world’s largest free trade
agreement, Mexico offers an attractive business
environment to overseas investors. Advances in its
infrastructure, a growing middle class and rapidly
declining poverty rates lead forecasters to predict
that Mexico will enjoy a higher GDP per capita than
all but three European countries by 2050.
24 Tarsus Group plc
Tarsus has staged events in Mexico since 2004 when the
first Label Summit Latin America was first held in Mexico
City.
In December 2013, Tarsus and EJ. Krause & Associates
(EJK) formed a strategic partnership to expand into
emerging markets with the Group acquiring a 50%
interest in two major exhibitions owned by EJK. The two
events in the joint venture were Plastimagen Mexico,
the leading exhibition for the plastics industry in Latin
America and Expo Manufactura, Mexico’s premiere
manufacturing event. In addition it was agreed that the
joint venture would launch a number of its key brands
into the Mexican market.
LOOKING BACK – REGIONAL HIGHLIGHTS
EDUCATION - The Group launched its Global Education
Supplies & Solutions Exhibition (GESS) brand in Mexico
City in April. Quality education plays a key role in the
economic development of any nation and is one of
the key forces in enabling growth. Mexico’s national
education system currently serves 35 million children
and President Enrique Peña Nieto’s government
allocated a record investment of over $47 billion for
education in 2014. Working alongside EJK, this was the
first of two planned replications for the GESS brand
globally during 2015.
The event brought together leading international
suppliers and local companies to showcase the best in
educational supplies. 2,294 educational professionals
from 21 countries attended, while the show featured
100 exhibitors and brands from 15 different countries.
INDUSTRIAL - Expo Manufactura (EM) held its 19th
edition in February. Representing 60% of foreign direct
SUCCESSFUL GEO-ADAPTION
investment, the manufacturing industry has emerged
as one of the country’s most important sectors;
attracting major investment and creating employment
opportunities.
Regarded as the country’s leading business forum, EM
presents cutting edge technologies such as machinery,
robotics and precision engineering systems for
sectors including metal working, automotive, medical
manufacturing, automation and industrial printing/3D.
Organised in partnership with EJK, the 2015 event
enjoyed continued success with 328 exhibitors and
10,607 buyers.
2015
Exhibitors100
Countries exhibiting
15
Visitors2,294
Countries visiting
21
Q&A with Matt Thompson, Event Director – GESS, Tarsus
Group.
Why was Mexico chosen for the GESS ‘replication’?
“Mexico’s national education system is currently enjoying a
record investment so the launch of GESS Mexico was very
timely and represents a unique opportunity.”
What have been the major obstacles in launching
the GESS brand into the Mexican market?
“GESS is a well-known event amongst the education
supplier community and we already benefit from a strong
network of internationally recognised speakers. The
main obstacle that we faced in launching the show was
on the buyer recruitment side, where we had little or no
penetration when we started out. We needed to source
data, identify and work with key associations, and engage
with the main media for this sector.”
How instrumental has the working relationship with
EJ Krause been in delivering a successful event?
Co-located alongside Expo Manufactura, Industrial
Print Expo debuted in 2015. Bringing together
domestic and international companies from 3D,
screen, speciality, digital, laser and inkjet printing, this
new expo aims to establish itself as the only Latin
American event presenting innovative print technology
used in the manufacturing of industrial and consumer
goods. Its second edition was scheduled for February
2016.
LABELS & PACKAGE PRINTING - The 12th edition
of Label Summit Latin America was held in April with
a record attendance level. Designed to showcase the
latest trends and solutions for businesses to drive
profit and best practice, the Summit, held in Mexico
City attracted 1,080 buyers and over 80 Mexican and
international exhibitors.
LOOKING AHEAD
Forward bookings remain in line with expectations
for 2016’s events including GESS Mexico, Expo
Manufactura, Industrial Print Expo and Plastimagen.
New replication AAITF Mexico is scheduled to take
place in June 2016.
“It was our close collaboration with the EJK team that helped
us overcome the obstacle regarding visitor promotion. As
the brand owner, the Tarsus team drove the strategy and
direction of the show, whilst the EJK team were dynamic
and determined when engaging with the local education
community. The inaugural GESS Mexico was an outstanding
success, attracting over 2,000 buyers, 100 exhibitors and
more than 60 speakers. Such a result could not have been
achieved without the “on the ground support” of EJK.”
How has the GESS brand been specifically adapted
to suit/work in the Mexican market?
“GESS Mexico was a replication of its mother brand in
Dubai in terms of profile, structure and format. The target
audience for exhibitors, buyers and speakers was broadly
the same but we consulted with the industry to make sure
that GESS covered topics that held resonance to Mexico
specifically – ranging from a focus on vocational training
in order to bridge the skills gap, through to niche topics
such as a need to increase the quality of education and
performance in regions of indigenous communities.”
What are the plans to enhance or extend the GESS
brand in Mexico and beyond?
Our aim is to build a show that becomes recognised as the
annual meeting place for educators across Mexico. We are
very pleased to have recently announced a collaboration
with the Virtual Educa Foundation, an initiative of the
Organization of American States which will help develop
our institutional and academic programme.”
Tarsus Group plc 25
3D Printshow New York 2015
26 Tarsus Group plc
30%
Percentage of Group revenue generated
from the United States in 2015
2015 20142013
(£m)
Biennial revenue
-
5.1
-
Annual revenue
25.4
19.5
18.7
Total revenue
25.4
24.6
18.7
Adjusted profit before tax
11.4
11.7
8.8
united states
Tarsus has broadened its portfolio by adding new
events to its clothing and medical portfolios to
capitalise on the growth the US market offers.
Strategic Report
united states
The United States remains the world’s
biggest single market for exhibitions
where few sectors are not represented.
The market overall continues to show
impressive growth and exposure to
this dynamic is a must for any serious
exhibition operator.
Tarsus has been active in the North American
exhibition and publishing industry since being
founded in 1998. Starting with the Labelexpo
brand which was launched in 1989, Tarsus
increased its interests there by acquiring OFFPRICE
in 1999 with additional acquisitions of TSNN in
2000, its initial Medical business in 2006 and
CMHC in 2014 and PAINWEEK in 2015
KEY FACT :
OUR MEDICAL BUSINESS NOW
COVERS ANTI-AGING, DERMATOLOGY
AND THE FOUR MAIN SECTORS
OF US PREVENTATIVE MEDICINE
– NEUROLOGY, ENDOCRINOLOGY,
CARDIOVASCULAR AND ONCOLOGY
28 Tarsus Group plc
LOOKING BACK – REGIONAL HIGHLIGHTS
CLOTHING - Consumer appetite for discounted
fashion shows no sign of slowing down as retailers
seek new and innovative ways to remain competitive.
The off-price business model has been the answer for
some of the country’s largest retailers. From apparel to
footwear, accessories to jewellery, available for 20%70% below the wholesale price, it is easy to see why so
many make the OFFPRICE Show a must-see. First held
in 1995, the biannual discount clothing and accessories
event had just 24 exhibitors at its first edition but has
grown significantly under Tarsus’s ownership.
Holding two editions during Fashion Week in February
and August in Las Vegas, the show again continued
its trend of steady growth producing another robust
performance. Two further successful smaller OFFPRICE
Show events were held in New York and for the first
time in Miami.
INDUSTRIAL - The 3D Printshow a successful edition
in Pasadena. With 3D printing technology transforming
design and manufacturing, the 3D Printshow has
been rebranded as the Additive Manufacturing Show
with strategic focus going forward placed on the
medical, automotive and aerospace sectors. Additive
Manufacturing Americas is due to take place in
Pasadena in December 2016.
MEDICAL - The Group has continued the work it
started in 2014 to reposition its Medical Division.
Following the acquisitions of the Cardiometabolic
Health Congress (CMHC) and South Beach Symposium
in 2014, the addition of PAINWeek in 2015 to the
division has extended Tarsus’ reach to cover all four
pillars of preventative medicine. This, alongside the
launch of the Metabolic Medical Institute and the
restructuring of its educational offering, means the
Group now reaches a significantly higher percentage
of the mainstream medical market and is well placed
for future growth. The Medical Division’s established
education business - while performing satisfactorily now represents less than 25% of the overall Medical
portfolio.
Q&A with Douglas Emslie, Tarsus Group Managing
Director
Future growth is expected to be achieved through
a combination of launching new events across
the different therapeutic areas combined with an
educational offering that will increasingly target the
mainstream medical market.
“The medical market has moved away from being disease
based to preventative with consumers being more
interested and proactive in managing their health and
wellness. Our products cater to this need and recognise
the market is in transition.”
The South Beach Symposium was held in February
under the Group’s ownership for the first time.
Focused on all aspects of dermatology, this annual
event was held in Miami and hosted 535 buyers.
The first edition of PAINWeek was run under the
Group’s ownership since acquiring it in May 2015.
Held in September in Las Vegas, it is the nation’s
largest pain conference for frontline clinicians with
an interest in pain management and attracted 2,212
medical professionals including physicians, nurses,
pharmacists, dentists, psychologists and social
workers. The Group also organised a series of regional
PAINWEEKEnd conferences across Northern America.
The 10th edition of CMHC was held in Boston
during October. 963 clinicians attended the annual
event which consists of an exhibition, symposia
and workshops to highlight the latest techniques to
reduce cardiometabolic risk. The congress was also
complemented by a new Best of the CMHC Regional
Conference Series which saw events held in Atlanta,
Dallas and Las Vegas.
The year closed with thousands of medical
practitioners attending the 23rd Annual World
Congress in Anti-Aging Medicine which was held in
Las Vegas. Proving to be the largest event the medical
division has hosted to date, the congress featured
more than 325 exhibitors, 100 speakers and 5,200
buyers.
LOOKING AHEAD
Work will continue to reposition the Medical Division
to better address the larger mainstream medical
market. Forward bookings for 2016’s events including
Labelexpo Americas, OFFPRICE, CMHC, South Beach
Symposium and PAINWeek remain in line with the
Board’s expectation, with strong growth expected
from the Group’s larger medical events and online
educational revenues.
Why is the Medical Division focussed on preventative
medicine?
Why is the Medical Division being reshaped in the way
it is?
“We have reshaped the Medical Division to fully leverage
and better capitalise on the growth opportunities these
particular areas of medical expertise offer as they are
still developing. The acquisition of PAINWeek in mid2015 complemented our existing medical businesses
and enables us to now address all four pillars of the
preventative medical market. For example we see a
number of opportunities for us to expand the PAINWeek
brand and to cross-promote our other medical events.”
How will growth be achieved?
“Growth will be achieved in a number of ways. One
is by organic growth which can be achieved through
event replication. We have already experienced a strong
performance during 2015 by holding three additional
events in the US in Atlanta, Dallas and Las Vegas which
were bolt-ons to our Boston-based Cardiometabolic Health
Congress. Other initiatives for driving further growth include
building on the model successfully employed by CMHC,
whereby the division is establishing a central team focussed
on obtaining educational grants from pharmaceutical
companies to develop an additional revenue stream across
the other business units. We have also launched a new
medical technology event, Medtech Impact, the first edition
of which is due to be held in December 2016.”
Tarsus has made a number of strategic acquisitions
over recent years, not least in the medical division.
What are the key factors in making an acquisition
successful and can deliver growth?
“The quality of our assets which address markets in
transition and the geographical positioning of our
portfolio, targeted at faster-growing economies, is a key
differentiator for the Group. I think that many of our
own strategic acquisitions, such as the South Beach
Symposium, PAINWeek and Cardiometabolic Health
Congress, have been aided by the attractiveness of the
Group’s entrepreneurial culture to the equally innovative
vendors of those businesses we have acquired.”
“Tarsus’ size, flexibility and willingness to work with
vendors to develop their businesses in partnership with
the Group is becoming increasingly appealing to partners
and it helps accelerate the Group’s overall strategy. The
entrepreneurial culture we have in which to further
expand their business has enabled us to capture attractive
strategic opportunities in the emerging markets we’ve
chosen where commercial growth is solid and sustainable.”
Tarsus Group plc 29
Labelexpo Europe 2015
30 Tarsus Group plc
20%
Percentage of Group revenue generated
by Europe in 2015
(£m)
2015 20142013
Biennial revenue
10.5
-
9.0
Annual revenue
7.4
12.3
11.1
Total revenue
17.9
12.3
20.1
Adjusted profit before tax
4.1
1.2
4.8
EUROPE
Success continues for our flagship brand –
Labelexpo Europe - while we have consolidated
our 3D business to deliver the largest European
trade event for this sector.
Strategic Report
europe
In line with our ‘Quickening the
Pace’ strategy, the Group’s business
has been increasingly focused
on selective Emerging Markets
to reduce exposure to the slower
growing European markets.
KEY FACT :
LABELEXPO EUROPE CELEBRATED
ITS 35TH ANNIVERSARY WITH
ITS LARGEST EVER SHOW FLOOR
AND HIGHEST EVER BUYER AND
EXHIBITOR NUMBERS.
32 Tarsus Group plc
LOOKING BACK – REGIONAL HIGHLIGHTS
LABELS & PACKAGE PRINTING - The Group’s
second largest exhibition is Labelexpo Europe, which
is held biennially in Brussels. This is the world’s
leading label and package printing industry event.
Attracting a global audience, the show is aimed at
trade professionals including label printers, brand
owners and designers. Famous for its live heavy
machinery demonstrations it routinely attracts highlevel printing executives looking to invest significant
amounts in in new labelling equipment.
2015’s event celebrated its most successful ever
edition. Posting new buyer, exhibitor and exhibition
space records, its eight exhibition halls hosted 650
exhibitors. Despite being a long established show, the
label and package printing sector is enjoying strong
growth and the event drew 35,739 buyers - an increase
of 12% on 2013’s total with buyers coming from 146
countries. Labelexpo Europe also played host to the
12th annual Label Industry Global Awards ceremony.
EXHIBITIONS – AN EFFECTIVE ROUTE TO
MARKET AND CLOSING SALES
Celebrating its 35th anniversary, 2015’s show put a
more strategic emphasis on package printing. Offering
lucrative commercial opportunities to printers and
suppliers alike, package printing is now central to
the label printing community and overall Labelexpo
experience. With 53% of its total exhibitors showing
products for flexible packaging and 32% featuring
products for folding cartons, Labelexpo Europe has
now established itself as having the most extensive
showcase of package printing solutions available at
any tradeshow.
INDUSTRIAL - The 3D Printshow - which Tarsus
acquired in 2014 - returned with editions held in
London, Berlin, Madrid and Paris. Covering the
many facets of 3D printing/additive manufacturing,
the events featured content ranging from high-end
industry, business and automotive manufacturing to
medicine, fashion and art and design. With 3D printing
technology transforming design and manufacturing,
the 3D Printshow has been rebranded as the Additive
Manufacturing Show with strategic focus going
forward placed on the medical, automotive and
aerospace sectors. Additive Manufacturing Europe is
due to take place in Amsterdam in June 2016.
Q&A with Christian Menegon,
Worldwide Business Development
Manager, Labels and Packaging,
HP Indigo.
How important are trade
shows like Labelexpo Europe
in your overall marketing and
sales strategy?
“To be accurate, I have to separate my answer into two
parts: there is any show and then there is Labelexpo. We
are selling hardware, machines and heavy pieces of metal
to an industry which was born in such an environment
and still lives in it daily. Such machines cannot be sold via
the internet. The potential buyers have to see them, touch
them, evaluate them and compare with other suppliers.
There is nothing better than a show for that.”
“But there are many shows - too many other shows - and
as a supplier we cannot attend all of them. We need to
ensure a good ROI, a good time between two events (as
we need to bring something new and this cannot happen
annually) and a good attendance and promotion.”
“Labelexpo has all the tools around for that objective,
starting from the magazine, the PR activities, the summits
and the show’s geographic spread.”
What would be your primary route to market
if you did not use exhibitions to reach your
customers?
Open houses, for the same reason: show hardware, let the
prospect feel the heavy metal.
How does the Labelexpo team help you stand out
from the crowd in a busy market place?
“There is a long lasting relationship between us and the
Labelexpo team. What I appreciate most is the open
communication we have. We can agree, disagree, but we
talk openly and this makes things advance for both of us. A
question - we ask, an issue - we discuss, an idea - we share!
This can be informal, a phone call, an SMS or a face to face
meeting, but always in full respect of each other.”
How has your business benefited from exhibiting
at Labelexpo Europe over the years?
FRANCE - The Group sold its French business interests
in July. This included a broad portfolio of exhibitions and
conferences operating in sectors such as education,
marketing, IT and the events and meetings industry.
Its disposal has been core to the Group’s “Quickening
the Pace” strategy which is focused on the faster growing
economies of the emerging markets and the US.
OTHER BUSINESS SECTORS - Online Recruitment
(Onrec) magazine is for HR directors, personnel
managers, job boards and recruiters providing them
with information on the Internet recruitment industry.
During 2015, Onrec held several successful events
such as its annual exhibition and conference and
awards programme in the UK and Scandinavia.
“I guess the number of square metres we need says it
all! Over the years we’ve grown a lot, demanded more
and more, had to relocate from one hall to another. We
have the chance to be part of the leaders changing the
industry, and as such I suppose we’ve also contributed to
Labelexpo’s own development. If we continue to contribute
by bringing more people, we also help the industry to grow
somehow! For us the show has allowed us to introduce
new solutions, new platforms and to educate the market.
For sure a great additional sales aid.”
LOOKING AHEAD
Forward bookings for 2016 remain ahead on a likefor-like basis with key events including the first edition
of the rebranded Additive Manufacturing Europe in
Holland.
Tarsus Group plc 33
Governance
Corporate Social
Responsibility
CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS
As a global company, Tarsus is strongly committed
to corporate social responsibility (CSR) – to acting
responsibly, operating sustainably and contributing
to the communities in which we work and live. This
is a summary of some of the key activities that our
Corporate Social Responsibility Committee and
Group employees have taken part in this year.
Further information about the formal corporate social
responsibility policies of the group can be found in the
Directors Report and Corporate Governance Report.
SUSTAINABILITY AND ENVIRONMENTAL POLICIES
Tarsus is committed to ensuring its operations are
as environmentally friendly as possible, and has a
number of company-wide policies to achieve this,
including:
i) Keeping staff travel to a minimum and making active
use of alternative means of communication (e.g. video
conferencing etc) to reduce travel requirements and
reduce the Group’s overall carbon footprint where
possible;
ii) Discouraging the printing of emails and making
information available online in addition to in print to
reduce paper wastage; and
iii) Encouraging the development and use of Mobile
Apps at our events, which contain all show data to
reduce the volume of print event guides required.
CORPORATE CHARITY SUPPORT
Employees from Tarsus Group completed two
major charity challenges as part of the Events for
Namuwongo project, which has seen them cycle to
34 Tarsus Group plc
the summit of Mont Ventoux and complete a “Tough
Mudder” course.
sanitation, healthcare, education and more for
the community in Namuwongo.
The cycle to the top of Mont Ventoux, a mountain in
the Provence region of southern France and part of
the Tour de France cycling race. Mont Ventoux is the
largest mountain in the region and is known as the
‘Beast of Provence’, amongst other names.
Previous charity initiatives undertaken by the
Events for Namuwongo Tarsus team include the
Three Peaks Challenge and a London to Paris
bike ride.
Events for Namuwongo is a partnership of companies
and individuals from the events industry who have
come together to support a slum community on the
edge of Kampala, Ugandan. The initiative has the
aim of raising funds to provide free and clean water,
Tarsus Group plc 35
Group Structure
Board of directors
1.
2.
3.
4.
5.
6.
7.
EXECUTIVE DIRECTORS
1. Neville Buch (69) (Chairman) founded the
Group when it launched in 1998. He was previously
Executive Chairman of Blenheim Group plc, a leading
international exhibition, publishing and conference
company which was acquired by United Business
Media plc for £593 million in 1996.
2. Douglas Emslie (49) (Group Managing Director)
joined the Group when it launched in 1998 as Finance
Director, becoming Group Managing Director in 2000.
Prior to joining the Group he held senior management
positions at Blenheim Group plc and after its takeover,
United Business Media plc. He is past Chairman and
remains a Director of both the Association of Event
Organisers and the Events Industry Alliance. He is also
the first international board member of the US industry
trade body – SISO.
3. Dan O’Brien (48) (Group Finance Director) joined
the Group in July 2011. Since qualifying as a Chartered
Accountant with Deloitte in 1991 he has held the role
of CFO at TV production company Shine Group and
at the listed B2B publisher Huveaux plc. He also held
senior finance roles at Hanson plc, computer games
company Eidos and Digital Theatre.
36 Tarsus Group plc
NON-EXECUTIVE DIRECTORS
4. David Gilbertson (59) (Non-executive Director)
joined the Group in March 2014 as the Company’s
Senior Independent Director, Chairman of the
Remuneration Committee and a member of the
Nomination, Audit and Disclosure Committees.
Previously he was Chief Executive Officer of Emap
Limited and Informa plc and Chairman of Sigaria. He
is Chairman of Gambling Compliance, Green Power
Conferences, Old St Labs, Concerto Group as well as
an a non-executive director of Incisive Media.
5. Tim Haywood (52) (Non-executive Director) joined
the Board of Directors as a Non-Executive Director
in July 2014. He is Chairman of the Audit Committee
and a member of the Remuneration, Nomination
and Disclosure Committees. He is Group Finance
Director at Interserve plc and prior to that was Finance
Director of St Modwen Properties. Earlier roles include
Group Finance Director at Hagemeyer UK and senior
positions in Williams Holdings. Tim is a Fellow of the
Institute of Chartered Accountants in England and
Wales and a member of its Sustainability Board. He is
also a member of the Enterprise Leadership Team of
Business in the Community.
6. Robert Ware (61) (Non-executive Director) joined
the group in February 2000. He was a director of MEPC
Limited (“MEPC”) until June 2003. Initially Corporate
Development Director, he was appointed Deputy Chief
Executive in May 1999. In 2003 he left MEPC and listed
The Conygar Investment Company PLC, an AIM-Listed
company of which he is the Chief Executive. He is also
Chairman of the Marwyn Value Investors Limited, Terra
Catalyst Fund and Marwyn Management Partners
Limited.
COMPANY SECRETARY
7. Simon Smith (40) (Group Company Secretary and
Head of Corporate Affairs) was appointed Company
Secretary of the Company on 3 November 2009. An
Associate of the Institute of Chartered Secretaries
and Administrators he has previously held company
secretarial positions at PartyGaming plc, Associated
British Foods plc, BG Group plc and KPMG.
GOVERNANCE – DIRECTORS’ REPORT
The Directors present the Directors’ Report and the audited financial statements for the year ended 31 December
2015.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The Group operates as an integrated media group primarily engaged in exhibitions, but with associated conferences,
publishing, education and internet activities. The principal activity of the Company is the holding of investments.
A review of the Group’s business model, strategy and prospects is set out in the Strategic Report on pages 2 to 33
(which forms part of the Directors’ Report) and incorporates the Chairman’s and Group Managing Director’s Statement
on pages 8 to 11 and the Financial Review on pages 12 to 13.
The board confirms that the annual report and accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the performance, strategy and business model of the
Group.
RESULTS AND DIVIDENDS
The results for the year are set out in the Consolidated Income Statement on page 77. During the year the Group made
a profit after tax of £15.5 million (2014: £6.8 million).
Subject to the approval of shareholders at the Annual General Meeting, to be held on 20 June 2016, the Board
proposes to pay a final dividend of 5.9p per share (2014: 5.4p per share) on 8 July 2016 to shareholders on the register
as at 29 May 2016.
The Company has in place a Dividend Access Plan (“DAP”) and has engaged a trustee to receive dividends on behalf
of shareholders who have elected for the trustee to do so under the rules of the DAP. This allows shareholders to
choose whether to receive their cash dividends from a UK source (from Tarsus Group Limited), as opposed to an Irish
source (i.e., the Company). As an alternative to the DAP, shareholders may choose to receive their dividends as a scrip
issue in new ordinary shares. The directors are empowered by ordinary resolution of the Company to offer this scrip
alternative pursuant to Article 138 of the Company’s Articles of Association, with the current authority expiring at the
end of the Annual General Meeting held in 2017. Due to the timing of dividend payments a resolution to renew this
authority will be proposed for consideration by shareholders at the 2016 Annual General Meeting.
Full details of any scrip dividend alternative will be sent to shareholders, together with Forms of Election or Statements
of Entitlement (as appropriate), in a separate circular in due course.
DIRECTORS
The following directors held office in respect of the Company throughout the year:
Executive Directors
Neville Buch
Douglas Emslie
Dan O’Brien
Hugh Scrimgeour
INDEPENDENT NON-EXECUTIVE DIRECTORS
Robert Ware
David Gilbertson
Tim Haywood
Appointed
3 October 2008
12 September 2008
4 July 2011
3 October
Resigned
31 January 2015
3 October 2008
5 March 2014
31 July 2014
The biographies of the directors in office when these financial statements were approved are shown on page 36.
Tarsus Group plc 37
GOVERNANCE – DIRECTORS’ REPORT
SHARE CAPITAL
As at 31 December 2015, the Company had 101,829,084 ordinary shares in issue and admitted to the Official List of
the UK Listing Authority and to trading on the main market of the London Stock Exchange.
On 15 January 2016, the Company issued and allotted 6,194 ordinary shares to satisfy valid elections under the
Company’s scrip dividend alternative.
As at 2 March 2016, the Company had an authorised share capital of 120,000,002 ordinary shares of 5 pence each
(£6,000,000.10), of which 101,835,278 ordinary shares are in issue and admitted to the Official List of the UK Listing
Authority and to trading on the main market of the London Stock Exchange. Each ordinary share carries the right to
one vote and there are no shares held in treasury. The total number of voting rights in the Company as at 2 March
2016 was therefore 101,835,278.
Details and explanations of the movement in the Company’s issued share capital during the financial year ended 31
December 2015 are shown on page 106.
The Company announced on 8 March 2010 that it had agreed terms to acquire the remaining 20% interest in MCI
Opco, LLC (“MCI”) that it did not already own from Dr Robert Goldman and Dr Ronald Klatz (the “Vendors”) for a
consideration of US$10.75m (the “Acquisition”). The Company issued 5,820,878 ordinary shares of 5 pence each (the
“Consideration Shares”) to the Vendors under the terms of the Acquisition. In accordance with the terms of the
Acquisition, the Company, Neville Buch, Douglas Emslie and the Vendors entered into a lock-in undertaking which
provides that, subject to certain exceptions, neither of the Vendors will sell their interest in the Consideration Shares
unless either Neville Buch or Douglas Emslie (or both of them) have sold any of the ordinary shares held by them at
the date of the undertaking, whereupon each Vendor shall have the right to sell the same percentage of his holding
of Consideration Shares as is represented by the number of ordinary shares sold by Mr Buch or Mr Emslie to the
aggregate holding of ordinary shares of Mr Buch and Mr Emslie. The Vendors are also permitted to sell the
Consideration Shares in other limited circumstances, being: (i) to realise funds required to settle tax obligations arising
under the Acquisition or as a result of their receipt of additional ordinary shares as a result of their holding of
Consideration Shares (for example, as a result of a scrip dividend); (ii) following a change of control of the Company
where Neville Buch and Douglas Emslie cease to be members of the Board or executive level management; (iii) one
year following the date when both Neville Buch and Douglas Emslie cease to be members of the Board or executive
level management; (iv) by way of buy-back of ordinary shares by the Company to the extent that Neville Buch and
Douglas Emslie participate in such buy-back; (v) to family members, trusts and controlled companies; or (vi) to accept
a takeover offer. The lock-in undertaking will terminate upon the earlier of: (i) a change of control of the Company; (ii)
the bankruptcy, insolvency, liquidation or dissolution of the Company; (iii) when either or both of Mr Buch or Mr Emslie
have sold more than 50% of the ordinary shares held by them at the date of the undertaking; or (iv) if the Consideration
Shares held by the Vendors collectively represent less than 50% of the Consideration Shares allotted to them as
consideration for the Acquisition.
At the Annual General Meeting of the Company held on 22 June 2015, the Company was given authority to make
market purchases of up to 10,163,173 of its own ordinary shares. The Company did not make any purchases pursuant
to this authority prior to 31 December 2015. Accordingly, as at 31 December 2015, such authority remained in force
in relation to 10,163,173 ordinary shares in the capital of the Company.
At the Annual General Meeting of the Company held on 22 June 2015, the directors were generally and unconditionally
authorised to exercise all or any powers of the Company to allot equity securities (as defined in section 560 of the UK
Companies Act 2006, as if the Company were incorporated in England) to such persons, at such times and on such
terms as they think proper, up to a maximum nominal amount of £1,692,168.35 during the period from 22 June 2015
until the earlier of 22 September 2016 or the conclusion of the Annual General Meeting of the Company held to
approve the report and accounts of the Company for the financial year of the Company ending on 31 December
2015.
DIVIDEND WAIVER AND NON VOTING SHARES
As at 2 March 2016, of the ordinary shares in issue, 702,588 were held in employee benefit trusts in relation to awards
made under the Group’s Share Plans. The trustee of the employee benefit trusts has waived all dividend and voting
rights in respect of these shares. This waiver only subsists while the shares are held by the employee benefit trusts.
38 Tarsus Group plc
GOVERNANCE – DIRECTORS’ REPORT
SUBSTANTIAL SHAREHOLDINGS
As at 2 March 2016, the Company had been notified and/or was aware of the following notifiable holdings of voting
rights in accordance with Chapter 5 of the Financial Conduct Authority’s Disclosure Rules and Transparency Rules:
Hargreave Hale
AXA Framlington Investment Management
Neville Buch
Artemis Investment Management
Rathbone
Philip O’Donnell
JO Hambro Capital Management
Investec Asset Management
Standard Life Investments
Dr Robert Goldman
Dr Ronald Klatz
Henderson Global Investors
Percentage of
capital and voting rights
at 2 March 2015
10.24
9.26 8.75 7.12 6.45 5.36 5.06 4.04 3.58 3.18 3.18
3.12
Number of
Ordinary Shares
10,425,679
9,429,433
8,911,747
7,250,736
6,565,573
5,458,778
5,154,382
4,109,140
3,646,186
3,233,355
3,233,355
3,181,221
DIRECTORS’ SHARE INTERESTS
The interests of the directors in the Company’s ordinary shares (in respect of which transactions are notifiable under
the Financial Conduct Authority’s Disclosure Rules and Transparency Rules 3.1.2R) as at 1 January 2015 and 31
December 2015 are set out below:
Neville Buch
Douglas Emslie
Dan O’Brien
Robert Ware
David Gilbertson
Tim Haywood
Number of ordinary shares
at 1 January 2015
Number of ordinary shares
at 31 December 2015
8,891,251
1,022,396
67,436
301,585
10,000
–
8,911,747
1,133,494
137,233
250,000
10,000
4,509
The interests of the directors in the Company’s share plans are set out in the Remuneration Committee Report on
pages 66 to 67.
DONATIONS
During the year the Company made charitable donations of £20,877 (2014: £24,069). No political donations were
made (2014: £nil).
EMPLOYEES
Good communication with employees is regarded as an essential feature of the Group’s business culture. Employees
receive regular updates on corporate performance and developments through various formal and informal channels
of communication, including the Group’s website and internal intranet. The Group is committed to cultivating an
environment in which all staff feel empowered to make suggestions and provide feedback on the Company, its
performance and working conditions.
Employees are encouraged to become shareholders in the Company and a significant number participate in the
Group’s share plans, details of which are set out in the Remuneration Committee Report on pages 53 to 69.
Tarsus Group plc 39
GOVERNANCE – DIRECTORS’ REPORT
The Board believes there are many benefits to having a diverse workforce and we remain committed to ensuring that
this continues to be reflected in our recruitment policies. Applications for employment by disabled persons are always
fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming
disabled, every effort is made to ensure that their employment with the Group continues and that appropriate training
is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons
should, as far as practicable, be identical to that of other employees.
The Company seeks to employ a workforce which reflects the diverse community of our society irrespective of sex,
age, marital status, disability, sexual preference or orientation, race, colour, religion or ethnic or national origin. The
Company believes that all employees should be treated with dignity and respect and the Company endeavours to
provide a working environment free from discrimination, victimisation or harassment.
The Group tries to assist its employees to achieve an appropriate work/life balance, by measures including policies
on parental, maternity and paternity leave and flexible working, where appropriate.
CREDITOR PAYMENT POLICY
It is not the Company’s policy to follow any standard or code on payment practice. However, the Company agrees
payment terms with its suppliers on an individual basis and abides by those payment terms. Company creditor days
at the end of the year amounted to 24 (2014: 23). The Group creditor days at the end of the year amounted to 32
(2014: 65).
GOING CONCERN
A full description of the Group’s business activities, financial position, cash flows, liquidity position, committed facilities
and borrowing position, together with the factors likely to affect its future development and performance, is set out
in the Strategic Report, Financial statements and in the notes to the accounts.
Having reviewed the Company’s and the Group’s liquid resources, borrowing facilities, operating budgets and cash flow
forecasts, the directors believe that the Company and the Group have adequate resources to continue as a going
concern for the foreseeable future.
VIABILITY STATEMENT
The directors have assessed the viability of the Group over a three year period to December 2018, taking account of
the Group’s current position and the potential impact of the principal risks documented in the Audit Committee
Report. The choice of a 3 year period is aligned with the Board’s periodic strategic review and plan – it is also used by
the Remuneration Committee to set targets for the long term incentive plan.
The plan makes certain assumptions about the acceptable performance of the underlying portfolio of shows and the
availability of venues.
The directors’ assessment considered the resilience of the Group, taking account of its current position including
committed financing throughout the period, forward bookings, the principal risks facing the business in severe but
reasonable scenarios and the effectiveness of any mitigating actions. This assessment has considered the potential
impacts of these risks on the plan, including solvency and liquidity over the period – primarily through reducing
revenues and cash-flows in the plan. It has also taken account of the mitigating actions including withholding dividends
and reducing launch investments and capex.
Based on this assessment, the directors have a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period to December 2018.
40 Tarsus Group plc
GOVERNANCE – DIRECTORS’ REPORT
ANNUAL GENERAL MEETING
The Notice convening the Annual General Meeting, to be held at 11.00am on 20 June 2016 at The Writers Room,
Radisson Blu Hotel, Dublin Airport, Dublin 2, Ireland, is contained in a separate circular that will be sent out nearer to
the meeting. That circular will also detail the resolutions to be proposed at the Annual General Meeting.
AUDITOR’S NON-AUDIT FEES
Deloitte LLP are the Company’s auditors effective since 24 June 2013. Deloitte LLP performed non-audit services
during the year ended 31 December 2015. Their fees for this work were £55,000 (2014: £147,000).
It is the Group’s policy to separate tax advice from audit work (which is governed by different terms) and not to award
non-audit work to the auditors if this were thought likely to compromise their objectivity and independence.
DISCLOSURE OF INFORMATION TO AUDITORS
The directors who held office at the date of approval of this Directors’ Report confirm that, as far as each of them is
aware, there is no relevant information of which the Company’s auditors are unaware and that each director has
taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information
and to establish that the Company’s auditors are aware of that information.
AUDITORS
Deloitte LLP have indicated their willingness to continue in office and a resolution proposing that they be reappointed
will be proposed at the Annual General Meeting.
RELATED PARTY TRANSACTIONS AND POST BALANCE SHEET EVENTS
On 1 September 2015, the Company completed the sale of Tarsus France Holdings SAS, the Group’s French business
to Magellan VI SAS for a total consideration of €9.2 million (approximately £6.5 million). The disposal superseded the
earlier agreement to dispose of up to 18% of the Group’s French business to Romuald Gadrat.
There are no post balance sheet events that require disclosure by the Company.
By order of the Board
Simon Smith
Company Secretary
2 March 2016
Tarsus Group plc 41
GOVERNANCE – CORPORATE GOVERNANCE REPORT
UK CORPORATE GOVERNANCE CODE COMPLIANCE
With the exception of the relevant provisions in the Companies (Jersey) Law 1991, Jersey does not have a system of
corporate governance equivalent to that found in the UK. The Company, however, voluntarily complies with the
corporate governance requirements set out in the Financial Conduct Authority’s Disclosure Rules and Transparency
Rules and complies with the UK Corporate Governance Code published in September 2014 by the Financial Reporting
Council (the ‘Code’) which is publicly available at www.frc.org.uk.
Throughout the year to 31 December 2015, the Company has complied with all the Code’s principles. The explanation
of how the main principles have been applied is set out below and in the Board Committee Reports on pages 46 to
69.
BOARD OF DIRECTORS
The Board currently comprises three Executive Directors (including the Chairman) and three independent Nonexecutive Directors. In accordance with corporate governance best practice, the Board has resolved that all directors
of the Company will retire and offer themselves for re-election at the 2016 Annual General Meeting. A circular detailing
the resolutions to be proposed at the Annual General Meeting will be sent to shareholders in due course.
In accordance with the Code, the Company is headed by an effective Board, which is collectively responsible for the
success of the Company. The Board provides strong leadership whilst ensuring that a framework of prudent and
effective controls exists in order to assess and manage risk. The Board has adopted a formal schedule of matters
reserved to the Board, setting out those issues which must be referred to the Board for decision. The principal
responsibilities of the Board are to direct and approve the Company’s strategy, manage its portfolio of investments
and manage its relationship with the investment community and other stakeholders.
The Chairman, who holds 8.75% (2014: 8.78%) of the Company’s current issued share capital, is responsible for
management of the Board, for strategy (in conjunction with the Group Managing Director and the Board), for external
relations and for communication.
The Group Managing Director is responsible for the day-to-day running of the business. He also chairs an Executive
Management Committee comprising the senior executives that exercise managerial responsibility across the Group.
This committee is primarily concerned with operational issues, and reports to the Board via the Group Managing
Director.
The different roles of the Chairman and the Group Managing Director are defined and a responsibility statement in
respect of their roles has been agreed and adopted by the Board.
The terms and conditions of appointment of the Non-executive Directors are available for inspection at the registered
office of the Company during normal business hours and will be available at the Annual General Meeting on 20 June
2016 from 10.30am until the conclusion of the meeting.
In accordance with the Code, the Company has taken out directors’ and officers’ liability insurance in respect of any
potential legal action against the directors.
INDEPENDENT NON-EXECUTIVE DIRECTORS
The Board considers Robert Ware, David Gilbertson and Tim Haywood to be independent Non-executive Directors.
The Board views each of these Non-executive Directors to be independent of management, independent in judgement
and character and free from any business or other relationship which could materially interfere with the exercise of
their independent judgement.
David Gilbertson is the Senior Independent director and Chairman of the Remuneration Committee. He is also a
member of the Nomination, Audit and Disclosure Committees.
Tim Haywood is Chairman of the Audit Committee and a member of the Remuneration, Nomination and Disclosure
Committees.
42 Tarsus Group plc
GOVERNANCE – CORPORATE GOVERNANCE REPORT
The Board, when making its determination on the independence of Robert Ware, gave particular consideration to
the fact that he has been serving as a Director of Group companies for at least nine years (including the time he
served on the board of Tarsus Group Limited prior to the Group’s redomiciliation to Ireland). The Code suggests that
length of service of nine years or more is relevant to a determination of independence and that re-appointment
should be subject to rigorous review. The Board concluded that Robert Ware remains independent in judgement and
character, his commitment to the Company is undiminished and his performance continues to be effective.
The Board takes the view that the public company experience and independence of the Non-executive Directors is
such as to counterbalance any perceived concerns arising from the substantial shareholding of the Chairman. The
Board has consulted the Company’s major shareholders through the Company’s advisers and has established that
they regard the size of that shareholding as a strength of the Company rather than a matter for concern.
COMPANY SECRETARY
All directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that
Board procedures are observed and that the directors receive advice as to their duties as directors. The appointment
and removal of the Company Secretary is a matter for the Board as a whole. The Company Secretary is Simon Smith,
who was appointed on 3 November 2009. Elian Corporate Services (Jersey) Limited is appointed to act as Assistant
Company Secretary. A formal procedure exists whereby any director, in furtherance of his duties, may take
independent professional legal advice at the Company’s expense.
COMMITTEES OF THE BOARD
There are a number of standing Committees of the Board to which various matters are delegated. They all have formal
terms of reference approved by the Board, which are available on the Group’s website (www.tarsus.com). The reports
of the Committees are set out on pages 46 to 69.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS IN 2015
The Board meets no fewer than five times a year in Ireland. Details of the number of meetings and attendance records
are set out in the table below. The Chairman has also met with the Non-executive Directors without the other Executive
Directors present. Led by the Senior Independent Director, the Non-executive Directors have met without the
Chairman present.
Board
Neville Buch
Douglas Emslie
Dan O’Brien
Robert Ware
David Gilbertson
Tim Haywood
5/5
5/5
5/5
5/5
5/5
5/5
Audit
Committee
–
–
–
3/3
3/3
3/3
Remuneration
Committee
–
–
–
3/3
3/3
3/3
Nomination
Committee
2/2
–
–
2/2
2/2
2/2
BOARD EVALUATION
The directors have undertaken a formal and rigorous evaluation of their performance for the year ended 31 December
2015. During 2015, the Company Secretary circulated a questionnaire to each director that sought views on various
issues concerning the operation and effectiveness of the Board and each of the Board Committees, the effectiveness
of the Chairman, the Executive Directors and the Non-executive Directors. The evaluation sought to consider the
balance of skills, diversity, experience, independence and knowledge of the directors and explored how the Board
works as a unit. The results have been reviewed by the Board, led by the Chairman and discussed with individual
directors, except that the performance of the Chairman was reviewed by the Non-executive Directors, led by the
Senior Independent Director.
Tarsus Group plc 43
GOVERNANCE – CORPORATE GOVERNANCE REPORT
TRAINING AND DEVELOPMENT
An induction programme is arranged for newly appointed directors which includes papers and meetings on the
business, current strategy and shareholder expectations. Guidance is also given on the duties, responsibilities and
liabilities of a director of a listed company and key Board policies and procedures.
Directors have access to training as required and are encouraged to continue their own professional development
through attendance at seminars and briefings.
RELATIONS WITH SHAREHOLDERS
The Company regards it as normal to engage in a regular dialogue with its shareholders. The Chairman, the Group
Managing Director and the Group Finance Director have a full programme of meetings and consultations with the
Company’s major shareholders, both private and institutional, in which they regularly discuss strategy and governance,
including issues of remuneration. In turn, the Chairman ensures that the views of the major shareholders are
communicated to the whole Board. In the course of the year the majority of major shareholders were visited and
consulted.
All the Non-executive Directors have in past years attended capital market days and had discussions with analysts. All
the Non-executive Directors could, if they wished, attend other meetings with major shareholders, and would do so
if specifically requested by such shareholders. At present, the Non-executive Directors do not generally attend
meetings with the Company’s major shareholders. Where appropriate, major shareholders are offered the opportunity
to meet any new Non-executive Director. The Senior Independent Director is available to shareholders if they have
concerns for which contact through the Chairman or Group Managing Director is inappropriate.
The Company increasingly regards its websites as an important communication tool with shareholders as well as the
wider public.
RESTRICTIONS ON THE TRANSFER OF SHARES
There are no restrictions on the transfer of the ordinary shares, except where a holder refuses to comply with a notice
requesting details of parties who have a beneficial interest in a particular holding of shares, and the extent of their
interest. In such cases, where the identified shares make up 0.25% or more of the ordinary shares in issue, the
directors may refuse to register a transfer of any of the identified shares in certificated form and, so far as permitted
by the Uncertificated Securities Regulations 2001, a transfer of any of the identified shares which are held in CREST,
unless the directors are satisfied that they have been sold outright to an independent third party.
So far as the directors are aware, other than those disclosed in relation to the MCI Acquisition (on page 38 of this
report), there were no arrangements at 31 December 2015 by which, with the Company’s co-operation, financial rights
carried by securities are held by a person other than a holder of securities, nor any arrangements between holders
of securities which are known to the Company and which may result in restrictions on the transfer of securities or on
voting rights.
TAKEOVERS
The Group’s external bank facilities become repayable in the event of a takeover.
Other than noted above, there are no significant arrangements to which the Company is party that take effect, alter
or terminate upon a change of control of the Company following a takeover bid, nor any agreements between the
Company and its directors or employees providing for compensation for loss of office or employment (whether
through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.
44 Tarsus Group plc
GOVERNANCE – CORPORATE GOVERNANCE REPORT
CORPORATE SOCIAL RESPONSIBILITY
The Group is strongly committed to its customers, employees and shareholders and, in a wider context, to society at
large. The Board recognises that significant changes need to be made to the way we live and work to ensure that our
society and environment remain fully sustainable. Increasingly, companies must go beyond merely meeting minimum
legal requirements to consider the wider impacts of their businesses. To this end the Group has established a
Corporate Social Responsibility Committee, further information about which can be found on pages 34 to 35.
ANTI-CORRUPTION POLICY AND WHISTLEBLOWING
As part of Tarsus’ commitment to preventing bribery and establishing a culture that does not tolerate corruption
wherever and in whatever form it may be encountered, a formal anti-bribery and corruption policy and a
whistleblowing policy has been approved by the Board and appropriate procedures put in place.
Tarsus Group plc 45
GOVERNANCE – NOMINATION COMMITTEE REPORT
The Nomination Committee meets as required to deal with the recruitment of directors to the Board and to assess
directors’ roles and succession planning. The Committee comprises Neville Buch (Chairman), Robert Ware, David
Gilbertson and Tim Haywood. The Company Secretary acts as Secretary to the Committee.
The Nomination Committee evaluates the balance of skills, knowledge and experience on the Board and prepares a
description of the role and capabilities required for any particular appointment. It also reviews from time to time
succession plans for the key executive positions within the Group, including the arrangements which would apply in
cases of emergency. An independent Non-executive Director would chair the Nomination Committee if it were dealing
with the appointment of a successor to the Chairman.
The Committee met two times during the year. Its activities during the year included:
–
–
–
reviewing the succession planning for Executive Officers;
reviewing the balance of the Board and the roles of the Non-executive Directors; and
reviewing the balance of skills and experience on the Board and considering if any changes were necessary.
Neville Buch
Chairman of the Nomination Committee
2 March 2016
46 Tarsus Group plc
GOVERNANCE – AUDIT COMMITTEE REPORT
AUDIT COMMITTEE REPORT
The Audit Committee comprises the three independent Non-executive Directors (Tim Haywood (Chairman), Robert
Ware and David Gilbertson). The Board considers that Tim Haywood has the appropriate financial expertise, as
required by the Code.
Under the Code, the Board is required to establish formal and transparent arrangements for considering how it
should apply the required financial reporting and internal control principles and for maintaining an appropriate
relationship with the Company’s auditors, Deloitte LLP (“the Auditor”). The Finance Director generally attends meetings
of the Audit Committee, although the Committee also meets in his absence where appropriate. The Auditor also
attends when appropriate.
The Chairman of the Audit Committee will attend the Annual General Meeting of the Company on 20 June 2016 and
be available to answer any shareholders’ questions.
KEY RESPONSIBILITIES
•
•
•
•
•
•
Monitoring the integrity of the annual and interim financial statements, reports to shareholders and corporate
governance statements.
Making recommendations to the Board regarding the annual and interim financial statements.
Making recommendations to the Board on the appointment, retention and replacement of the Company’s
external auditors and assess the effectiveness of the Auditor.
Reviewing financial risks and monitoring the effectiveness of the Group’s internal controls.
Approving the internal and external audit plans.
Approval of the Auditor’s fees.
Following publication of the revised version of the Code, which applies to financial years commencing on or after 1
October 2014, the Board requested that the Committee advise whether it believes the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Company’s performance, business model and strategy. In accordance with the Code the
Committee provided the necessary advice to the Board.
KEY ACTIVITIES DURING THE PERIOD
•
•
•
•
•
•
•
The Committee reviewed the financial statements released by the Company, including the annual and interim
financial statements.
The Committee reviewed the financial trading updates, risks and financial controls, including the internal audit
reports prepared by internal audit and considered actions arising and mitigating steps.
The Committee reviewed actions against the assurance plan and monitored management actions recommended.
The Auditors, as part of its assurance process, confirmed that they are considered to be independent and
objective. The Committee agreed with this assessment and no matters of concern were raised. During the year
ended 31 December 2015, the Auditor presented its plans for the interim review and the year-end audit and the
Committee approved the scope of work to be undertaken.
During the course of the year, the Committee met with the Auditor without the presence of management.
The Committee reviewed, prior to their consideration by the Board, the representation letters to be given to the
Auditors in respect of the annual and half-year reports.
The Committee reviewed going concern and viability statement supporting calculations.
Tarsus Group plc 47
GOVERNANCE – AUDIT COMMITTEE REPORT
The Committee reviewed audit effectiveness following the audit of the 2014 annual report taking into account the
partners’ and senior audit staff’s understanding of the business, the effectiveness of the audit work in relation to
major issues and how those were addressed, the quality of suggested control improvements, the appropriateness of
assurance gained over parts of the Group not audited by the Auditor, the appropriateness and deployment of experts
on technical items, the quality and comprehensibility of the audit findings report and feedback from management on
the audit process generally.
•
•
•
•
The Committee received notification of any whistleblowing notifications and the progress and outcome in respect
of these.
The Committee reviewed its terms of reference and whether any changes needed to be proposed to the Board.
The Committee conducted an evaluation exercise to review its own effectiveness.
The Committee approved the Auditor’s fees.
GOVERNANCE
•
•
•
The Committee confirmed that it had complied with its terms of reference throughout the year.
The Committee reviewed its membership and confirmed that it complied with the Code.
The Committee confirmed that, in accordance with the provisions of the Code, Tim Haywood had recent and
relevant financial experience.
2016 ACTIVITIES
The key activities for the forthcoming financial year are:
•
•
•
continue the progress made to date around internal controls, assessment and internal audit follow up plans;
continue to ensure that accounting developments are communicated to, and applied by, the Committee in line
with best practice; and
assess the External Auditor’s effectiveness, which will be achieved by the Committee based on discussions with
those involved in the process.
AUDITOR’S INDEPENDENCE, OBJECTIVITY AND NON-AUDIT SERVICES
The Company’s policy on the Auditor’s independence is consistent with the ethical standards issued by the Audit
Practices Board in the UK. The Committee reviews independence on a regular basis.
This is designed to ensure that:
•
•
•
the Auditor does not act as a manager or employee of the Group;
there is separation between the interests of the Auditor and the Group; and
the Auditor is not required to act as an advocate for the Group.
The independence review is conducted by a review of compliance with policies in place in the Group and within the
Auditor to maintain independence and objectivity. The findings are shared with the Committee. The Committee, having
reviewed the report prepared by the Auditor on its relationships with the Group and the review by management, is
satisfied that the Auditor’s objectivity has not been impaired.
48 Tarsus Group plc
GOVERNANCE – AUDIT COMMITTEE REPORT
The Auditor is required to assess periodically that it, in its professional judgement, considers itself to be independent.
In particular, the Committee requires that details in respect of audit and non-audit services are provided to it to ensure
that the Group’s policy on the provision of non-audit services by the Auditor has been followed. The definition of nonaudit services adopted by the Committee complies with the ethical standards issued by the Audit Practices Board in
the UK. The Committee, having reviewed the activities during the reporting period, is satisfied that the policy remains
appropriate, has been complied with and that the Auditor remains independent. Details in respect of the non-audit
fees paid are in note 4 on page 92.
The Committee has primary responsibility for making recommendations to the Board on the independence and
reappointment of the Auditor.
The Auditor is required to adhere to audit partner rotation requirements, with the next review of the current audit
partner being due no later than the end of the 2020 audit process.
The Committee has satisfied itself that the UK professional and regulatory requirements for audit partner rotation have
been complied with. In light of the reviews undertaken and the satisfactory conclusions reached, the Committee has
recommended that Deloitte LLP be reappointed for a further year at the 2016 AGM.
SIGNIFICANT AND MATERIAL ISSUES
The Committee has considered a number of significant and material issues during the year, including:
•
•
•
•
•
•
•
the application of internal controls and how these were managed, trends and areas of potential financial risk.
Whilst the Committee does not consider there to be any material weaknesses in the internal controls process, it
considers that its review of internal controls is a priority item so as to ensure that a high standard is maintained
and that improvements are made incrementally as best practice evolves;
the impact of changes to regulation on the Company and how any changes would be implemented and
communicated. The Committee recognises that applicable regulations change and that there should be a process
for ensuring that these changes are monitored and appropriate practices adopted in a timely manner;
Tarsus operates a global portfolio of events, exhibitions, publications, websites and conferences. The Committee
reviewed the revenue recognition policies and ensured they were appropriate for Tarsus’ operations. The
Committee also reviewed controls undertaken to determine the completeness and accuracy of revenue
recognition and reporting for the portfolio. Revenue recognition was also covered in a paper by the Auditor and
reviewed with it as part of the year end process;
the carrying value of goodwill and other intangible assets on the balance sheet at the year-end was £127.1m
which included goodwill with a value of £101.6m. The Committee reviewed the management’s determination of
cash generating units and the key assumptions used, such as the discount rates and future cash flows, in the light
of current business performance and future projections and satisfied itself of the appropriateness of the
management’s impairment testing. As part of this review the impairment on the disposal of the French business
was considered;
the Committee reviewed the opening net asset position in respect of acquisitions and examined the fair value
adjustments, how the acquisition expenses had been charged to the income statement and the value of
intangibles recognised on acquisition and satisfied itself that these were appropriate;
as part of each venture into new territories the Committee is provided with a report on the processes and
procedures of the acquired entity, ensuring that key policies are adhered to, in particular the recognition of
revenue. The Committee monitors the integration of the new ventures into the Group’s reporting structure; and
being a multinational Group with tax affairs in many geographical locations makes the degree of estimation and
judgements more challenging. Any taxation issues that arise are dealt with on the advice of the Group’s tax
advisers, fully reviewed by the Committee.
The Committee has discussed with the Auditor the areas of significant risk identified by the Auditor (see pages 71 to
76) and has satisfied itself that such risks are being appropriately managed.
The Committee is satisfied that all issues and significant risks have been managed appropriately and in accordance
with the relevant accounting standards and principles.
Tarsus Group plc 49
GOVERNANCE – AUDIT COMMITTEE REPORT
RISK MANAGEMENT AND INTERNAL CONTROLS
The Board has overall responsibility for the Group’s systems of internal control. However, such systems are designed
to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable and
not absolute assurance against material misstatement or loss.
The Code requires that the directors review the effectiveness of the Group’s system of internal controls. This covers
all controls, including financial, operational and compliance controls, as well as risk management. The consideration
of issues of non-financial risk is an important aspect of the Group’s activity.
The risk management processes as required by the Turnbull Report were in place for the full year to 31 December
2015 and up to the date of approval of this report. The implementation of the requirements of the Turnbull Report
took the form of a continuing review of operational risks across the Group and prioritisation of those risks identified
for further action. This is carried out primarily at Executive Management Committee level and reported up to the
Board via the Group Managing Director.
The following are the main features of the internal financial control framework:
•
•
•
•
•
•
Financial reporting – there is a comprehensive budgeting system with an annual budget approved by the Board.
Monthly trading results, balance sheets and cash flow statements are reported against budget and updated
forecasts and are sent to the Executive Board. Sales reports are circulated to Executive Directors weekly and are
presented to the Board at each Board meeting.
Treasury management – the Board has approved a formal treasury policy for the Group. A treasury report and
a working capital report are presented at each board meeting. Weekly cash reports are sent to the Chairman
and the Group Managing Director.
Risk management – there is an ongoing process for identifying and reviewing the principal risks affecting the
Group’s businesses and evaluating their financial implications. Steps are taken where possible to mitigate or
manage the risks identified. This is carried out primarily at Executive Board level in conjunction with operating
company management and is reported up to the main board via the Group Managing Director. Insurance is coordinated centrally.
Central controls – formal delegated authorities are in place for all operating companies and a control
procedures document was in place for the entirety of 2015. As part of the year end process, each division is
required to confirm it is not aware of any breaches of the Group’s policies and procedures. This includes
declarations covering the Group’s anti-bribery and corruption policy.
Operating company systems – each operating company maintains financial controls and procedures
appropriate to its own business environment, whilst complying with overall Group standards and guidelines.
Internal audit – the Committee is responsible for monitoring, reviewing and assessing the role and effectiveness
of the internal audit reviews that are carried out. The Group Finance department carries out reviews of the
systems and procedures of all major operating companies and reports regularly to the Audit Committee and,
where appropriate, the Board. The necessity for a separate internal audit function is considered on an annual
basis. During 2015, BDO LLP were appointed to advise and support on certain aspects of internal audit. Their role
includes facilitation of a risk workshop and register review, development of an internal audit strategy and annual
internal audit plan. In 2016, they will also assist in developing the scope of each project and may provide audit
staff to assist in certain audits.
There are no material joint ventures or associates which do not apply the Group’s internal control systems.
The Board, through the Audit Committee, has reviewed the effectiveness of the Group’s system of internal control. No
significant failings were identified by the review.
50 Tarsus Group plc
GOVERNANCE – AUDIT COMMITTEE REPORT
KEY RISKS
The directors have identified below the principal risks and uncertainties relating to the Group’s business.
Tarsus’ events and exhibitions business may be adversely affected by incidents which curtail travel, such
as terrorist attacks, higher oil prices or health pandemics
Tarsus’ exhibitions businesses contribute in excess of 90% of the Group’s revenue. Visitors travel to these shows from
around the world. Any incident that curtails travel, such as terrorist attacks, may have an impact on the running of the
relevant event and may, therefore, affect reported revenues.
Expansion into new geographic regions subjects the Group to new operating risks
As a result of acquisitions and organic growth, the Group operates in many geographic regions such as China, India,
the United Arab Emirates, Turkey, South East Asia and Latin America. Whilst the Group conducts its business on a
global scale, growth in these regions presents logistical and management challenges due to different business cultures,
laws and languages. This may result in incremental operational risks for the Group.
The ability of the Company to implement and execute its strategic plans depends on its ability to attract
and retain the key management personnel required
The Group operates in a number of industry segments in which there is intense competition for experienced and
highly qualified individuals. The Group cannot predict the future availability of suitably experienced and qualified
people; it places significant emphasis on developing and retaining management talent. Accordingly, the Group has
implemented, and will continue to implement, a number of incentive schemes to attract and motivate key senior
managers. There can be no certainty that such retention policies and incentive plans will be successful in allowing the
Company to attract and retain the right calibre of key management personnel.
Fluctuations in exchange rates may affect the reported results
The Group is exposed to movements in foreign exchange rates against Sterling for trading transactions and the
translation of the net assets and income statements of overseas operations. The principal exposure is to the US Dollar
and Turkish Lira exchange rates, which form the basis of pricing for the Group’s customers.
Venue availability
Damage to or unavailability of a particular venue could impact specific events within the Group’s portfolio. The Group
also has key commercial relationships with venues which secure the Group’s rights to run its exhibitions in the future.
There are inherent risks and uncertainties in connection with the Group’s acquisition strategy
The Group will seek and effect appropriate acquisitions across various geographic regions, consequently exposing the
Company to inherent risks and uncertainties associated with such acquisitions. The risks associated with such a
strategy include the availability of suitable acquisitions, obtaining regulatory approval for any acquisition and
assimilating and integrating acquired companies into the Group. In addition, potential difficulties inherent in mergers
and acquisitions may adversely affect the results of an acquisition. These include delays in implementation or
unexpected costs or liabilities, as well as the risk of failing to realise operating benefits or synergies from completed
transactions. In addition, there can be no certainty that the benefits of acquisitions and strategic investments, including
synergies, increased cash flows and other operational benefits, will be realised.
Tarsus Group plc 51
GOVERNANCE – AUDIT COMMITTEE REPORT
Breaches of the Group’s data security systems or other unauthorised access to its databases,
intellectual property or information could adversely affect its businesses and operations
The Group has valuable databases and intellectual property and, as part of its businesses, provides its customers
with access to database information such as treatises, journals and publications as well as other data. There are
persons who may try to breach the Group’s data security systems or gain other unauthorised access to its databases
in order to misappropriate such information for potentially fraudulent purposes. Due to the rapid change in the nature
of these threats to the Group’s databases, intellectual property and other information, the Group may be unable to
anticipate or protect against the threat of breaches of data security or other unauthorised access. Such breaches
could damage the Group’s reputation and expose it to a risk of loss or litigation and possible liability, as well as increase
the likelihood of more extensive governmental regulation of these activities in a way that could adversely affect this
aspect of the Group’s business. Legal actions against the Group could have a material adverse effect on the Group’s
business, financial condition and results of operations.
Competition
The Group’s businesses operate in competitive markets, which continue to evolve in response to technological
innovations, legislative and regulatory changes, the entrance of new competitions and other factors. Whilst an event
or sectors in a market could have its prospects curtailed by these factors, the breadth of the Group’s portfolio, with
its geographic and sector diversity, reduces the risk to Tarsus’ overall business.
Tim Haywood
Chairman of the Audit Committee
2 March 2016
52 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
I am pleased to present the Directors’ Remuneration Report for the year ended 31 December 2015, which has been
prepared by the Remuneration Committee (the “Committee”) and approved by the Board of Directors.
The Committee believes it is essential that the Group’s remuneration policy is clearly aligned with the interests of
shareholders. The Committee’s focus is on continuing to ensure that the Group’s remuneration policy and components
of reward are appropriately positioned in the market to enable it to attract, retain and motivate the executive talent
required for delivery of its business strategy.
The Group delivered a record set of results in 2015 with Group like-for-like revenue up 10% per annum on a constant
currency basis and made significant strategic progress in line with its “Quickening the Pace” strategy. Group revenues
for the full year were £86.9m (2014: £60.6m), up 15% on a biennial basis (2013: £75.9m). Group adjusted profit before
tax was £26.3m (2014: £17.0m), up 9% on a biennial basis (2013: £24.2m) with adjusted earnings per share up 7%
on a biennial basis.
As a Jersey registered company, the Company is not subject to UK legislation. However, in light of the Company’s
listing on the London Stock Exchange, the Remuneration Committee reviewed its remuneration practices and
reporting in light of the UK Government’s new remuneration reporting reforms contained in the Enterprise and
Regulatory Reform Act 2013, which amend the Companies Act 2006 and the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013. This is the third year the Company is voluntarily
reporting in line with the aforementioned legislation.
The Committee is aware of the competitive pressures in its market and we are keen to retain the executive team for
at least the next five years. We are therefore updating the Remuneration Policy and asking shareholders to approve
the introduction of the Tarsus Group 2016 Executive Retention Plan (the “ERP”). This is a new long-term incentive
plan which will allow the Committee to make a one-off award of nil cost options to the executive team. The options
will vest after five years to the extent that challenging performance targets are met. A summary of the ERP can be
found in the Policy Report and details in the appendix to the notice of the 2016 Annual General Meeting. In line with
corporate governance best practice we are also taking this opportunity to implement clawback provisions into the
existing 2011 Long Term Incentive Plan and following feedback from shareholders we are removing the right to
guarantee a bonus in the first year in post of a new Executive Director. Additionally we are introducing shareholding
guidlines for Executive Directors whereby new Executive Directors are expected to build up a minimum of 100% of
basic salary in shares over five years.
The report is separated into two sections:
•
•
the first (pages 54 to 61) is the Policy Report, which sets out the existing policy which was approved by
shareholders at the Annual General Meeting on 23 June 2014. The introduction of the ERP along with the other
changes set out above, represent a change to the Remuneration Policy and the Committee is seeking
shareholders’ approval of the new policy at the AGM. If approved, the new policy will apply from the close of the
2016 AGM until the AGM in 2019, unless shareholders approve any changes before then; and
the second (pages 62 to 69) sets out the directors’ remuneration during 2015 and how the policy was
implemented in 2015. It also summarises how certain aspects of the policy will be implemented in 2016 (the
Annual Report on Remuneration).
This reporting format ensures that the components of reward, how they are linked to the business strategy and reward
opportunities, are clearly set out for each of the Executive Directors.
Resolutions to approve the Policy Report and the Annual Report on Remuneration will be put to shareholders at the
2016 Annual General Meeting.
David Gilbertson
Chairman of the Remuneration Committee
2 March 2016
Tarsus Group plc 53
GOVERNANCE – REMUNERATION committee REPORT
REMUNERATION POLICY REPORT
The Group operates a formal and transparent procedure for developing a policy on executive remuneration and for
fixing the total remuneration packages of individual Executive Directors. In establishing its remuneration policy, the
Committee gives full consideration to the provisions set out in the Code.
The objectives of the Committee in respect of the remuneration of the Executive Directors are to:
•
recruit, retain and motivate Executive Directors and senior executives of the highest calibre;
•
ensure that individual rewards and incentives are aligned with the performance of the Company and the interests
of shareholders.
•
ensure that performance-related elements of remuneration constitute a significant proportion of an Executive
Director’s remuneration package; and
Remuneration levels are designed so that no more is paid than is necessary to achieve the above objectives. The
Committee endeavours to remain sensitive to the wider scene, judging where to position the Group relative to other
companies (though using such comparisons with caution) and considering pay and conditions throughout the Group.
As regards the design of performance-related remuneration, the Committee gives attention to the provisions in
Schedule A to the Code (“The design of performance-related remuneration for Executive Directors”). It is an important
part of the Group’s pay policy, both at senior level and below, that a significant proportion of the overall remuneration
package should be performance-related, comprising bonuses and meaningful long term share incentive or option
packages.
There is a formal system for the appraisal of the Executive Directors. The Non-executive Directors, led by the Senior
Independent Director, are responsible for evaluating the performance of the Chairman, taking into account the
Executive Directors’ views.
The terms of reference of the Remuneration Committee are available on the Group’s website at www.tarsus.com or
on request from the Company Secretary at the Company’s registered office.
This section provides the Group’s remuneration policy for Directors. If it is approved by shareholders at the 2016
Annual General Meeting (AGM), it will supersede the policy approved at the 2014 AGM. The revised policy will apply
for three years from the date of the AGM.
Base salary
Purpose and link to
business strategy
Operation
Performance metrics
Opportunity
Benefits
Purpose and link to
business strategy
54 Tarsus Group plc
To provide core reward for the role.
Base salaries are normally reviewed on an annual basis or following a significant change in
responsibilities. They are paid monthly.
Salary levels and increases are determined based on a number of factors, including but not
limited to individual and business performance, level of experience, scope of responsibility
and peer group company analysis.
There is no maximum level. Base salary increases will be applied in line with the outcome of
an annual review by the Committee.
To aid recruitment and retention of high-quality executives.
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Operation
Performance metrics
Opportunity
Benefits may include:
Death in service payment
Family healthcare
Permanent health insurance
Travel insurance
Company car allowance
Technology to effectively carry out their duties
In the event a new Executive Director were to relocate from another country, additional
support may be provided, as set out in the recruitment and promotion arrangements on
pages 57 to 58.
Not applicable
Benefit values vary by role and are reviewed periodically.
Performance Bonus
Purpose and link to
business strategy
Operation
Performance metrics
To incentivise individual performance over a 12-month period based on a balanced scorecard
performance agreement as set out below.
Performance measures are based on a mix of financial profit targets and personal goals and
strategic objectives.
Performance measures for each of the Executive Directors are set out below:
Chairman, Group Managing Director and Group Finance Director:
50% of bonus potential – Group adjusted earnings per share
50% of bonus potential – personal goals and strategic targets
Threshold bonus opportunity is 0% and target bonus opportunity is 50% of maximum.
Operational Executive Directors:
40% of bonus potential – Group adjusted earnings per share
60% of bonus potential – personal goals and strategic targets
Threshold bonus opportunity is 0% and target bonus opportunity is 40% of maximum.
The Committee may vary the above weightings by an absolute +/–20% from year to year for
all Executive Directors.
The performance targets for these measures are set each year by the Committee in respect
of each Executive Director.
The payment of any bonus to any Executive Director is also subject to an overriding
achievement of an adjusted earnings per share target, whereby under this level no bonus
would be paid irrespective of whether personal goals and strategic targets are met.
Opportunity
The performance metrics have been chosen to ensure they align directors’ interests with
those of shareholders.
Maximum bonus potential is capped at:
110% of salary for the Group Managing Director
100% of salary for the other Executive Directors
Tarsus Group plc 55
GOVERNANCE – REMUNERATION COMMITTEE REPORT
An explanation of the bonus opportunity for the year ending 31 December 2015 is set out
in the Annual Report on Remuneration on page 65.
Tarsus Group plc 2011 Long Term Incentive Plan (the “2011 LTIP”)
Purpose and link to
business strategy
Operation
Performance metrics
Opportunity
To incentivise the delivery of sustained performance by Executive Directors over the longer
term.
Awards may be made annually as a percentage of base salary. Vesting is based on
performance measured over three years. The performance period normally starts on the
beginning of the financial year in which the grant is made.
Award levels and performance conditions are reviewed before each award cycle to ensure
they remain appropriate.
Dependent on adjusted Earnings Per Share (‘’EPS’’) assessed over rolling three-year
performance periods beginning with the year of grant. The performance criteria are based
on an adjusted EPS range whereby below a target level the award would lapse. The
Committee, when setting the performance criteria, takes account of the biennial nature of the
Group’s business. On-target performance would typically lead to a 40% vesting of the award.
Awards under the plan are capped at 200% of base salary each year.
The minimum award to Executive Directors is 0%.
The on-target awards are:
Clawback
Executive Chairman – 100%
Group Managing Director – 150%
Group Finance Director – 125%
Other Executive Directors and Officers – 100%
The Committee can clawback shares or options before vesting or for up to three years after
vesting in the event of financial irregularities or gross financial misconduct.
Tarsus Group 2016 Executive Retention Plan (the “ERP”)
Purpose and link to
business strategy
Operation
Performance metrics
Opportunity
Clawback
56 Tarsus Group plc
To lock in the executive team consisting of the Group Managing Director, the Group Finance
Director and the Group Company Secretary & Head of Corporate Affairs and reward them for
exceptional performance over the next five years.
A single award of nil cost options will be granted to each participant following shareholders’
approval of the ERP. Vesting is based on performance measured over the five financial years
2016-2020. To the extent that the performance targets are met, awards will vest on the fifth
anniversary of the date of grant and be exercisable until the tenth anniversary of the date of
grant.
An award will vest in respect of 30% of the shares provided that aggregate adjusted EPS over
the performance period is at least 95.8p; it will vest in full if aggregate adjusted EPS over the
performance period is 106.5p. Between these points, the awards will vest on a straight line
basis and nothing will vest if aggregate adjusted EPS is below 95.8p. In addition, vesting will
be subject to the Company paying an aggregate of 50p per share in dividends for the five
financial years 2016-2020.
The Group Managing Director will receive a nil cost option over 1,000,000 shares, the Group
Finance Director will receive a nil cost option over 330,000 shares and the Group Company
Secretary & Head of Corporate Affairs will receive a nil cost option over 170,000 shares.
The Committee can claw back shares or options before vesting or for up to three years after
vesting in the event of financial irregularities or gross financial misconduct.
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Savings Related Share Option Plan (the “SAYE Plan”)
Purpose and link to
business strategy
To encourage employees to make a long-term investment in the Company’s shares.
Performance metrics
Not applicable.
Operation
Opportunity
All employees in the UK, including the Executive Directors resident in the UK, are eligible to
participate in the Company’s Save As You Earn (‘SAYE’) scheme, which is approved by HMRC
and is subject to the limits prescribed by HMRC.
Participants may currently invest up to £500 per month for a three year period in order to
purchase shares at the end of the contractual period at a discount of 20% to the market
price of the shares at the commencement of the saving period. The Committee may vary this
level in line with HMRC limits.
Non-executive Directors’ fees
Purpose and link to
business strategy
To attract and retain suitable Non-executive Directors by ensuring that fees are competitive.
Operation
Paid monthly and reviewed each year.
Opportunity
The Non-executive Directors’ fees are determined by reference to the individual time
commitment and relevant benchmark market data.
Performance metrics
Not applicable.
Pension
Purpose and link to
business strategy
To provide cost effective retirement benefits.
Performance metrics
Not applicable.
Operation
Opportunity
Participation in defined contribution plan or cash allowance in lieu.
Up to 10% of base salary.
Recruitment and promotion arrangements
Purpose and link to
business strategy
Salary
To secure the appointment or promotion of high-calibre Executive Directors.
Starting base salary will be based on a combination of market information, internal relativities
and individual experience. Thereafter, salary progression will depend on the normal review
process. There would be no maximum level.
Variable pay for
External appointments The Company may offer additional cash and/or share-based elements when it considers
these to be in the best interests of the Company. Such payments would take account of the
remuneration relinquished when leaving a former employer and would reflect the nature,
time horizons and performance requirements attaching to that remuneration.
Where existing incentive or other arrangements are being bought out, this will be done
Tarsus Group plc 57
GOVERNANCE – REMUNERATION COMMITTEE REPORT
wherever possible by tying in any new arrangement to achievement against group targets in
either/both the annual performance bonus and long-term incentives.
per year.
Performance bonus
In response to feedback from shareholders no bonus will be guaranteed to encourage the
executive to move. The maximum bonus potential would be limited to 100% of annual salary
Long-term incentives
An award under the 2011 LTIP would normally be given, subject to the plan rules and in line
with the 2011 LTIP policy provisions.
The maximum award under the 2011 LTIP would be limited to 200% of annual salary per
year.
The total maximum performance bonus (100%) and 2011 LTIP award (200%) to any new
Executive Director would be 300% in total of annual salary.
Variable pay for
internal appointments Any variable pay elements awarded in respect of the prior role with the Group may be allowed
to pay out according to the terms of the plan, adjusted as relevant to take account of the
new appointment. In addition, any other ongoing remuneration obligations existing prior to
the appointment may continue.
Relocation
Travel
Non-executive
Directors
Where required, the Company will pay:
• reasonable expenses relating to moving house; and
• an allowance of up to 5% of base salary.
And either
• legal and estate agent fees and stamp duty for buying and/or selling a family home; and/or
selling a family home; and stamp duty for buying a new home near the base of
employment;
or
• ongoing rental costs for recruits whose family home remains overseas. In this case, where
possible, recruits will be expected to rent out their family home to offset the additional
cost. Benefits and Pension Benefits and pension entitlements would be offered in line
with the remuneration policy provisions in place at that time.
Where an executive is recruited to work in a country other than where they were resident
prior to being appointed, the Company will pay for one business class return fare per annum
each for the executive, his/her partner and dependent children in order to maintain family
or other links with his/her home country.
In cases of appointing a new Non-executive Director, the approach will be consistent with
the policy.
Note to policy tables in respect of current directors
In addition to the above elements of remuneration, any commitment made prior to, but due to be fulfilled after, the
approval and implementation of the remuneration policy detailed in this report will be honoured.
58 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
EXECUTIVE DIRECTORS’ POTENTIAL VALUES OF 2015 REMUNERATION PACKAGE
The graphs below provide estimates of the potential future reward opportunity for each of the Executive Directors
based on their roles (effective 1 January 2016), as established by the Remuneration Policy.
Neville Buch (£’000)
1200
£1,050
1000
41%
800
£636
600
Long-term variable element
27%
400
£311
24%
200
100%
49%
MINIMUM
ON TARGET
29%
Annual variable elements
Fixed elements
30%
0
MAXIMUM
Douglas Emslie (£’000)
2000
£1,727
1500
£1,000
49%
Long-term variable element
1000
Annual variable elements
34%
500
£441
22%
100%
44%
MINIMUM
ON TARGET
25%
Fixed elements
26%
0
MAXIMUM
Tarsus Group plc 59
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Dan O’Brien (£’000)
900
£814
800
700
41%
600
£512
500
26%
Long-term variable element
400
20%
£277
300
25%
Annual variable elements
Fixed elements
200
54%
100%
100
34%
0
MINIMUM
ON TARGET
MAXIMUM
Notes
1.
Fixed elements include base salary and benefits.
2.
Annual variable element includes performance bonus only.
3.
Long-term incentive value is calculated by reference to base salary at the date of allocation and excludes
subsequent share price movements. The awards assumed under the LTIP are in line with the awards made
in 2015 for Executive Directors.
4.
On-target performance assumes an annual performance bonus of 50% of salary for Neville Buch, Douglas
Emslie and Dan O’Brien. On-target vesting of the long-term variable element assumes adjusted EPS
performance equivalent to a 40% vesting of awards under the 2011 LTIP. Maximum performance assumes
the award of 100% of the annual performance bonus and maximum vesting of the 2011 LTIP awards.
DIRECTORS’ SERVICE CONTRACTS
All the existing service contracts of the Executive Directors are with Tarsus Group Limited and contain conventional
provisions for summary termination for “cause” but are otherwise terminable on 12 months’ notice expiring at any
time.
Termination payments are limited to base salary and benefits during the notice period. If an Executive Director’s
contract is terminated, the Remuneration Committee reserves the right to award a pro-rated annual bonus over the
period to the date of cessation of employment, subject to performance.
The existing service contracts have been amended such that the remuneration payable thereunder is reduced to the
extent of the director’s fees payable to them by the Company in accordance with their letters of appointment.
If any Executive Director wishes to accept a non-executive appointment elsewhere, this is discussed in advance with
the Board, including whether the director concerned should be entitled to retain any fees and payments from sources
outside the Group. At the date of this report, none of the Executive Directors serve as Non-executive Directors
elsewhere or are entitled to remuneration in respect of directorships of other companies.
All the directors’ service contracts and the Non-executive Directors’ letters of appointment are available for inspection
at the registered office of the Company and will be available for inspection at the Annual General Meeting.
60 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Provision for payment on loss of office
Other than on a change of control, the Executive Directors’ service contracts do not contain provisions for
compensation in the event of early termination. When determining termination payments, the Committee takes into
account a variety of factors, including individual and Company performance, the obligation of the director to mitigate
his or her own loss (for example, by gaining new employment) and the director’s length of service. It is expected that
any exit payments made to executives would not exceed one year’s base salary and benefits, which is consistent with
their notice period of up to 12 months. If an Executive Director’s contract is terminated, they are eligible for a pro-rated
performance bonus over the period to the date of cessation of employment, subject to performance.
The rules of the Company’s 2011 LTIP provide that, in the event of a change of control, awards made under the plan
will automatically vest. The rules of the 2016 ERP provide that, in the event of a change of control, awards will
automatically vest subject to the share price on the change of control being more than the share price on the date
of grant. Additionally, all the Company’s other share plans contain provisions relating to a change of control. In general,
outstanding awards and options would normally vest and become exercisable on a change of control, to the extent
that any performance conditions have been satisfied at that time. If the Committee considers it appropriate given the
circumstances of the change of control, time pro-rating may also apply.
All the Company’s share plans provide that in the event that an employee ceases employment prior to the vesting of
an award for an agreed reason (such as ill health, agreed retirement or redundancy), then, to the extent any
performance metrics have been met at that time, the award would normally vest when employment ceases on a prorated basis to reflect the proportion of the vesting period during which the individual was employed.
Shareholding guidelines for Executive Directors
As at 2 March 2016, the directors held 10.26% of the issued share capital of the Company in aggregate. A breakdown
of their holdings can be found on page 39. The Committee recognises the importance of aligning the interests of
Executive Directors with shareholders through the building up of a significant shareholding in the Group. Accordingly
Executive Directors are expected and encouraged to build up over time, the equivalent shares in value to at least one
year’s salary. New Executive Directors are expected to build up to this level over five years from their appointment.
Under the 2011 LTIP Executive Directors are required to retain shares of a value equal to 20% of any gain made, after
tax on the vesting of awards, for a minimum period of two years.
All Executive Directors of the Company, as at 2 March 2016, hold a beneficial interest in shares equivalent of at least
one year’s salary.
Consideration of shareholder views
The Company is committed to ongoing dialogue with shareholders and welcomes feedback on Executive Directors’
remuneration. The Committee believes it has a responsible approach to Directors’ pay and that its policy is appropriate
and fit for purpose.
Other share plans
The Committee has in the past made awards to Executive Directors under the Tarsus Group plc Company Share
Option Plan 2008. The last remaining award to Executive Directors under this plan was in 2006 and going forward there
is no intention to make any further awards to Executive Directors under this plan. An explanation of existing awards
under this plan is covered in the Annual Report on Remuneration (on pages 67).
Dilution
Not more than 10% of the issued ordinary share capital of the Company from time to time may be issued under all
the Company’s employee share plans in any 10 year rolling period. This limit does not include options or awards
which have lapsed or been surrendered.
Tarsus Group plc 61
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Non-executive Directors
The Remuneration Committee does not determine the fees payable to the Non-executive Directors, which are
considered and approved, subject to the limits set out in the Articles of Association of the Company, by the entire Board
and are shown on page 65. They are designed to recognise the significant responsibilities and time commitments of
the Non-executive Directors and to attract individuals with the necessary experience and ability to make an important
contribution to the Group’s affairs. The fees, which are neither performance-related nor pensionable, are comparable
with those paid by other companies operating in the same sector as the Company. Non-executive Directors do not
participate in any of the Company’s long term incentive plans.
The Non-executive Directors’ letters of appointment set out the expected time commitment and the Non-executive
Directors undertake that they will have sufficient time to meet what is expected of them. The initial term of the Nonexecutive Directors’ appointment is until the date falling 12 months after the date of the relevant letter of appointment.
The term of the appointment may be renewed by mutual consent for further periods of 12 months. If the appointment
is terminated early (prior to an expiry date), the Non-executive Director is not entitled to compensation for loss of
office.
Any other significant commitments of actual or proposed Non-executive Directors are disclosed to the Board before
appointment, with a broad indication of the time involved. The Board is informed of any subsequent changes of Nonexecutive Directors’ other significant commitments. Any changes to the Chairman’s other significant commitments are
also reported to the Board as they arise.
Committee discretion
The Committee operates under powers delegated to it by the Board. In addition, it complies with rules which have
either been approved by shareholders (the Long Term Incentive Plan) or by the Board (the Annual Performance Bonus
Plan). These rules provide the Committee with certain discretions which serve to ensure that the implementation of
the remuneration policy is fair both to the individual director and to shareholders, taking the overall performance
and position of the Company into account. The Committee also has discretions to set components of remuneration
within a range from time to time. The extent of such discretions are set out in the remuneration policy.
In addition, the Committee requires discretion to deal with genuinely exceptional or unforeseen circumstances. This
form of discretion will only be applied in the best interests of the Company and is intended to provide for changed
circumstances or strategy that have not been provided for in the remuneration policy, when it would be
disproportionate to seek specific approval from a general meeting of shareholders.
The Remuneration Committee will not exercise discretion to reward failure and will report on any exercise of discretion
that changes the amount of remuneration paid in any year.
Consideration of conditions elsewhere in the Group
When reviewing and setting the Executive Director remuneration, the Committee takes into account the pay and
employment conditions of all employees of the Group. The Group has not carried out a formal employee consultation
regarding the Executive Directors’ remuneration.
ANNUAL REPORT ON REMUNERATION
The following section of this report details the remuneration of the directors for the year ended 31 December 2015
and how the Company intends to implement the remuneration policy in 2016. An ordinary resolution to approve this
Annual Report on Remuneration will be proposed at the Annual General Meeting of the Company to be held on 20
June 2016.
The Remuneration Committee comprises three independent Non-executive Directors (David Gilbertson (Chairman),
Robert Ware and Tim Haywood). The Chairman and Group Managing Director attend meetings of the Remuneration
Committee by invitation except when their own remuneration is under discussion. The Secretary to the Remuneration
Committee is the Group Company Secretary and he is responsible for collating papers and coordinating advice. During
2015 no external advisers were engaged to assist with these matters.
62 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Key duties
The Committee’s key duties include:
•
•
•
•
setting, reviewing and recommending to the Board for approval the Group’s overall remuneration policy and
strategy;
setting, reviewing and approving individual remuneration arrangements for the Executive Directors, including
terms and conditions of employment and any policy changes;
briefings on the remuneration policy for employees of the Group; and
approving the rules and design of any Group share based incentive plans and the granting of awards under any
such plans.
Remuneration Committee Agenda 2015
•
•
•
•
•
•
•
•
Approval of the Group’s remuneration policy for Executive Directors.
Approval of Annual Performance Bonus targets for 2015.
Approval of awards to Executive Directors under the 2011 Long Term Incentive Plan.
Review of Executive Directors’ and Officers’ salaries.
Confirmation of the vesting of awards under the Company’s share plans vesting in 2014.
Approval of the 2014 Annual report on remuneration.
Confirmation of the performance conditions for the 2015 LTIP awards.
Approval of minor changes to share plan rules.
Director Contracts and Letters of Appointment
Details of the contracts and letters of appointment currently in place for directors who have served during the year
are as follows:
Directors
Executive
Neville Buch
Douglas Emslie
Dan O’Brien
Non-Executive
Robert Ware
David Gilbertson
Tim Haywood
Date of Contract
Tarsus Group Limited
1 June 1998
1 June 1998
4 July 2011
Notice
period
(months)
12
12
12
Date of letter
of appointment
Tarsus Group plc
3 October 2008
3 October 2008
4 July 2011
Date of letter
of appointment
Tarsus Group plc
3 October 2008 5 March 2014
31 July 2014
All Non-executive Directors’ letters of appointment are renewable on a 12 months basis.
Unexpired
term
(months)
7
12
5
Tarsus Group plc 63
GOVERNANCE – REMUNERATION COMMITTEE REPORT
In respect of each of the directors, including the Non-executive Directors, there are no other material provisions
(except as mentioned in this Report) which are necessary to allow shareholders to estimate the Company’s liability if
the contract is terminated early.
Single total figure of remuneration
The following parts of the Annual Report on Remuneration have been audited as if the requirements of The Large and
Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 Schedule 8 Part 3 had
been applied:
•
•
•
•
•
the single total figure of remuneration for each Director;
scheme interests awarded during the year;
pension entitlements;
payments to past Directors and payments for loss of office; and
Directors’ shareholdings and share interests.
All other parts of the Remuneration Committee Report are unaudited.
The emoluments in respect of qualifying services to both the Group and the Company of each person who served as
a director of the Company during the year were as follows:
Executive
Neville Buch
Douglas Emslie
Dan O’Brien
Hugh Scimgeour
Non-executive
Robert Ware
David Gilbertson
Tim Haywood
Notes
Salary and fees
Benefits
Pension
2015
£000
2014
£000
2015
£000
2014
£000
2015
£000
2014
£000
53
53
53
51
42
21
–
–
–
–
–
–
–
–
–
–
–
–
292
425
265
8
283
412
258
118
10
4
4
1
9
4
4
4
–
1
1
–
–
–
–
–
Annual bonus
2015
£000
2014
£000
–
–
–
–
–
–
258
377
119
–
236
343
113
36
Long Term
Incentives
2015
2014
£000
£000
383
742
290
–
427
810
345
–
–
–
–
–
–
–
Total
Remuneration
2015
2014
£000
£000
943
1,549
679
9
955
1,569
720
158
53
53
53
51
42
21
1. No Director received any additional payment for loss of office.
2. Value of the long-term incentives in respect of 2014 are derived from awards granted in 2012 under the 2011 LTIP
that vested in accordance with adjusted EPS performance for the three financial years ending 31 December 2014,
resulting in a 79% vesting of the respective awards. The value on vesting has been calculated by reference to the
actual market price on the date of exercise of these awards, as shown in the Long Term Incentives section of this
report.
3. Value of the long-term incentives for 2015 are derived from awards granted in 2013 under the 2011 LTIP that are
expected to vest in accordance with adjusted EPS performance for the three financial years ending 31 December
2015, resulting in a 91% vesting of the respective awards. The value on vesting has been calculated by reference
to the average closing price of the Company’s shares £2.22186 for the three months ending 31 December 2015.
4. Taxable benefits include, but are not limited, to items such as medical insurance.
5. Hugh Scimgeour resigned as a director on 31 January 2015.
64 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Executive Director base salaries and fees – 2016
The table below sets out the base salaries and fees of the Executive Directors with effect from 1 January 2016:
Executive
Neville Buch
Douglas Emslie
Dan O’Brien
Base salary
£
300,500
437,250
273,200
Non-executive Director fees – 2016
Percentage
increase
3%
3%
3%
The table below sets out the fees of the Non-executive Directors with effect from 1 January 2016:
Non-executive
David Gilbertson
Tim Haywood
Robert Ware
Base fees
£
2015 Performance bonus
54,075
54,075
54,075
Percentage
increase
3%
3%
3%
For the 2015 financial year, the maximum annual bonus opportunity was 100% of salary for Douglas Emslie and
Neville Buch, 50% of salary for Dan O’Brien.
An underlying performance criterion applied to all Executive Directors whereby the Group had to have achieved
adjusted earnings per share of at least 20.2p for the financial year ending 31 December 2015. Had this target not been
achieved, no bonus would have been payable to any Executive Director.
For Douglas Emslie, Neville Buch and Dan O’Brien, 50% of their 2015 bonus was payable on the achievement of an
adjusted earnings per share of 20.2p for the financial year ending 31 December 2015.
Personal objectives for Neville Buch were set by the Remuneration Committee. Personal objectives for Douglas Emslie
were set by the Executive Chairman, and for Dan O’Brien by the Group Managing Director. In all cases these were
reviewed and approved by the Remuneration Committee in advance. The Remuneration Committee also approved
recommendations on the level of achievement against them at the end of the performance period.
Neville Buch’s personal objectives for the year ended 31 December 2015 focused on product growth initiatives, event
execution and strategy development. Payout under this element of the bonus was 78%.
Douglas Emslie’s personal objectives for the year ended 31 December 2015 focused on product growth initiatives,
event execution and strategy development. Payout under this element of the bonus was 78%.
Dan O’Brien’s personal objectives for the year ended 31 December 2015 focused on product growth initiatives, banking
provisions and control structure targets and integration projects. Payout under this element of the bonus was 80%.
After taking account of their personal targets, Neville Buch, Douglas Emslie, Dan O’Brien and earned 89%, 89%, and
90% of their respective potential bonus opportunities.
2016 performance bonus framework
For the financial year commencing 1 January 2016, the Executive Bonus Plan will operate in line with the remuneration
policy. Bonuses are based 50% on adjusted earnings per share and 50% on personal and strategic objectives for
Neville Buch, Douglas Emslie and Dan O’Brien. Bonus opportunities for Douglas Emslie and Neville Buch remain
unchanged. Dan O’Brien’s bonus opportunity for 2016 will be 75% of base salary.
The Committee intends to disclose financial performance targets and personal objectives retrospectively in next year’s
Remuneration Report, subject to these no longer being considered by the Board to be commercially sensitive.
Tarsus Group plc 65
GOVERNANCE – REMUNERATION COMMITTEE REPORT
LONG TERM INCENTIVES
Tarsus Group plc 2011 Long Term Incentive Plan (the “LTIP”)
Date of
Grant
Neville Buch
03/05/12
07/03/13
09/03/15
Douglas Emslie
03/05/12
07/03/13
05/03/14
09/03/15
Dan O’Brien
03/05/12
07/03/13
05/03/14
09/03/15
At
1 Jan
2015
Granted
during
year
Exercised
during
year
Lapsed
during
year
At
31 Dec
2015
Grant
Market
Share
Exercisable
from
Exercisable
to
235,855
189,220
–
–
–
192,786
186,325
–
–
49,530
–
–
–
189,220
192,786
152.0p
218.0p
227.0p
03/05/15
07/03/16
09/03/18
03/05/22
07/03/23
09/03/25
447,368
366,972
385,497
–
–
–
–
374,008
353,420
–
–
–
93,948
–
–
–
–
366,972
385,497
374,008
152.0p
218.0p
213.75p
227.0p
03/05/15
07/03/16
05/03/17
09/03/18
190,583
143,348
150,584
–
–
–
–
146,062
150,560
–
–
–
40,023
–
–
–
–
143,348
150,584
146,062
152.0p
218.0p
213.75p
227.0p
03/05/15
07/03/16
05/03/17
09/03/18
Market
price
on
exercise
Gain
on
exercise
£2.2925
–
–
£427,150
–
–
03/05/22
07/03/23
05/03/24
09/03/25
£2.2925
–
–
–
£810,215
–
–
–
03/05/22
07/03/23
05/03/24
09/03/25
£2.2925
–
–
–
£345,159
–
–
–
2012 LTIP awards performance conditions
The performance conditions for the LTIP awards made in 2012 are based on absolute targets for adjusted earnings
per share over the three financial years 2012-2014 as follows:
Less than 40p – zero vesting
40p – 30% of award vests
Between 40p and 47p – between 30% and 100% of award vests on a straight line basis
The performance of the Group in the three years ending 31 December 2014 resulted in a cumulative adjusted
earnings per share of 44.9p. Awards made under the LTIP in 2012 vested at 79% during 2015.
2013 LTIP awards performance conditions
The performance conditions for the LTIP awards made in 2013 are based on absolute targets for adjusted earnings
per share over the three financial years 2013-2015 as follows:
Less than 48p – zero vesting
48p – 30% of award vests
Between 48p and 55p – between 30% and 100% of award vests on a straight line basis.
The performance of the Group in the three years ending 31 December 2015 resulted in a cumulative adjusted
earnings per share of 54.1p. Awards made under the LTIP in 2013 are expected to vest at 91% during 2016.
2014 LTIP awards performance conditions
The performance conditions for the LTIP awards to be made in 2014 are based on absolute targets for adjusted
earnings per share over the three financial years 2014 – 2016 as follows:
Less than 45p – zero vesting
45p -30% of award vests
Between 45p and 52p – between 30% and 100% of awards on a straight line basis.
2015 LTIP awards performance conditions
The performance conditions for the LTIP awards to be made in 2015 are based on absolute targets for adjusted
earnings per share over the three financial years 2015 – 2017 as follows:
Less than 54p – zero vesting
54p – 30% of award vests
Between 54p and 61p – Between 30% and 100% vesting on a straight line basis
66 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
2016 LTIP awards performance conditions
The performance conditions for the LTIP awards to be made in 2016 are based on absolute targets for adjusted
earnings per share over the three financial years 2016 – 2018 as follows:
Less than 50p – zero vesting
50p – 30% of award vests
Between 50p and 57p – Between 30% and 100% vesting on a straight line basis
The Committee, when setting the performance criteria in respect of the LTIP, takes account of the biennial nature of
the business in respect of the required three year performance period for each award.
Company Share Option Plan (‘2008 CSOP’)
The 2008 CSOP was approved and adopted by shareholders at the General Meeting of the Company held on 31
October 2008. Grants under the 1998 Company Share Option Plan and the 2008 Company Share Option Plan
(together the ‘CSOP Legacy Plans’) which were in place prior to the 2008 CSOP continue to vest. The operation of the
2008 CSOP is kept under review to ensure that grant levels, performance criteria and vesting schedules remain
appropriate. The Remuneration Committee believes the 2008 CSOP is an effective way to incentivise employees within
the organisation and to align their interests with those of shareholders.
Details of share options granted under the 2008 CSOP and the CSOP Legacy Plans and held by those directors who
served during the year, all of which are beneficially held, are as follows:
Grant
Douglas Emslie
3 Mar 06
At 1 Jan 15
Exercised
At 31 Dec 15
325,000
325,000
–
Exercise
Price
212.5p
Exercise
Date
30 Oct 2015
Market
Price
£2.3125
The exercise price is the market price of the Company’s ordinary shares at the date of the award.
Gain
£60,938
No consideration is payable for the award of any options until such options are exercised. All of the options issued to
directors are subject to performance conditions. There were no variations during the year in the terms and conditions
of any options, including performance conditions.
Options granted on 3 March 2006 required an increase in the Company’s share price reflecting at least RPI plus 3%
per annum and matching or exceeding the performance of the FTSE Small Caps Index over the same period.
SAVE AS YOU EARN PLAN (‘SAYE PLAN’)
The number of share options held by the directors under the SAYE Plan was as follows:
Douglas Emslie
Dan O’Brien
Grant
Date
Options
as at
1 Jan 2015
Exercised
in year
Granted
in year
Lapsed
in year
Option
Price
Options
as at
31 Dec 2015
2 Apr 13
5,434
–
–
–
165.6p
5,434
2 Apr 13
5,434
–
–
–
165.6p
5,434
There have been no changes to the options or shares held by directors between 31 December 2015 and 2 March
2016.
Shareholdings of the Directors
The interests of the directors in the Company’s ordinary shares are shown in the Directors’ Report on page 39.
Tarsus Group plc 67
GOVERNANCE – REMUNERATION COMMITTEE REPORT
RELATIVE IMPORTANCE OF SPEND ON PAY
The graph below details the Group’s dividends and total Group-wide expenditure on pay for all employees (this
includes pension, variable pay and social security), as reported in the audited financial statements for the last two
financial years.
This information has been presented to assist shareholders in assessing the importance of spend on pay.
£’000
15000
10000
£16,289
£15,998
5000
£7,174
2014
2015
£7,885
0
DIVIDENDS
REMUNERATION
Employee remuneration and dividends
The difference in actual expenditure between 2015 and 2014 on remuneration for all employees in comparison to
distributions to shareholders by way of dividend is set out in the table below:
Remuneration paid to all employees of group
Dividends paid
2015
2014
16,289
7,885
15,998
7,174
% change between
2015 and 2014
1.8%
10.0%
Percentage change in remuneration of the Group Managing Director and employees
The percentage change in remuneration between 2015 and 2014 for the Group Managing Director and for all
employees in the Group is set out in the table below:
Group Managing Director
Percentage change in
remuneration*
between 2015 and 2014
*Remuneration includes salary, benefits and bonus only.
6.1%
Average percentage change in
remuneration* of UK employees
between 2015 and 2014
6.7%
The comparator group of employees is comprised of employees based in the UK as this provides geographic consistency.
68 Tarsus Group plc
GOVERNANCE – REMUNERATION COMMITTEE REPORT
Statement of voting at last AGM
The following table sets out the votes cast in respect of our previous remuneration report for 2014 at the Company’s
2015 AGM:
2014 Directors’ Remuneration Report
Number of votes
Percentage of votes (Excluding abstentions)
For
Against
69,613,290
99.97%
19,228
0.03%
Votes withheld
No views on directors’ remuneration were expressed to the Company by shareholders during the year.
7,458
N/A
Total Shareholder Return (“TSR”) Performance
The graph below shows the Group’s TSR performance for the five year period ended 31 December 2015 against the
performance of the FTSE Small Cap Price Index.
The FTSE Small Cap Price Index was selected as it was considered to be the most appropriate benchmark given the
Group’s size and profile.
TOTAL SHAREHOLDER RETURN (REBASED TO 100)
Growth in the value of a hypothetical £100 holding over five years. The chart has been rebased to 100 as at 1 January
2011.
300
250
200
150
100
50
0
Jan 11
Jan 12
TARSUS GROUP
Jan 13
Jan 14
Jan 15
Jan 16
FTSE SMALL CAP
Historical total remuneration for the director undertaking the role of CEO
Total remuneration
% Bonus opportunity realised
Long-term incentive vesting rates against maximum
opportunity (2011 LTIP)
Douglas Emslie
2015
2014
£000
£000
2013
£000
2012
£000
2011
£000
1,549
1,569
1,687
95%
100%
93%
91%
79%
92%
0%
0%
89%
83%
706
642
Tarsus Group plc 69
GOVERNANCE – DIRECTORS’ RESPONSIBILITY STATEMENT
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law in Jersey requires the directors to prepare financial statements for each financial year. Under that law
the directors have elected to prepare the Group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union (EU) and have also chosen to prepare the parent
Company financial statements under IFRSs as adopted by the EU. The financial statements are required by law to
give a true and fair view of the state of affairs of the company and the Group and of the Income Statement of the
Company and the Group for that period. In preparing these financial statements, International Accounting Standard
1 requires that directors:
•
•
•
•
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the entity’s financial
position and financial performance; and
make an assessment of the Company’s ability to continue as a going concern.
The directors are responsible for keeping proper 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 (Jersey) Law 1991. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website.
Responsibility statement
The Directors confirm that, to the best of their knowledge:
•
•
the financial statements, prepared in accordance with IFRSs, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings included in the consolidation taken as
a whole; and
the Business Review, which is incorporated into the Directors’ Report, includes a fair review of the development
and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
By order of the Board
Douglas Emslie
Group Managing Director
2 March 2016
70 Tarsus Group plc
Dan O’Brien
Group Finance Director
2 March 2016
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
OPINION ON FINANCIAL STATEMENTS OF TARSUS GROUP PLC
In our opinion the financial statements:
•
•
give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2015
and of the Group’s and the parent company’s profit for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union; andhave been properly prepared in accordance with the Companies (Jersey) Law 1991.
The financial statements comprise the Consolidated and Company Income Statement, the Consolidated and Company
Statements of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Cash Flows, the Consolidated and Company Statements of Changes in
Equity and the related notes to the consolidated financial statements 1 to 30 and related notes to the Company
financial statements 1 to 12. The financial reporting framework that has been applied in their preparation is applicable
law and IFRSs as adopted by the European Union.
GOING CONCERN
We have reviewed the directors’ statement regarding the appropriateness of the going concern basis of accounting
and the directors’ statement on the longer-term viability of the Group contained within the Directors’ Report on page
40.
We have nothing material to add or draw attention to in relation to:
•
•
•
•
the directors’ confirmation on page 40 that they have carried out a robust assessment of the principal risks facing
the Group, including those that would threaten its business model, future performance, solvency or liquidity;
the disclosures on pages 51 and 52 that describe those risks and explain how they are being managed or
mitigated;
the directors’ statement in note 1 to the financial statements about whether they considered it appropriate to
adopt the going concern basis of accounting in preparing them and their identification of any material
uncertainties to the Group’s ability to continue to do so over a period of at least twelve months from the date of
approval of the financial statements;
the director’s explanation on page 40 as to how they have assessed the prospects of the Group, over what period
they have done so and why they consider that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We agreed with the directors’ adoption of the going concern basis of accounting and we did not identify any such
material uncertainties. However, because not all future events or conditions can be predicted, this statement is not
a guarantee as to the Group’s ability to continue as a going concern.
INDEPENDENCE
We are required to comply with the Financial Reporting Council’s Ethical Standards for Auditors and we confirm that
we are independent of the Group and we have fulfilled our other ethical responsibilities in accordance with those
standards. We also confirm we have not provided any of the prohibited non-audit services referred to in those
standards.
Tarsus Group plc 71
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
The assessed risks of material misstatement described below are those that had the greatest effect on our audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team:
Risk
How the scope of our audit responded to the risk
The Group made one acquisition during the year with
consideration totalling £9.7 million.
For the acquisition of the trade and assets of
Painweek in the year, we have:
Appropriate judgement applied to the accounting
for Business Combinations
We identified a risk that the judgements made by
Directors in allocating the purchase price of this
acquisition to Goodwill and acquired assets and
liabilities are not appropriate.
Accounting for acquisitions involves management
judgement in estimating:
•
•
the valuation of consideration;
the identification of acquired intangible assets; and
the fair valuation of all acquired assets and liabilities.
We also identified a risk that the ongoing assessment of
the fair value of any outstanding deferred consideration
from acquisitions in previous years and the fair value of
put and call options over shares held by non-controlling
interests are not appropriate.
The acquisition of Painweek during the year is
disclosed in Note 28. Liabilities recognised relating to
contingent consideration and put and call options are
disclosed in Notes 17 and 19.
• assessed the valuation of purchase consideration
by reference to acquisition agreements and,
for deferred and contingent elements, those key
underlying assumptions relating to expected
future performance that impact amounts to be paid;
• reviewed the share purchase agreement to
complete our own assessment of acquired
intangible assets, using this assessment to
challenge management;
• considered and challenged the judgements made in
the assessment of fair value of acquired assets and•
liabilities, including intangible asset valuations, by:
– assessing the appropriateness of valuation
methodologies used;
– benchmarking key assumptions, including applied
discount rates, against comparator companies;
– sensitising relevant forecasts;
– testing the mechanical accuracy of the underlying7
calculations; and
– benchmarking the residual goodwill arising against
other industry comparator companies.
For deferred and contingent commitments relating to
acquisitions in prior years, we have:
• recalculated the Group’s valuation of deferred
consideration by reference to the terms in the
acquisition agreements, actual post acquisition
performance and management’s latest future
performance forecasts;
• considered those future performance forecasts
through performing sensitivity analysis and
benchmarking against historic performance and local
market trends; and
72 Tarsus Group plc
• considered other key assumptions used, such as
discount rates, with reference to assessing the
appropriateness of the methodology used,
corroboration of key inputs to external evidence
and benchmarking against comparator companies.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
For put and call options, we have:
• agreed the stake held by the Group to acquisition
documents;
• assessed management’s fair value calculations
against relevant accounting guidance; and
• recalculated the fair value of options with reference
to future performance forecasts, assumptions and
discount rates tested as outlined above.
Management’s annual impairment review of
goodwill and intangible assets
Goodwill from business combinations and intangible
assets is assessed annually for impairment. Goodwill
and Intangible assets total £127.1m as at 31 December
2015 (2014: £126.8m).
Impairment tests require the estimation of
recoverable value using a discounted cash flow
measurement of value in use, as detailed in Note 12
Intangible assets.
We identified a risk that the judgements made by
management when:
•
•
•
producing future cash flow forecasts;
selecting and applying appropriate discount rates; and
considering of appropriate sensitivities
In order to consider and challenge the appropriateness
of management’s annual impairment review we
undertook the following procedures:
• assessment of management’ forecasting accuracy by
comparing previous projections to actuals achieved;
• benchmarking discount and growth rates used
against independent industry data and comparator
companies;
• assessing applied sensitivities;
• verfiying the impact of those on associated
calculations prepared by management; and
• testing the integrity of the impairment model.
were not appropriate.
Recognition of Revenue
The Group operates a diverse portfolio of events,
exhibitions, publications, conferences globally and as
such revenue recognition across the Group’s portfolio
of events is a risk that utilises significant audit resources.
We identified a risk that exhibitor revenue associated
with their events may not be valid or complete.
Refer to the Group’s accounting policy for revenue
recognition in Note 1.
Our audit procedures on revenue included
understanding the Group’s revenue recognition policy,
determining whether the policy is in accordance
with IFRS and substantively testing the consistent
application of policy across the Group.
To address potentially invalid or incomplete exhibitor
revenue from the Group’s events we:
• used event floor plans to test completeness of
revenue by tracing a sample of exhibitors from floor
plans to contracts, recorded revenue transactions
and ultimately to cash received;
and
• tested other revenue, such as sponsorship,
publishing and conference revenue, on a sample
basis, from third party contracts or evidence of
attendance to revenue recorded.
Tarsus Group plc 73
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
The description of risks above should be read in conjunction with the significant and material issues considered by
the Audit Committee discussed on page 49 and are consistent with those communicated in the prior year.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality
both in planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group to be £1,000,000 (2014: £800,000), which is 4% (2014: 6%) of management’s
adjusted profit before tax, and equates to 2.5% of equity (2014: 2%). Materiality has been calculated on a consistent
basis with 2014, but fluctuates due to the Group’s biennial operating cycle. Adjusted profit before tax has been used
as a base for materiality on the basis that it reflects underlying business performance; however amortisation and
share option charges have not been excluded from our calculation of materiality, as they are annual costs. Analysis
of adjusting items is disclosed in Note 3 on page 92.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of
£100,000 (2014: £16,000), as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing
the overall presentation of the financial statements.
An overview of the scope of our audit
Our Group audit scope was based on a quantitative risk assessment considering metrics including revenue and
profit before tax as well as a qualitative risk assessment, considering significant risks of material misstatement and
our assessment of local market risk.
In selecting the divisions in scope each year, we update our understanding of the Group and its environment, its
principal risks, performance and our understanding of the Group’s system of internal controls, in order to check
that the divisions selected provide an appropriate basis on which to undertake audit work to address the identified
risks of material misstatement. Such audit work represents a combination of procedures, all of which are designed
to target the Group’s identified risks of material misstatement in the most effective manner possible.
Our Group audit scope focused primarily on the Group’s US and European divisions, with focused specific audit
procedures performed on the Group’s Emerging Markets, reflecting the Group’s three reportable segments. Of the
Group’s divisions, eight were subject to a full scope audit, and two divisions were subject to specified audit
procedures where our testing was focused on our assessment of local market risks and identified risks of
misstatement, and considering the materiality of the Group’s operations at those locations.
The eight (2014: seven) full scope divisions represent the principal business units within the Group’s three reportable
segments and account for 80% (2014: 68%) of the Group’s revenue, 93% of the Group’s profit before tax (2014: 94%)
and 89% of the Group’s net assets (2014: 85%). They were also selected to provide an appropriate basis for
undertaking audit work to address the risks of material misstatement identified above. Our audit work at each of
these divisions was executed at levels of materiality applicable to each individual unit which were lower than group
materiality and ranged from £500,000 to £580,000 (2014: £320,000 to £600,000).
The two (2014: two) divisions subject to specified audit procedures that were focused on risks relating to Emerging
Markets represented 10% (2014: 14%) of the Group’s revenue and 1.5% of the Group’s profit before tax (2014: 6%).
Specified audit procedures focussed on risks relating to Income Statement balances and included procedures
designed to mitigate the revenue recognition risk outlined above as well as other audit procedures deemed relevant
to the local market.
The Group audit team provides appropriate oversight and guidance to component auditors through a combination
74 Tarsus Group plc
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
of location visits, regular communication and detailed review. In the current year the Group audit team completed
the audit procedures for seven of the eight full audit scope divisions, with component auditors being used for the
remaining full scope division. The Group audit team visited the component auditor of the full scope division in 2013
and completed a detailed and thorough review of their work.
Component auditors were also used to perform specified audit procedures for the two divisions in Emerging Markets.
The Group auditor regularly communicated with the component auditors performing specified audit procedures,
from the planning stage through to a detailed review of the procedures performed.
The remaining divisions that were assessed as not being significant to the Group were subject to central analytical
procedures performed by the Group audit team.
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
•
•
•
we have not received all the information and explanations we require for our audit; or
proper accounting records have not been kept by the parent company, or proper returns adequate for our audit
have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
Corporate Governance Statement
Under the Listing Rules we are also required to review the part of the Corporate Governance Statement relating to
the Company’s compliance with certain provisions of the UK Corporate Governance Code. We have nothing to report
arising from our review.
Our duty to read other information in the Annual Report
Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion,
information in the annual report is:
•
•
•
materially inconsistent with the information in the audited financial statements; or
apparently materially incorrect based on, or materially inconsistent with, our knowledge of the group acquired in
the course of performing our audit; or
otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge
acquired during the audit and the directors’ statement that they consider the annual report is fair, balanced and
understandable and whether the annual report appropriately discloses those matters that we communicated to
the audit committee which we consider should have been disclosed. We confirm that we have not identified any such
inconsistencies or misleading statements.
Tarsus Group plc 75
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC
Other matter
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the provisions of the UK Companies Act 2006 as if that Act had applied to the company.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors. We also comply with International Standard on Quality Control 1 (UK and Ireland). Our
audit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied.
Our quality controls and systems include our dedicated professional standards review team, strategically focused
second partner reviews and independent partner reviews.
This report is made solely to the company’s members, as a body, in accordance with Article 113A of the Companies
(Jersey) Law 1991. 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.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and
the parent company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the annual report to
identify material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course
of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider
the implications for our report.
James Bates
for and on behalf of Deloitte LLP
Chartered Accountants and Recognized Auditor
London, UK
2 March 2016
76 Tarsus Group plc
CONSOLIDATED INCOME STATEMENT
Notes
Total Revenue
Less: Revenue from discontinued operations
Continuing Operations
Group revenue
Operating costs
Share of profit of Joint Ventures
29
86,877
(4,924)
Year to 31
December
2014
£000
2
81,953
50,874
Net finance costs
(58,245)
(40,893)
2,3
24,491
10,679
19,069
7,110
7
Profit before taxation
Profit for the financial year from continuing operations
8
Discontinued Operations
(Loss)/profit for the financial year from discontinued operations 29
Profit for the financial year
Profit for the financial year attributable to equity
shareholders of the parent company
Profit for the financial year attributable to
non-controlling interests
Notes
Earnings per share (pence)
– basic
– diluted
Dividends
Equity – ordinary
Final 2014 dividend paid
Interim 2015 dividend paid
Minority dividend paid
60,568
(9,694)
6
13
Group operating profit
Taxation expense
Year to 31
December
2015
£000
10
9
783
(5,422)
698
(3,569)
(2,176)
(1,706)
(1,426)
1,349
16,893
5,404
15,467
6,753
14,579
4,989
888
1,764
15,467
6,753
Year to 31
December
2015
Year to 31
December
2014
14.4
14.4
5.0
5.0
£000
£000
5,469
2,416
1,908
4,996
2,179
1,224
9,793
8,399
Tarsus Group plc 77
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the financial year
Other comprehensive expense:
Cash flow hedge reserve – movement in fair value
Foreign exchange translation differences
Other comprehensive (expense)/income
Total comprehensive income for the year
Attributable to:
Equity shareholders of the parent company
Non-controlling interests
Total comprehensive income for the year
Year to 31
December
2015
£000
Year to 31
December
2014
£000
(262)
(1,835)
(910)
1,977
13,370
7,820
12,482
888
6,056
1,764
15,467
(2,097)
13,370
6,753
1,067
7,820
Other comprehensive income relating to foreign exchange translation differences, fair value movements in cash flow
hedges and the tax effects thereon may all subsequently be reclassified to profit and loss if certain conditions are met.
The amounts above are presented net of tax.
78 Tarsus Group plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investment in Joint Ventures
Other investments
Deferred tax assets
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
CURRENT LIABILITIES
Trade and other payables
Deferred income
Provisions
Liabilities for current tax
11
12
13
14
15
16
17
19
14
18
NET ASSETS
21
Issued capital and reserves attributable to equity shareholders of the parent
NON-CONTROLLING INTERESTS
TOTAL EQUITY
154,130
148,965
40,402
44,525
904
127,127
23,595
1
2,503
29,709
10,693
(27,536)
(24,135)
(200)
(1,510)
(12,979)
TOTAL ASSETS LESS CURRENT LIABILITIES
EQUITY
Share capital
Share premium account
Other reserves
Retained loss
As at 31
December
2014
£000
(53,381)
NET CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other payables
Deferred tax liabilities
Interest bearing loans and borrowings
As at 31
December
2015
£000
1,278
126,756
15,924
1
5,006
32,178
12,347
(28,661)
(28,519)
(130)
(3,689)
(60,999)
(16,474)
141,151
132,491
(38,364)
(8,505)
(54,350)
(35,953)
(8,048)
(50,957)
39,932
37,533
(101,219)
(94,958)
5,091
48,280
(15,891)
(1,972)
5,060
47,424
(13,794)
(6,601)
4,424
5,444
35,508
39,932
32,089
37,533
The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and
authorised for issue on 2 March 2016 and signed on its behalf by:
J D Emslie
Group Managing Director
D P O’Brien
Group Finance Director
Tarsus Group plc 79
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation
Amortisation & Impairment
Other gains
Loss/(profit) on disposal of tangible assets
Profit on disposal of subsidiary
Share option charge
Taxation charge
Interest payable
Share of joint venture profits
Dividend received from joint venture company
11
12
8
7
Operating cash flow before changes in working capital
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in provisions
Cash flows from investing activities
Proceeds from sale of tangible fixed assets
Acquisition of property, plant & equipment
Acquisition of intangible fixed assets
Acquisition of subsidiaries – cash paid
Acquisition of joint venture – cash paid
Proceeds on disposal of business
Acquisition of subsidiaries – cash acquired
Deferred and contingent consideration paid
Net cash outflow from investing activities
Cash flows from financing activities
Drawdown of borrowings
Bank facility fees
Proceeds from the issue of share capital
Purchases for employee benefit trust
Dividends paid to shareholders in parent company
Dividends paid to non-controlling interests in subsidiaries
Net cash (outflow)/inflow from financing activities
80 Tarsus Group plc
15,467
6,753
434
6,969
(4,469)
93
(165)
1,706
2,202
5,422
(783)
975
22,394
(1,768)
(1,960)
Net cash from operating activities
Closing cash and cash equivalents
Year to 31
December
2014
£000
27,851
2,862
(8,381)
62
Cash generated from operations
Interest paid
Income taxes paid
Net (decrease)/increase in cash and cash equivalents
Opening cash and cash equivalents
Foreign exchange movements
Year to 31
December
2015
£000
15,572
(6,799)
7,146
85
16,004
(1,760)
(1,682)
18,666
12,562
163
(615)
(1,088)
(3,258)
(2,675)
3,256
–
(7,247)
39
(645)
(1,120)
(16,757)
–
833
152
(5,083)
(11,464)
(22,581)
3,393
(243)
–
(1,445)
(7,638)
(1,908)
9,157
(330)
10,000
(388)
(6,975)
(1,224)
(639)
12,347
(1,015)
221
12,142
(16)
(7,841)
16
535
4,504
(1,669)
(24)
–
1,180
1,422
3,569
(698)
–
10,693
10,240
12,347
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 1 January 2015
Recognised foreign exchange losses
for the period
Profit for the period:
– Attributable to equity shareholders
– Attributable to non-controlling
interests
Cash flow hedge reserve
Total comprehensive income/
(expense) for the period
Scrip dividend
New share capital subscribed
Share option charge
Movement in reserves relating to
deferred tax
Other movements in reserves
Dividend paid
Dividend paid to non-controlling
interests
Net change in shareholders’ funds
As at 31 December 2015
Share
Capital
Account
£000
5,060
–
–
–
–
Share ReorganPremium
isation
Reserve Reserve*
£000
£000
47,424
6,013
–
–
–
–
–
–
6
25
–
–
240
616
–
–
–
–
–
–
31
5,091
–
–
–
–
–
–
–
Other Reserves
Capital
Fair
Foreign
Redemption
Value Exchange
Reserve Reserve
Reserve
£000
£000
£000
(443)
–
–
–
–
–
(262)
–
–
–
–
–
(1,835)
888
–
888
(262)
–
–
–
(1,237)
(2,250)
(7,885)
(1,020)
2,399
–
14,579
–
–
£000
5,444 37,533
– 14,579
(1,835)
–
–
–
14,579
–
–
1,422
888 13,370
–
246
–
641
– 1,422
–
–
–
–
(1,908) (1,908)
–
–
–
856
–
–
6,013
(1,835)
(6,601)
Total
(262)
–
–
–
–
–
–
48,280
–
£000
NonControlling
Interests
£000
–
–
–
–
–
–
–
–
(818) (18,546)
Retained
Earnings
–
–
–
(262)
–
–
–
(1,835)
(443) (1,080) (20,381)
(1,237)
(2,250)
(7,885)
4,629
(1,972)
4,424 39,932
*The reorganisation reserve was created as a result of the Scheme of Arrangement effective from 26 November 2008.
Tarsus Group Limited, previously Tarsus Group plc, registered in England and Wales under company number 2000544,
entered into a “Share for Share” exchange on a one-for-one basis with Tarsus Group plc, registered in Jersey under
company number 101579.
Tarsus Group plc 81
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Share ReorganShare
isation
Capital Premium
Reserve Reserve*
Account
£000
£000
£000
At 1 January 2014
4,797
Recognised foreign exchange gains
for the period
–
Profit for the period:
– Attributable to equity shareholders
–
–
– Attributable to non-controlling interests
Cash flow hedge
–
Total comprehensive income
(expense) for the period
–
Scrip dividend
5
New share capital subscribed
258
Cost of shares issued
–
Share option charge
–
Movement in reserves relating to
deferred tax
–
Other movements in reserves
–
Dividend paid
–
Dividend paid to non-controlling interests –
Written Put/Call options over
non-controlling interests
–
Non-controlling interests arising on
acquisition
–
37,689
6,013
–
–
–
–
–
–
As at 31 December 2014
47,424
Net change in shareholders’ funds
82 Tarsus Group plc
263
5,060
–
–
Other Reserves
Capital
Fair
Foreign
Redemption
Value Exchange
Reserve Reserve
Reserve
£000
£000
£000
Retained
Earnings
Total
£000
NonControlling
Interests
£000
–
–
1,977
(443)
92
(20,523)
8,766
–
–
–
–
–
(910)
–
–
–
4,989
–
–
–
–
1,977
–
195
9,927
(387)
–
–
–
–
–
–
–
–
–
–
–
(910)
–
–
–
–
1,977
–
–
–
–
–
–
–
–
–
(12,236)
1,977
(15,367)
–
–
–
–
–
9,735
–
–
–
–
–
–
–
–
–
–
6,013
(443)
–
–
–
–
–
–
–
(910)
–
–
–
–
–
(818) (18,546)
4,989
–
–
–
1,180
(208)
(1,917)
(7,175)
–
–
(6,601)
£000
3,831 40,222
–
1,764
–
4,989
1,764
(910)
1,764 7,820
–
200
– 10,185
–
(387)
– 1,180
–
(208)
– (1,917)
– (7,175)
(1,224) (1,224)
– (12,236)
1,073
1,613
1,073
(2,689)
5,444 37,533
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GROUP ACCOUNTING POLICIES
Tarsus Group plc (the “Company”) is a company incorporated in Jersey. The consolidated financial statements of the
Company for the year ended 31 December 2015 present information about the Company and its subsidiaries
(together referred to as the “Group”) and the Group’s interest in jointly controlled entities. The parent company
financial statements present information about the Company as a separate entity and not about its Group.
The Company is listed on the London Stock Exchange.
The financial statements were authorised for issue by the directors on 2 March 2016.
a) Statement of compliance
Both the Group and Company financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRSs”) as adopted by the EU (“Adopted IFRS”). The Company financial statements are presented
on pages 117 to 124.
Adoption of new International Financial Reporting Standards in 2015
The following new standards and interpretations have been adopted in the current year but have not impacted the
reported results or the financial position:
•
•
•
•
•
•
•
Amendments to IFRS 11, IFRS 12 and IAS 28 – Investment Entities
Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
Amendments to IAS 16 and IAS 38 – Clarification of Acceptable Methods of Depreciation and Amortisation
Amendments to IAS 1 – Disclosure Initiative
IFRS 9 – Financial Instruments
IFRS 12 – Disclosure of Interests in Other Entities
IFRS 15 – Revenue from Contracts with Customers
•
Annual improvements to IFRS’ 2012-14 Cycle – Effective for periods starting on or after 1 January 2016
Standards and Interpretations issued but not yet applied
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations
to existing standards have been published that are mandatory for forthcoming financial periods, but which the Group
has not adopted early. Those which are considered relevant to the Group’s operations are as follows:
Other standards issued but not yet effective are not expected to have a material impact on the financial statements.
b) Basis of preparation and accounting estimates and judgements
These financial statements are presented in Sterling, rounded to the nearest thousand.
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements.
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and
expenses. The estimates and underlying assumptions are based on historical experiences and various other factors
that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
The financial statements have been prepared on a going concern basis, which assumes that the Company will continue
in operational existence for the foreseeable future as disclosed in the Directors’ report on page 40.
Tarsus Group plc 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
c) Basis of consolidation
i) Subsidiaries
Subsidiaries are those entities controlled by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that presently are exercisable or convertible are also taken into account.
The financial statements of subsidiaries are included in the consolidated financial statements from the date control
commences until the date that control ceases. When the Group loses control of a subsidiary, the gain or loss on
disposal recognised in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets
(including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously
recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had
directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained
in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement, when applicable, the
costs on initial recognition of an investment in an associate or a joint venture.
ii) Joint ventures
Joint ventures are those entities over whose activities the Group has joint control. The consolidated financial
statements include the investment in joint ventures, stated at cost, plus the Group’s share of retained post
acquisition profits and other changes in net assets. Joint ventures are equity accounted from the date that joint
control commences until the date that the joint control ceases.
iii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenditure arising from intragroup
transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from
transactions with jointly controlled entities are eliminated to the extent of the Group’s interest in the entity.
d) Foreign currency
i) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the year end are translated into the relevant
functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
ii) Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated into Sterling at foreign exchange rates ruling at the year end. The revenues and
expenses of foreign operations are translated into Sterling at the weighted average rate for the year. Foreign
exchange differences arising on retranslation are recognised directly in a separate component of equity. Any
exchange differences arising from the translation of the net investment which were previously taken to reserves
are released to the income statement upon disposal of the investment.
e) Property, plant and equipment
i) Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and
impairment losses (see accounting policy g).
ii) Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of items
of property, plant and equipment. The estimated useful lives are as follows:
Computer equipment
Fixtures and fittings
Motor vehicles
3 years
4-5 years
4 years
The residual value and economic lives of property, plant and equipment is reassessed annually.
84 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
f) Intangible assets and goodwill
i) Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries and joint ventures.
In respect of business acquisitions, goodwill represents the difference between the fair value of the consideration
and the fair value of the net identifiable assets and contingent liabilities acquired. Acquisition costs are expensed
as incurred.
In addition, due to timing of acquisitions amongst other factors, the process of allocating purchase price cannot
always be completed within the period of time for preparation of the financial statements and IFRS 3 allows a
twelve month period from the date of acquisition to finalise the accounting for a business combination. In such
circumstances a provisional allocation is made, which may give rise to the need for adjustment within the next
financial year.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units
and is not amortised but is tested annually for impairment (see accounting policy g).
Adjustments to any contingent consideration arising from events subsequent to the acquisition date are recorded
in the income statement.
On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
ii) Other intangible assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and
impairment losses (see accounting policy g).
Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense
incurred.
iii) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it meets the recognition criteria
set out in IAS 38, “Intangible Assets”. All other expenditure is expensed as incurred.
iv) Amortisation
Amortisation is charged to overheads in the income statement on a straight-line basis over the estimated useful
lives of intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful
life are systematically tested for impairment on an annual basis. Other intangible assets are amortised from the
date they are available for use. The estimated useful lives are determined separately for each acquisition and fall
within the following ranges:
Trademarks
Customer lists
10 – 20 years
5 – 10 years
g) Impairment
The carrying amounts of the Group’s goodwill is reviewed annually to determine the asset’s recoverable amount. An
impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income statement.
For other assets the Group considers annually whether there are any impairment indicators. If there are, an
impairment review is carried out.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount
of any goodwill allocated to cash-generating units (groups of units) and then to reduce the carrying amount of the
other assets in the unit (group of units) on a pro-rata basis.
Tarsus Group plc 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
i) Calculation of recoverable amount
The recoverable amount is the greater of the net selling price, defined as the fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
ii) Reversals of impairment
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
h) Financial instruments
Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are recognised on the date when the Group becomes a party to the contractual provisions of
the instrument. Financial instruments are recognised initially at fair value and are derecognised on the date when the
Group is no longer a party to the contractual provisions of the instrument.
i) Trade and other receivables
Trade and other receivables that are short term in nature are stated at their cost less impairment losses (see
accounting policy g).
ii) Trade payables
Trade and other payables that are short term in nature are stated at unamortised cost.
iii) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and that form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows.
iv) Hedging of net investment in foreign operations
The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation that is
determined to be an effective hedge is taken to the foreign exchange reserve. The ineffective portion is recognised
immediately in profit or loss.
v) Financial guarantees
Financial guarantees issued by the Company and other entities within the Group are recognised as financial
liabilities at the date the guarantee is issued. Liabilities arising from financial guarantee contracts, including
Company guarantees of subsidiaries through deeds of cross guarantee, are initially recognised at fair value and
subsequently at the higher of the amount determined in accordance with the Group’s provisions accounting policy
(please refer to note 1.k) and the amount initially recognised less cumulative amortisation.
vi) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value, less attributable transaction costs. Subsequent to
initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective
interest basis.
86 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
vii) Derivative financial instruments
Derivatives are initially recognised at fair value on the data the contract is entered into and subsequently
remeasured in future periods at fair value. The method of recognising the resulting change in fair value is
dependent on whether the derivative is designated as a hedging instrument.
The Group has entered into interest rate derivatives as a means of hedging interest rate risk. The effective part of
the change in fair value of these derivatives is recognised directly in equity. Any ineffective portion is recognised
immediately in the income statement. Amounts accumulated in equity are recycled to the income statement in the
periods when the hedged items will affect profit and loss. Where hedge accounting is not applied, movement in
fair value are recognised in the income statement. The fair value of interest rate swaps is the estimated amount
that the Group would receive or pay to terminate the swap at the balance sheet date.
i) Dividends
Dividends are recognised as a liability in the period in which they are appropriately authorised and are no longer at
the discretion of the entity.
j) Employee benefits – Share-based payment transactions
The share option scheme and the share acquisition plan allow Group employees to acquire shares of the Company.
The fair value of options and rights granted is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and spread over the period during which the employees become
unconditionally entitled to the options and rights. The fair value of the options and rights granted are measured using
the Black-Scholes and Monte Carlo Option Pricing models respectively, taking into account the terms and conditions
upon which the options were granted.
For cash-settled share-based payments, a liability is recognised for the services acquired, measured initially at the fair
value of the liability. At each balance sheet date until the liability is settled, and at the date of settlement, the fair value
of the liability is re-measured, with any changes in fair value recognised in profit and loss in the year.
k) Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle
the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability.
i) Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan,
and the restructuring has either commenced or has been announced publicly. Future operating costs are not
provided for.
ii) Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a
contract are lower than the unavoidable cost of meeting its obligations under the contract.
l) Deferred consideration
Deferred consideration relates to agreed payments to the vendors of a business acquired that are payable after
completion. Where a portion of consideration for an acquisition is deferred to a date more than one year after the
end of the current financial year, that portion of deferred consideration is discounted to its present value, if the effect
of the time value of money is material. The amount, by which that portion of deferred consideration is discounted, is
charged to interest payable over time.
m) Contingent consideration
Contingent consideration relates to payments to the vendors, payable after completion, that are dependent on the
outcome of future events. It is initially measured at its fair value on the date of acquisition and is restated to fair value
at each subsequent period end, with movements charged or credited to the income statement.
Tarsus Group plc 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
i) Put call option liabilities
Liabilities arising from written put options over shares held by non-controlling interests are initially recognised at
the present value of the redemption amount. If the risks and rewards of ownership of the non-controlling interest
are transferred to the group then the minority interest is first reduced to nil with any excess recognised as a
reduction in equity attributable to equity holders of the parent. Unwinding of the discount on the liability is
recognised as a finance cost. Any changes in the value of the liability arising from changes in the estimated
redemption amount is also recognised as a finance cost.
n) Revenue and cost recognition on events
Revenue represents amounts invoiced in respect of completed exhibitions and conferences, together with related
publishing revenue and new media revenues, exclusive of value added tax. Advance payments by customers are
recorded as deferred income. Revenues are recognised in the income statement when the significant risks and
rewards have been transferred to the buyer and the company has no further managerial involvement. No revenue is
recognised if there are significant uncertainties regarding recovery of the consideration due or associated costs or the
amounts cannot be reliably measured.
i) Traditional media
Profit is recognised when an event is completed. As such, billings and cash received in advance and directly related
costs arising in the year relating to uncompleted and future events are deferred until the events are completed.
The amounts so deferred are included in the statement of financial position as deferred income or prepaid event
costs. Losses are recognised in the income statement account in the period the loss is first anticipated.
ii) New media
The revenue streams that relate to a period of time have an ongoing obligation and, therefore, are recognised
over the period to which they relate. Those revenue streams that have no ongoing obligation are recognised at the
invoice date.
o) Expenses
i) Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total
lease expense.
ii) Finance costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method,
interest receivable on funds invested, foreign exchange gains and losses, and gains and losses on hedging
instruments that are recognised in the income statement (see accounting policy h).
Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the
asset. Dividend income is recognised in the income statement on the date that the dividend is declared and becomes
legally receivable.
p) Taxation
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the
income statement except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the year end and any adjustments in respect of prior years.
Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts for taxation purposes. The following
temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets
or liabilities that affect neither accounting nor taxable profit and the differences relating to investments in subsidiaries
to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax
enacted or substantively enacted at the year end.
88 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability
to pay the related dividend.
Critical accounting judgements and key sources of estimation uncertainty:
In the process of applying the Group’s accounting policies, the following judgements and assumptions have been
made by management and have the most significant effect on the amounts recognised in the financial statements or
have the most risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Goodwill and intangibles
Significant accounting judgements made in the preparation of the financial statements relate to the allocation of the
purchase price of acquisitions between intangibles and goodwill as required under IFRS 3 “Business combinations”
and the determination of the useful lives of the intangible assets. The key assumptions used in estimating the net
present value of the additional future cash flows are the discount rate, royalty rate, attrition rate and the period over
which the intangible assets affect future cash flows.
The review of potential impairment is an area where significant accounting estimates and judgements are made.
Further details of assumptions used can be found in note 12.
Contingent consideration
Contingent consideration is recognised in the accounts as a liability based on accounting estimates and judgements
on future revenue streams and put option liabilities. Estimated future cash flows are discounted in calculating fair
value.
2. SEGMENTAL ANALYSIS
IFRS 8 ‘Operating Segments’ requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the Board in order to allocate resources to the segments and
to assess their performance.
The Group’s reportable segments, which are those reported to the Board, are the operating businesses managed by
geographically based management teams responsible for their performance. The Board uses Adjusted Profit Before
Tax as a key metric to monitor the performance of the business.
As at 31 December 2015, the Group was organised into three main segments – Europe, USA and Emerging Markets.
The main activities of all segments are the production of exhibitions supported by other media activities related to
those exhibitions.
Tarsus Group plc 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. SEGMENTAL ANALYSIS (CONTINUED)
The following table sets out the revenue and profit information and certain asset and liability information for the
Group’s reportable segments:
Revenue by sector
Total Revenue
Less: Revenue from discontinued operations
Group Revenue from continuing operations
Profit/(loss) from operating activities
Net financing costs
Profit/(loss) before taxation
Total adjusting items - note 3
Adjusted profit from discontinued operations - note 3
Adjusted profit/(loss) before tax
Segment non-current assets
Segment current assets
Deferred tax assets
Total assets
Segment liabilities
Liabilities for current tax
Deferred tax liabilities
Total liabilities
90 Tarsus Group plc
Emerging
Markets
£000
31 December 2015
Central
USA
Europe
Costs
£000
£000
£000
43,562
–
25,401
–
17,914
(4,924)
–
–
14,954
–
11,386
–
3,710
–
(5,559)
(5,422)
43,562
14,954
–
–
25,401
11,386
–
–
14,954
11,386
92,042
76,432
75,112
16,930
(49,460)
66,835
9,597
(26,280)
12,990
–
3,710
94
306
(10,981)
6,851
–
9,680
13,875
–
–
4,110
23,555
(68,845)
(4,130)
–
–
Group
£000
86,877
(4,924)
81,953
24,491
(5,422)
19,069
6,945
306
26,320
151,627
40,402
192,029
2,503
194,532
(144,585)
(1,510)
(8,505)
(154,600)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. SEGMENTAL ANALYSIS (CONTINUED)
Revenue by sector
Total Revenue
Less: Revenue from discontinued operations
Group Revenue from continuing operations
Profit/(loss) from operating activities
Net financing costs
Profit/(loss) before taxation
Total adjusting items - note 3
Adjusted profit from discontinued operations - note 3
Adjusted profit/(loss) before tax
Segment non-current assets
Segment current assets
Deferred tax assets
Total assets
Segment liabilities
Liabilities for current tax
Deferred tax liabilities
Total liabilities
Emerging
Markets
£000
31 December 2014
Central
USA
Europe
Costs
£000
£000
£000
Group
£000
23,736
–
24,557
–
12,275
(9,694)
–
–
–
50,874
7,323
–
11,694
–
169
–
(8,507)
(3,569)
10,679
(3,569)
(3,299)
16,952
23,736
7,323
–
–
24,557
11,694
–
–
7,323
11,694
91,930
65,349
70,468
21,462
(51,962)
55,237
10,112
(16,804)
2,581
169
(100)
1,164
(12,076)
8,778
–
18,254
12,951
–
–
1,233
31,205
(75,454)
–
–
60,568
(9,694)
7,110
8,678
1,164
143,959
44,525
188,484
5,006
193,490
(144,220)
(3,689)
(8,048)
(155,957)
91
Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. PROFIT AND LOSS ANALYSIS
The following analysis illustrates the performance of the Group’s activities and reconciles the Group’s pre-tax profit
to adjusted profit. Adjusted results are presented to provide an indication of underlying financial performance and to
reflect how the business is managed and measured on a day-to-day basis. The adjusted profit before tax excludes
exceptional costs, share option charges, amortisation and impairment charges, profit on sale of subsidiary, profit or
loss on disposal of tangible and intangible assets and adjustments to contingent consideration.
2015
£000
Adjusting items:
Exceptional (credit)/debit*
Share option charge
Amortisation charge (excluding amounts charged to costs of sale)
Loss/(gain) on disposal of tangible fixed assets
(2,297)
1,706
3,721
93
Tax on joint venture profits
Unwinding of discount
288
3,434
Total adjusting items in operating costs
Total adjusting items
Profit before tax
Adjusted profit before tax from discontinued operations
Adjusted profit before tax
Tax thereon
Adjusted profit after tax
3,223
6,945
19,069
306
26,320
(3,819)
22,501
2014
£000
2,013
1,180
3,213
(24)
6,382
412
1,884
8,678
7,110
1,164
16,952
(2,546)
14,406
*In 2015, the Group incurred exceptional one-off costs resulting from acquisitions, potential acquisitions and business
integration of £1.7m. A £4.0m credit was booked against the carrying value of the put/call option and contingent
consideration liabilities.
Unwinding of discount is interest on contingent consideration and put / call liabilities caused by discounting on initial
recognition of the liability.
4. OPERATING PROFIT
Operating profit is stated after charging:
Depreciation
Amortisation charge
Auditor’s remuneration:
– audit of Group financial statements
– audit of financial statements of subsidiaries pursuant to legislation
– other services – corporate finance transactions
Loss/(gain) on disposal of tangible fixed assets
Lease rentals – property
Lease rentals – other
Foreign exchange (gains)/losses
92 Tarsus Group plc
2015
£000
434
5,169
118
99
52
93
831
5
(197)
2014
£000
535
4,504
172
72
147
(24)
887
4
12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. PERSONNEL EXPENSES AND NUMBERS
The average number of persons employed by the Group, including executive directors, during the year was:
Senior management
Sales, marketing and operations
Publishing
Internet
Finance and administration
Wages and salaries
Social security costs
Equity settled transactions (note 20)
Pension costs
Health care
2015
Number
2014
Number
384
411
53
216
18
12
85
2015
£000
15,472
1,104
1,706
34
329
18,645
50
239
19
13
90
2014
£000
13,486
1,063
1,180
–
269
15,998
The aggregate directors’ remuneration for 2015 is £1,920,044 (2014: £2,004,284). Details in relation to Directors’
Remuneration are set out in the section of the Directors’ Remuneration Report on pages 62 to 70.
6. OPERATING COSTS
Cost of sales
Amortisation of intangible assets
Administration expenses
7. NET FINANCE COSTS
Bank interest payable
Bank interest receivable
Unwinding of discount
Net finance costs
2015
£000
32,151
5,169
20,925
2014
£000
20,520
4,504
15,869
58,245
40,893
2015
£000
2014
£000
2,093
(105)
3,434
5,422
1,793
(108)
1,884
3,569
Tarsus Group plc 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. INCOME TAX EXPENSE
2015
£000
2014
£000
Corporation tax:
Overseas tax on profits for the period
Adjustments to overseas corporation tax in respect of previous periods
2,365
(1,566)
2,734
(628)
Deferred tax:
Origination and reversal of timing differences
Adjustment in respect of previous periods (tax losses recognised)
Adjustments in respect of previous periods (timing difference recognised)
357
(1)
1,021
215
–
(615)
2,176
1,706
Current tax charge for the period
Total deferred tax
Tax charge for the year
Current tax charge for the period for discontinued operations
799
1,377
26
2,106
(400)
(284)
Irish Corporation tax is calculated at 25% (2014: 25%) of the estimated taxable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The tax charge below differs from the tax at the effective rate on the profit for the year. The differences are explained
below:
Profit before taxation
Tax on profit on ordinary activities at 25% (2014 – 25%)
Effects of:
Net expenses not deductible
Current period losses unrecognised
Tax effect of share of results of associates
Utilisation of brought forward losses unrecognised
Effect of tax rates in overseas jurisdictions
Over provision in respect of prior periods
Current period credit for current and historic exposures
Other items
Tax on profit on ordinary activities
94 Tarsus Group plc
2015
£000
2014
£000
19,069
7,110
4,767
1,778
654
127
(288)
(274)
(2,603)
(547)
(460)
800
2,807
(104)
(175)
(80)
(667)
(1,529)
(875)
551
2,176
1,706
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. INCOME TAX EXPENSE (CONTINUED)
Tax credit recognised directly in equity
Current tax on exercised employee share options
Deferred tax on losses and prepaid expenses
Deferred tax on intangible assets
Deferred tax on unexercised employee share options
Total tax recognised in equity
9. DIVIDENDS
Dividend paid in cash or scrip
2014/2013 interim dividend (2.4p/2.3p per share)
2014/2013 final dividend (5.4p/5.0p per share)
Dividend paid and proposed post year end
2015/2014 interim dividend paid (2.5p/2.4p per share)
2015/2014 final dividend proposed (5.9p/5.4p per share)
2015
£000
2014
£000
(866)
(208)
2015
£000
2014
£000
2,416
5,469
2,179
4,996
532
–
(1,134)
(264)
557
(23)
(292)
(450)
7,885
7,175
2,530
6,024
2,416
5,494
8,554
7,910
An interim dividend of 2.5p per share (2014: 2.4p) was paid on 15 January 2016 to shareholders on the Register of
Members of the Company as at 4 December 2015.
The directors announced the proposed final dividend for 2015, of 5.9p per share, on 2 March 2016. Subject to approval
at the Annual General Meeting on 20 June 2016, the proposed date of payment is 7 July 2016 to Shareholders on the
Register of Members as at 27 May 2016.
Dividends are recognised as a liability in the period in which they are appropriately authorised and are no longer at
the discretion of the entity.
10. EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Adjusted earnings per share
Adjusted diluted earnings per share
2015
Pence
14.4
14.4
21.4
21.3
2014
Pence
5.0
5.0
12.7
12.6
Basic earnings per share
Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the year (as
shown on the Consolidated Income Statement) and the weighted average number of ordinary shares in issue during
the period (see below table).
Tarsus Group plc 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. EARNINGS PER SHARE (CONTINUED)
Diluted earnings per share
Diluted earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the year
(as shown on the Consolidated Income Statement) and the diluted weighted average number of ordinary shares in
issue during the period (see below table).
Adjusted earnings per share
Adjusted earnings per share is calculated using adjusted profit after tax as reconciled in note 3 and the weighted
average number of ordinary shares (as above) in issue in the year.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated using adjusted profit after tax as reconciled in note 3 and the
weighted average number of diluted ordinary shares (as above) in issue in the year.
Weighted average number of ordinary shares (diluted):
Weighted average number of ordinary shares
Dilutive effect of share options
Weighted average number of ordinary shares (diluted)
2015
Number
101,088,069
289,250
101,377,319
2014
Number
99,643,016
540,814
100,183,830
Dilutive and anti-dilutive share options were determined using the average closing price for the period. The average
share price used was 218.83 pence.
96 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. PROPERTY, PLANT AND EQUIPMENT
Computer
equipment
£000
Motor
vehicles
£000
Fixtures
and fittings
£000
At 31 December 2014
Additions
Disposals
Foreign exchange
2,358
457
(625)
(12)
108
–
(74)
(11)
1,826
21
(738)
(31)
4,292
478
(1,437)
(54)
DEPRECIATION
At 1 January 2014
Charge for the year
Disposals
Foreign exchange
2,274
420
(811)
(2)
(10)
16
29
(1)
1,058
99
(69)
11
3,322
535
(851)
8
COST
At 1 January 2014
Additions
Disposals
Foreign exchange
At 31 December 2015
At 31 December 2014
Charge for the year
Disposals
Foreign exchange
At 31 December 2015
NET BOOK VALUE
At 31 December 2013
At 31 December 2014
At 31 December 2015
2,906
243
(785)
(6)
2,178
85
89
(65)
(1)
23
1,570
323
(80)
13
1,078
Total
£000
4,561
655
(930)
6
3,279
1,881
344
(595)
(2)
34
11
(14)
(8)
1,099
79
(429)
(25)
3,014
434
(1,038)
(35)
632
95
512
1,239
1,628
477
550
23
74
–
724
727
354
2,375
1,278
904
Tarsus Group plc 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. INTANGIBLE ASSETS
COST
At 1 January 2014
Additions through business acquisition
Additions
Foreign exchange
At 31 December 2014
Additions through business acquisition
Additions
Disposals
Foreign exchange
At 31 December 2015
AMORTISATION
At 1 January 2014
Charge for the year
Foreign exchange
£000
Trademarks,
lists and other
£000
113,579
6,180
340
(17,566)
(810)
52,408
4,967
1,088
(4,197)
1,754
Goodwill
91,622
20,640
–
1,317
Goodwill and impairment
165,987
11,147
1,428
(21,763)
944
157,743
11,701
–
(750)
22,886
4,504
890
34,587
4,504
140
NET BOOK VALUE
At 31 December 2013
At 31 December 2015
132,554
29,192
1,121
3,120
56,020
10,951
1,800
–
(11,951)
(667)
At 31 December 2014
£000
101,723
At 31 December 2014
Impairment
Charge for the year
Disposals
Foreign exchange
At 31 December 2015
40,932
8,552
1,121
1,803
Total
133
28,280
–
5,169
(3,841)
875
30,483
39,231
1,800
5,169
(15,792)
208
79,921
18,046
97,967
102,628
101,590
24,128
25,537
30,616
126,756
127,127
The goodwill of £101.6 million relates to certain assets that cannot be separated from the acquiree, due to their
nature. These items include sector knowledge, access to new markets and the anticipated future profitability that the
Group can bring to the businesses and events acquired.
The Group tests goodwill annually for impairment. The carrying value of goodwill represents amounts related to
several cash-generating units (“CGU”).
The recoverable amounts of the CGU are determined from value in use calculations. 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 during the period. Management estimates discount rates using pre-tax rates that reflect current market
assessment of the time value of money and the risks specific to each CGU. The growth rates are based on
management’s forecasts for the three years to 2018, supported by industry forecasts. Cash flow forecasts are prepared
from the most recent financial plans approved by the Board. Growth rates of 3% have been applied to periods beyond
the three year management supplied figures (2014: 3%). Management have made the judgement that this long-term
growth rate does not exceed the long-term average growth rate for the industry.
The pre-tax rate used to discount cash flow forecasts for the Group is 8.7% (2014: 9.09%). Management have applied
country specific rates which vary from 7.93% - 10.55%.
98 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. INTANGIBLE ASSETS (CONTINUED)
The sensitivity tests were run against the base numbers:
•
•
Calculation of discounted NPV at the Group calculated WACC +2% to check that there is sufficient headroom in
the WACC numbers; and
NPV calculated using revenue figures 3% lower than the forecast submissions for 2016-2018, with no
corresponding cost savings assumed.
The sensitivity tests indicate no further impairment to be necessary, thus satisfying ourselves that there is sufficient
headroom in the final goodwill values.
As at 31 December 2015, the following units were carrying significant amounts of intangible assets:
Goodwill
Trademarks
Lists
Other
As at 31 December 2015
As at 31 December 2014
Medical
£000
France
£000
56,870
–
43,459
11,105
2,306
–
44,273
–
–
–
–
8,486
F&E
£000
Off-Price
£000
Turkey
£000
Other*
£000
17,639
7,600
19,613
25,405
13,354
903
313
3,069
18,110
7,600
–
–
–
7,199
17,682
1,511
420
–
23,622
19,495
3,771
388
1,751
25,066
Total
£000
101,590
17,290
3,427
4,820
127,127
126,756
*The main components of “Other” are Labels, D H Publishing, Tarsus Travel and TSNN.
Intangible assets
Intangible assets consist of trademarks and customer lists acquired in business combinations or separately and
represent their fair value at the date of acquisition.
Amortisation
The trademarks and customer lists have been determined to have definite useful lives and are being amortised, over
20 years and 10 years respectively, on a straight-line basis.
The remaining amortisation period for trademarks in MCII is 11 years, F&E 3 years and Turkey 16 years. For lists, the
remaining amortisation period in MCII is 1 year, F&E 2 years and Turkey 6 years.
An amortisation expense of £5.2 million (2014: £4.5 million) and impairment charge of £1.8m (2014: £nil), has been
recorded in the current period income statement.
Tarsus Group plc 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. INVESTMENT IN JOINT VENTURES
The nature of the activities of all Tarsus Group plc’s joint ventures is engaging in exhibitions, which are seen as
complementing the Group’s operations and contributing to achieving the Group’s overall strategy.
Details of joint ventures
Detail of each of the Group’s material associates at the end of the reporting period are as follows:
Name of associate
Tarsus Jiuzhou Exhibition and
Convention Company Limited
(‘’GZ Auto’’)
E.J. Krause Tarsus Events LLC
(‘’EJ Krause’’)
AMB Tarsus Exhibitions
SDN BHD (‘’AMB’’)
Principal activity
Place of
incorporation
and principal
place of
business
Proportion of ownership
interest/voting rights held
by the Group
31/12/2015
31/12/2014
Trade exhibitions
China
50%
50%
Trade exhibitions
USA/Mexico
50%
50%
Trade exhibitions
Malaysia
50%
NA
Pursuant to a shareholder agreement, the Group has the right to cast 50% of the votes at shareholder meetings of
the above companies.
All the above associates are accounted for using the equity method in these consolidated financial statements as set
out in the Group’s accounting policies in note 1.
Investment as at 1 January 2015
Acquisition
Profit for the period
Less: Dividends received
Foreign exchange
GZ Auto
£000
E J Krause
£000
11,780
3,497
11,862
–
(70)
–
(12)
Investment as at 31 December 2015
AMB
£000
4,062
–
249
(975)
161
–
7,714
604
–
–
8,318
Total
£000
15,924
7,714
783
(975)
149
23,595
The other summary information below in respect of the Group’s material associates represents amounts included in
the IFRS financial statements of the associate, not the entity’s share of these amounts, although they are adjusted to
reflect fair value adjustments upon acquisition or accounting policy alignments.
2015
£000
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the
Company
100 Tarsus Group plc
GZ Auto
2014
£000
AMB
2015
£000
1,865
7,264
(2,798)
–
1,843
5,774
(15)
–
1,634
509
(59)
–
6,331
7,602
2,084
2014
£000
2015
£000
4,951
5
(3,408)
–
4,641
–
(3,074)
–
1,548
1,567
E J Krause
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. INVESTMENT IN JOINT VENTURES (CONTINUED)
As at 31 December 2015
Revenue
GZ Auto
£000
E J Krause
£000
57
(196)
499
–
3,388
Profit before tax
Taxation
Profit/(loss) after tax
Revenue
2,230
7,377
499
1,207
1,567
Profit before tax
Taxation
Profit after tax
1,586
(379)
GZ Auto
£000
E J Krause
£000
AMB
£000
410
(175)
1,810
(648)
–
–
3,485
235
Total
£000
1,759
(139)
As at 31 December 2014
AMB
£000
5,195
1,162
2,142
(575)
Total
£000
–
8,680
–
1,397
2,220
(823)
14. DEFERRED TAX
Temporary differences between the carrying value of assets and liabilities in the statement of financial position and
their relevant value for tax purposes result in the following deferred tax assets and liabilities:
Tangible assets
Intangible assets/goodwill
Provisions
Prepaid expenses
Unexercised employee share
options
Tax losses
2014
£000
(1)
1,178
15
2,590
Reclassification to
discontinued
operations
£000
–
–
(15)
–
1,004
220
–
(220)
Tangible assets
Intangible assets
Prepaid expenses
–
(8,043)
(5)
–
–
–
Total deferred tax assets
and liabilities
(3,042)
Deferred tax assets
Deferred tax liabilities
5,006
(8,048)
Movement
in temporary
differences
recognised
in income
£000
(9)
34
–
(2,095)
(33)
109
Foreign
exchange
movements
recognised
in income
£000
(1)
–
–
101
–
–
(235)
(1,994)
100
–
568
–
(235)
–
568
–
(1,426)
Balance
Movement
Sheet in temporary
reclassifidifferences
cation
in equity
£000
£000
2015
£000
11
(2)
–
(5)
–
(115)
–
–
–
1,095
–
591
5
(379)
2,503
1
–
(264)
–
708
109
–
–
–
(6)
(5)
5
–
(6)
(1,019) (8,499)
–
–
100
(1)
(1,398) (6,002)
(6)
(1,019) (8,505)
Tarsus Group plc 101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. DEFERRED TAX (CONTINUED)
2013
£000
Recognised
in
goodwill
£000
1,561
34
–
–
(107)
247
Tangible assets
Intangible assets/goodwill
Provisions
Prepaid expenses
Unexercised employee share
options
Tax losses
25
1,069
14
–
Intangible assets
Prepaid expenses
(6,161)
1,712
(1,217)
–
Total deferred tax assets
and liabilities
(1,746)
(1,217)
Deferred tax assets
Deferred tax liabilities
Movement
in temporary
differences
recognised
in income
£000
2,703
(4,449)
–
–
–
–
–
(1,217)
(50)
53
1
–
Balance
Movement
Sheet in temporary
reclassifidifferences
cation
in equity
£000
£000
24
–
–
2,590
2014
£000
–
56
–
–
(1)
1,178
15
2,590
(455)
5,006
–
–
(450)
(61)
(317)
859
–
(2,614)
(348)
38
(8,043)
(5)
686
–
(765)
(3,042)
144
542
2,614
(2,614)
(310)
1,004
220
(8,048)
Deferred tax assets have not been recognised in respect of certain tax losses because it is not probable that future
taxable profits will be available which will allow the Group to use the potential tax benefits related to these losses.
Where a temporary difference arises between the tax base of employee share options and their carrying value, a
deferred tax asset should be recognised.
To the extent that the future tax deduction exceeds the related cumulative IFRS 2 Share-based Payment (“IFRS 2”)
expense, the excess of the associated deferred tax balance is recognised directly in equity. To the extent that the tax
deduction matches the cumulative IFRS 2 expense, the associated deferred tax balance is recognised in the income
statement.
Unrecognised deferred tax asset
Capital losses
Trade losses
Non-trade losses
15. TRADE AND OTHER RECEIVABLES
Trade debtors
Prepaid event costs
Prepayments and accrued income
Other debtors
2015
£000
2014
£000
1,758
1,434
2015
£000
2014
£000
384
162
1,212
20,183
4,756
2,777
1,993
29,709
384
102
948
19,869
3,749
6,014
2,546
32,178
Trade debtors disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
See note 23 for more details.
102 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
16. CASH AND CASH EQUIVALENTS
Cash at bank
Cash and cash equivalents
17. TRADE AND OTHER PAYABLES
Trade creditors
Other taxes and social security
Fair value of interest rate swaps
Other creditors
Accruals
Current contingent consideration
2015
£000
2014
£000
10,693
12,347
2015
£000
2014
£000
10,693
5,134
537
1,080
1,182
11,578
8,025
27,536
12,347
6,933
1,207
818
5,822
6,002
7,879
28,661
Trade creditors and accruals comprise amounts outstanding for trade purchases and ongoing costs. The Directors
consider that the carrying amount of trade creditors approximates to their fair value. See note 23 for more details.
18. OVERDRAFTS AND OTHER INTEREST-BEARING LOANS AND BORROWINGS
This note provides an analysis of and information about the contractual terms of the Group’s interest-bearing loans
and borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see note
23. During the year the Group’s banking facilities were extended through to 2020 with improved terms.
The Group’s net debt at 31 December 2015 was £43.8 million (2014: £38.4 million). The repayment profile of the
Group’s loans and overdrafts was as follows:
Two to five years
Bank loans
2015
£000
2014
£000
54,350
50,957
Cash balances
(10,693)
(12,347)
(930)
1,080
(1,018)
818
Total financial liabilities
Net financial liabilities and cash balances
Capitalised bank fees
Fair value of interest rate swaps (note 17)
Net debt
54,350
43,657
43,807
50,957
38,610
38,410
Tarsus Group plc 103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
18. OVERDRAFTS AND OTHER INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
Current liabilities
Secured bank loans
Non-current liabilities
Total financial liabilities
2015
£000
2014
£000
54,350
50,957
–
54,350
–
50,957
The bank loans are secured by a fixed and floating charge over the undertakings and property of certain subsidiaries.
The parent and subsidiaries also act as guarantors for the loans. The security provided is the equity of all subsidiary
operations and therefore the carrying value of securitised assets is equivalent to the Group net assets.
19. NON-CURRENT LIABILITIES – OTHER PAYABLES
Contingent consideration
Provisions
Long term license fee
Put and call option liabilities over non-controlling interests
2015
£000
15,403
49
4,096
18,816
38,364
2014
£000
8,928
56
5,582
21,387
35,953
The put and call options relate to the acquisitions of Life Media, CYF Fuarcilik, Sada Komatek, SIUF, 3D Print and PTIA.
20. EMPLOYEE BENEFITS
Share-based payments
The Group has established a share option plan that entitles all employees to purchase shares in the Company. During
2015, further grants under the plan were made. In accordance with the scheme rules options are exercisable at the
market price of the shares at the date of the grant once all vesting conditions have been met. Generally options vest
over three years and include performance conditions related to the market price of the Company’s shares. All options
expire after 10 years. The Group has also established a long-term Share Acquisition Plan and Incentive Plans.
The terms and conditions of the plans are set out in the section of the Directors’ Remuneration Report. All options
are settled by physical delivery of shares.
104 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
20. EMPLOYEE BENEFITS (CONTINUED)
The number and weighted average exercise prices of share options and rights are as follows:
Outstanding at the beginning of the period
Forfeited during the period
Exercised during the period
Granted during the period
Outstanding at the end of the period
Exercisable at the end of the period
Weighted
average
exercise
price
(pence)
2015
2015
Weighted
average
exercise
price
(pence)
2014
4,679,060
95
Number of
options
and rights
129
77
91
79
6,431,588
(1,140,077)
(1,891,386)
1,278,935
130
712,500
96
Number of
options
and rights
2014
141
12
23
105
6,588,166
(118,151)
(1,330,154)
1,291,727
129
1,215,082
6,431,588
Option
range
Number of
outstanding
options
and rights
Total
4,679,060
38p to 100p
101p to 300p
2,291,256
2,387,804
The fair value of services received in return for share options and rights granted are measured by reference to the
fair value of share options and rights granted. The estimate of the fair value of the services received is measured
based on the Black-Scholes and Monte Carlo Option Pricing models and expectations of early exercise are
incorporated into this model. There are certain market conditions within the share option grants and additional nonmarket conditions for the Share Acquisition Plan. The likelihood of these conditions being met are incorporated in
measuring the fair value of the options at their grant date.
The weighted average remaining contractual life of share options outstanding at the year end was 3.14 years.
Tarsus Group plc 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
20. EMPLOYEE BENEFITS (CONTINUED)
Fair value of share options and rights
Fair value for option or right at grant date (pence)
Weighted average share price at date of grant (pence)
Weighted average exercise price (pence)
Expected volatility
Option/right life
Expected dividends
Risk-free interest rate
Grant
date
09-Mar15
198
220
0
25.61%
3 Years
3.50%
1.1000%
Grant
date
09-Mar15
33
220
227
26.58%
5 Years
3.50%
1.5300%
Grant
date
25-Mar14
193
208
0
27.60%
3 Years
3.40%
1.3824%
Grant
date
05-Mar14
39
208
213.8
28.70%
5 Years
3.40%
2.2445%
Grant
date
24-Jun14
203
223.8
0
26.20%
3 Years
3.20%
1.6212%
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of
the share options), adjusted for any expected changes to future volatility due to publicly available information.
During the current period, £1.7m has been included within the income statement as a charge (2014: £1.2m).
The Group makes available a stakeholder pension scheme in accordance with its legal obligations, but does not itself
offer any Group pension scheme.
21. CALLED UP SHARE CAPITAL
Authorised:
Ordinary shares of 5p each
Allotted, called up and fully paid:
At 1 January
Scrip dividend
Issue of shares
Exercise of share options
At 31 December
2015
Number
000
120,000
2015
£
£000
6,000
2014
Number
000
120,000
6,000
101,200
117
–
512
5,060
6
–
25
95,948
87
5,000
165
4,797
5
250
8
101,829
5,091
101,200
2014
£
£000
5,060
All shares are ordinary shares which have full voting rights and rights to dividends. Ordinary shareholders have the
right to return of capital only in a solvent liquidation.
There are no shares reserved for issuance under the Group’s share option plan or for issuance relating to deferred
consideration on acquisitions.
As at 31 December 2015, 601,588 ordinary shares of 5.0p each were held in employee benefit trusts in relation to
awards made under the Tarsus Group Long Term Share Acquisition Plan 2008.
During the year ended 31 December 2015, 511,822 ordinary shares of 5.0p each were issued under the Company’s
employee share scheme.
106 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
22. OPERATING LEASES
The Group has lease agreements in respect of properties and office equipment, for which the payments extend over
a number of years. Significant leases relate to the rental of the companies’ main offices. The total gross payments over
the life of these leases, split by expiry date and type, are as follows:
At 31 December 2015
Within one year
Within two to five years
Over five years
At 31 December 2014
Within one year
Within two to five years
Property
£000
Other
£000
1,930
84
677
1,234
19
Total
£000
49
35
–
726
1,269
19
Property
£000
Other
£000
Total
£000
1,976
109
801
1,175
43
66
2,014
844
1,241
2,085
23. FINANCIAL INSTRUMENTS
Exposure to credit, interest rate, currency and liquidity risk arises in the normal course of the Group’s business. The
Group’s overall strategy to minimise this risk is discussed below.
Objectives, policies and procedures
Treasury operations are conducted within a framework of policies and guidelines authorised by the Board and are
subject to internal control procedures. The objectives of the framework are to provide flexibility whilst minimising
risk and prohibiting speculative transactions or positions to be taken.
The Group’s principal financial instruments comprise bank loans, overdrafts, cash and interest rate swaps. The main
purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other
financial assets and liabilities such as trade receivables and trade payables and consideration, which arise from its
operations.
The main risks arising from the Group’s financial instruments are credit, interest rate, currency and liquidity risks. The
Board reviews and agrees policies for managing these risks and they are summarised below.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group
does not require collateral in respect of financial assets.
At the year end, there were no significant concentrations of credit risk. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset in the statement of financial position. The Group invests
some of its surplus funds in high quality liquid market instruments with a maturity no greater than three months. To
reduce the risk of counterparty default the Group deposits its surplus funds in approved high quality banks. The
countries in which the Group operates do not always have banks with high credit ratings assigned by the international
credit rating agencies. In these situations, the Group aims to reduce the exposure to credit risk by minimising cash
balances held in these banks. Concentrations of credit risk with respect to customers are limited due to the Group’s
customer base being large and unrelated and in various geographical areas. Customers are assessed for
creditworthiness and credit limits are imposed on customers and reviewed regularly.
Tarsus Group plc 107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23. FINANCIAL INSTRUMENTS (CONTINUED)
Interest rate risk
The Group’s exposure to risk for changes in market interest rates relates primarily to the Group’s debt obligations and
the Group’s cash and cash equivalents. The Group minimises that risk by using a series of short and medium-term
interest rate fixes and specific hedging instruments on its external bank debt including anticipated future debt drawdowns. Approximately 82% (2014: 68%) of the external bank debt was hedged in this way.
Foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency
other than sterling. The currencies giving rise to this risk are principally the US dollar, Euro, Chinese Renminbi and
Turkish Lira.
The Group uses derivative financial instruments (forward exchange contracts) to hedge the risk exposure of foreign
currencies. The use of financial derivatives is governed by the Group’s policies approved by the Board. Compliance with
policies and exposure limits is reviewed by the Board. The Group does not enter into financial instruments, including
derivative financial instruments, for speculative purposes.
The Group does not hedge all of its foreign currency risk on sales and purchases, meaning that the Group’s trading
results may be impacted by changes in prevailing exchange rates. The Group’s bank loans are currently drawn in
Sterling so they are not exposed to foreign exchange risk.
Liquidity risk
The Group’s funding strategy is to ensure that the business has sufficient resources to meet its various financial
commitments on an ongoing basis. It achieves this objective by actively monitoring its forecast cash flows and
requirements. The Group is cautious in its approach, applying appropriate sensitivities to both the quantum and
timing of its projections.
The Group manages its liquidity using operating cash deposits and external borrowing to ensure that it has sufficient
and appropriate funds to meet both its immediate and longer-term needs. Further details of external loans can be
found in note 18.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its current business, and allow it to take advantage of development
opportunities when they arise therefore allowing the Group to maximise Shareholder value at all times.
The Group manages its capital structure (Shareholders’ equity and long-term debt) and makes adjustments to it, in
light of changes in economic conditions and development opportunities. To maintain or adjust the capital structure,
the Group may adjust the dividend payment to Shareholders, return capital to Shareholders or issue new shares. No
changes were made in the objectives, policies or processes during the years ending 31 December 2015 and 31
December 2014.
Sensitivity analysis
In managing interest rate and foreign exchange risks the Group aims to reduce the impact of short-term fluctuations
on the Group’s earnings. Over the longer term, however, permanent changes in interest and foreign exchange rates
would have an impact on consolidated earnings.
It is estimated that a general increase of one percentage point in interest rates would decrease the Group’s profit
before tax for the year ended 31 December 2015 by approximately £97,000 (2014: £136,000) and equity by £83,000
(2014: £108,000).
It is estimated that a general increase of five percentage points in the value of sterling against other foreign currencies
would decrease the Group’s profit before tax for the year ended 31 December 2015 by approximately £1,328,000
(2014: £194,000) and equity by £1,075,000 (2014: £131,000).
These sensitivities are considered representative of possible volatilities in interest rates and currency exchange rates
that could be experienced in the next twelve months.
108 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23. FINANCIAL INSTRUMENTS (CONTINUED)
Estimation of fair values
The following summarises the major methods and assumptions used in estimating the fair values of financial
instruments.
i) Interest bearing loans and borrowings
Fair value is calculated based on discounted expected future principal and interest cash flows.
ii) Forward foreign currency contracts
Fair value is calculated by reference to prevailing market exchange rates and forecast currency values at maturity
date.
iii) Contingent consideration and put and call option liabilities
Fair value is calculated based on discounted expected future cash flows.
iv) Trade and other receivables/payables
The directors consider that the carrying amount of these balances approximates to their fair value.
The only allowance maintained by the Group for credit losses relate to allowances for bad and doubtful debts relating
to trade receivables. This can be summarised as follows:
Allowance for doubtful receivables
As at 1 January
Additions – charged to income statement
Allowances used
As at 31 December
Aging profile of unimpaired trade receivables
Not past due
Past due 1–30 days
Past due 31–90 days
Past due 91–120 days
Past due more than 120 days
2015
£000
2014
£000
846
1,251
(341)
863
341
(358)
2015
£000
2014
£000
11,353
3,014
3,381
826
1,609
9,203
5,338
2,374
1,102
1,852
1,756
20,183
846
19,869
Trade receivables presented in the Statement of Financial Position are net of allowances for doubtful receivables. The
allowance for doubtful receivables is estimated by the Group’s management based on prior experience, individual
credit issues and an assessment of the current economic situation. Trade receivables comprise balances from a large
number of individual customers, in many diverse industries and geographical areas. The Group’s exposure to credit
risk is therefore affected by the individual customer characteristics.
The Group makes an allowance for doubtful allowances when there is objective evidence that the debt will not be
collected in full. The allowance is recognised and measured as the difference between the asset’s carrying amount and
the present value of future cash flows.
The carrying value of all financial instruments held in the Statement of Financial Position equals their fair value.
Tarsus Group plc 109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23. FINANCIAL INSTRUMENTS (CONTINUED)
Categories of financial instruments
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Accruals
Interest rate swaps
Secured bank loans
Contingent consideration
Put and call option liabilites
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Accruals
Interest rate swaps
Secured bank loans
Contingent consideration
Put and call option liabilites
Liabilities measured at fair value
Interest rate swaps
Contingent consideration
Put and call option liabilities
Interest rate swaps
Forward Contracts
Contingent consideration
Put and call option liabilities
110 Tarsus Group plc
Loans and
receivables
£000
Financial
liabilities
measured at
amortised
cost
£000
Fair value
through
profit or loss
£000
32,869
(72,244)
(43,324)
(82,699)
Loans and
receivables
£000
Financial
liabilities
measured at
amortised
cost
£000
Fair value
through
profit or loss
£000
Total
2014
£000
34,762
(68,937)
(39,788)
(73,963)
31
December 2015
£000
Level 1
£000
Level 2
£000
Level 3
£000
(43,324)
–
(1,080)
(42,244)
22,176
10,693
–
–
–
–
–
–
22,415
12,347
–
–
–
–
–
–
(1,080)
(23,428)
(18,816)
–
–
(6,316)
(11,578)
–
(54,350)
–
–
–
–
(11,978)
(6,002)
–
(50,957)
–
–
–
–
–
–
–
–
–
(1,080)
–
(23,428)
(18,816)
–
–
(777)
–
(818)
–
(16,807)
(21,386)
(1,080)
–
–
Total
2015
£000
22,176
10,693
(6,316)
(11,578)
(1,080)
(54,350)
(23,428)
(18,816)
22,415
12,347
(12,755)
(6,002)
(818)
(50,957)
(16,807)
(21,386)
–
(23,428)
(18,816)
31
December 2014
£000
Level 1
£000
Level 2
£000
Level 3
£000
(39,788)
–
(818)
(38,970)
(818)
(777)
(16,807)
(21,386)
–
–
–
–
(818)
–
–
–
–
(777)
(16,807)
(21,386)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23. FINANCIAL INSTRUMENTS (CONTINUED)
Level 1 – fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – fair values measured using indicative market valuations provided by banks for the identifiable asset or liability
Level 3 – fair values measured using inputs or liabilities that are not based on observable market data. These are
measured by using the latest management forecasts and using a country specific WACC rate to discount to the present
value.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the Statement of Financial Position date to the expected maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows.
31 December 2015
Bank borrowings
Trade and other payables
Accruals
Contingent consideration
Put and call option liabilities
Less than
1 year
£000
–
6,316
11,578
8,025
1,510
Between 1 and
2 years
£000
–
–
–
3,935
9,025
Between 2 and
5 years
£000
54,350
–
–
11,468
8,281
Less than
1 year
£000
–
12,755
6,002
7,879
–
Between 1 and
2 years
£000
–
–
–
4,166
2,844
Between 2 and
5 years
£000
50,957
–
–
4,761
18,543
27,429
31 December 2014
Bank borrowings
Trade and other payables
Accruals
Contingent consideration
Put and call option liabilities
26,636
12,960
7,010
74,099
74,261
Effective interest rates and re-pricing analysis
In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their
effective interest rates at the year end and the periods in which they re-price.
Notes
Cash and cash equivalents
Sterling fixed
24. NON CASH ITEMS
Scrip dividend (net of cost)
16
2015
Effective
interest
rate
3.70%
Total
£000
10,693
54,350
Six
months
or less
£000
10,693
54,350
2014
Effective
interest
rate
3.39%
2015
£000
246
Total
£000
12,347
50,957
Six
months
or less
£000
12,347
50,957
2014
£000
200
Tarsus Group plc 111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
25. CAPITAL COMMITMENTS
Other than those items included in the Statement of Financial Position there were no material capital and other
financial commitments in place at the year end. Further, there was no authorised but not contracted for capital
expenditure at the year end.
26. RELATED PARTIES
Identity of related parties
Tarsus Group plc has a related party relationship with its subsidiaries (see note 27) and with its directors and executive
officers.
Directors of the Company control 10.1% (2014: 10.2%) of the voting shares of the Company.
Executive officers also participate in the Group’s share option programme.
Trading transactions:
Directors’ compensation is included in note 5 and within the Directors’ Remuneration Report.
Executive officers also participate in the Group’s share option programme.
A fee of £370k was received from Tarsus Jiuzhou Exhibition and Convention Company Limited (Joint Venture) during
the year for Show Consulting Services.
27. INTEREST IN SUBSIDIARY UNDERTAKINGS
The Company is the holding company of the Group. The following are the subsidiary companies included in the results
or net assets of the Group.
Name
Trading Companies
3D Print Show Limited
Hubei O/N Hope Exhibition Services Limited
Shenzhen Shengshi Juizhou Exhibition Co. Limited
Tarsus Shanghai Exhibition Limited, Company
F&E (2008) Limited
DH Publishing Limited
Fairs & Exhibitions (1992) Limited
F&E (2008) Limited
Tarsus Exhibitions & Publishing Limited
Tarsus Exhibitions India Private Limited
Tarsus Group Limited
Tarsus Travel Exhibitions Limited
Le Groupe Evenement SAS
Tarsus France SAS
Label Expositions Private Limited
PT Infrastructure Asia
CYF Fuarcilik A.S.
Istanbul Fuar Hizmetleri A.S.
LifeMedia Fuarcilik A.S.
Sada Uzmanlik Fuarlan Ticaret A.S.
F&E LLC FZE
Caroo Development Inc
112 Tarsus Group plc
Group holding
and voting rights
per cent
ordinary shares
Country of
registration
and
operation
60
50*
50*
100
100
100
100
100
100
100
100
100
100
100
100
51
70
100
70
60
100
100
England
China
China
China
Cyprus
England
England
England
England
India
England
England
France
France
India
Indonesia
Turkey
Turkey
Turkey
Turkey
UAE
United States
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
27. INTEREST IN SUBSIDIARY UNDERTAKINGS (CONTINUED)
Caroo USA Inc
DMS Group LLC
MCI Opco LLC
Metabolic Medical Institute Inc
Off-Price Specialists Center
Tarsus Advon Holdings, LLC
Tarsus Expositions Inc
Tarsus Cardio Inc
Tarsus Publishing Inc
Trade Show News Network Inc
GKT Events LLC
100
100
100
100
100
100
100
100
100
100
75
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
CapRegen Limited
CapRegen BioSciences Limited
CapRegen Magnum Limited
CapRegen Natural Biosciences Limited
CapRegen Nutraceuticals Limited
Fairs & Exhibitions Limited
Tarsus America Limited
Tarsus Atlantic Limited
Tarsus Cedar Limited
Tarsus China Limited
Tarsus Holdings Limited
Tarsus Investments Limited
Tarsus Leeward Limited
Tarsus Luzhniki Limited
Tarsus Martex (an unlimited company)
Tarsus Medical Limited
Tarsus Miller Hall Limited
Tarsus New Media Limited
Tarsus Organex Limited
Tarsus Overseas Limited
Tarsus Publishing Limited
Tarsus Touchstone Limited
Tarsus UK Holdings Limited
Tarsus US Limited
Tarsus Windward Limited
The W R Kern Organisation Limited
Tarsus France Holdings SAS
Tarsus Asia Pacific Limited
Tarsus Cedar (Ireland) Limited
Tarsus Ireland Finance Limited
Tarsus Ireland Investments Limited
Willismount Limited
Cedar Danismanlik Hizmetleri A.S.
Medical Conferences International Inc.
Montana Street Consultants Inc
Natural Biosciences Inc
Tarsus Atlantic Holdings LLC
Tarsus GEP Inc
Tarsus Partners
Tarsus Spacifically Inc
Tarsus US Holdings, Inc.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
France
Hong Kong
Ireland
Ireland
Ireland
Ireland
Turkey
United States
United States
United States
United States
United States
United States
United States
United States
Holding and Dormant Companies
* The Group has consolidated the results of Hubei O/N Hope Exhibition Services Limited and Shenzhen Shengshi
Juizhou Exhibition Co. Limited, in which it holds 50% of the issued share capital, as it has ultimate control over the
management and strategic direction of the company.
Tarsus Group plc 113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
28. ACQUISITION OF SUBSIDIARY
On 21 May 2015, the Group acquired 100% of the trade and assets of PAINWeek (“PAIN”), an exhibition business.
The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the
Group, in respect of this acquisition:
Book value
Adjustments
Fair value
£000
£000
£000
Other intangibles
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Deferred tax asset
Net assets acquired
Goodwill arising on acquisition
–
199
(1,357)
(169)
–
(1,327)
4,966
–
–
–
60
5,026
Consideration paid and costs incurred:
Satisfied in cash
Contingent consideration (less than one year)
Contingent consideration (over one year)
Total consideration incurred
Consideration paid in cash
Cash acquired
Total net cash outflow
4,966
199
(1,357)
(169)
60
3,699
6,179
9,878
1,767
253
7,858
9,878
1,767
–
1,767
The values used in the accounting for the identifiable assets and liabilities and related contingent consideration of this
acquisition are estimates and are therefore provisional in nature at the balance sheet date. Since the release of the
Interim Financial Statement the Group has reviewed the values used in accounting for the intangible assets, goodwill
and liabilities related to the acquisition. The change in the acquisition accounting estimates has changed due to more
accurate forecasts on the performance of PAIN, and are therefore measurement period adjustments.
From the date of acquisition to 31 December 2015, the acquisition has contributed £2.8m of revenue to the Group.
Goodwill of £6.2 million, recognised on this acquisition, relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, relationships of key staff members with customers, customer loyalty
and the anticipated future profitability that the Group can bring to the business acquired. Consistent with other media
companies, goodwill makes up a large percentage of the fair value of the acquisition.
The Group incurred transaction costs of £547,000 in respect of the acquisition, which were expensed.
114 Tarsus Group plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
29. DISPOSAL OF INVESTMENT
On 3 September 2015, the Group completed the sale of its 100% interest in Tarsus France Holdings SAS to Magellan
VI SAS for € 9.2 million (£6.5 million).
Based on the book values of the net assets disposed of, the related sales proceeds and the effect of recycling of
foreign exchange, the profit on disposal was as follows:
£000
Non-current assets
Current assets
Non-current liabilities
Current liabilities
11,828
6,489
(3,153)
(6,859)
Total carrying amount of net assets disposed
Costs on disposal
Impairment on disposal
8,305
(194)
(1,800)
Net assets at disposal date
6,311
Satisfied by:
Cash and cash equivalents
Deferred consideration
5,106
1,370
Total proceeds
6,476
Gain on disposal
(165)
The deferred consideration will be settled in cash by the purchaser in 2016.
The business was impaired by £1.8m during the year to reflect fair value.
An analysis of the results of discontinued operations is as follows:
Year to
31 December
2015
£000
Year to
31 December
2014
£000
Operating costs excluding exceptional items
Impairment loss
Exceptional operating costs
(4,618)
(1,800)
(71)
(8,529)
–
(100)
(Loss)/profit for the financial year
(1,565)
1,065
Group revenue
Total operating costs
Profit on disposal of subsidiary
4,924
(6,489)
165
9,694
(8,629)
–
(Loss)/profit before taxation
(1,400)
1,065
(Loss)/profit for the financial year from continuing operations
(1,426)
1,349
Taxation expense
(26)
284
Tarsus Group plc 115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
30. POST BALANCE SHEET EVENTS
An interim dividend of 2.5p per share was paid on 15 January 2016 to shareholders on on the Register of Members
of the Company as at 4 December 2015.
116 Tarsus Group plc
TARSUS GROUP PLC – COMPANY INCOME STATEMENT
Notes
Operating costs excluding exceptional items
Exceptional operating costs
Operating loss
Other revenue
Taxation expense
Loss for the financial year
2
2
Year to
31 December
2015
£000
Year to
31 December
2014
£000
(2,230)
(2,464)
(266)
(1,812)
Year to
31 December
2015
£000
Year to
31 December
2014
£000
(266)
(1,812)
(2,284)
54
1,964
–
Tarsus group plc – company statement of comprehensive income
Loss for the financial year
Total comprehensive loss for the year
(266)
(2,021)
(443)
652
–
(1,812)
Tarsus Group plc 117
TARSUS GROUP PLC – COMPANY STATEMENT OF FINANCIAL POSITION
Notes
NON-CURRENT ASSETS
Investments
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
CURRENT LIABILITIES
Trade and other payables
NET CURRENT LIABILITIES
3
4
5
TOTAL ASSETS LESS CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
NET ASSETS
EQUITY
Share capital
Share premium account
Retained earnings
TOTAL EQUITY
6
7
Year to
31 December
2015
£000
45,150
45,150
7,080
13
7,093
Year to
31 December
2014
£000
45,150
45,150
7,325
57
7,382
(11,252)
(2,375)
40,991
50,157
–
(672)
(4,159)
5,007
40,991
49,485
5,091
48,280
(12,380)
5,060
47,424
(2,999)
40,991
49,485
The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and
authorised for issue on 2 March 2016 and signed on its behalf by:
J D Emslie
Group Managing Director
118 Tarsus Group plc
D P O’Brien
Group Finance Director
GROUP PLC – COMPANY STATEMENT OF CASH FLOWS
Cash flows from operating activities
Loss for the year
Adjustments for:
Share option charge
Other gains/(losses)
Year to
31 December
2015
£000
Year to
31 December
2014
£000
(266)
(1,812)
1,422
(2,652)
1,180
(1,712)
Operating cash flow before changes in working capital
Decrease in trade and other receivables
Increase/(decrease) in trade and other payables
(1,496)
244
8,877
(2,344)
13,837
(13,445)
Net cash inflow/(outflow) from operating activities
7,625
(1,952)
–
–
–
(7,638)
(586)
10,000
(388)
(6,975)
13
57
Cash inflow/(outflow) generated from operations
Cash flows from investing activities
Deferred and contingent consideration paid
Proceeds from the issue of share capital
Cost of shares issued
Dividends paid to shareholders
Net cash (outflow)/inflow from investing activities
Net (decrease)/increase in cash and cash equivalents
Opening cash and cash equivalents
Foreign exchange gain
Closing cash and cash equivalents
7,625
(7,638)
(13)
57
(31)
(1,952)
2,051
99
4
(46)
Tarsus Group plc 119
TARSUS GROUP PLC –STATEMENT OF CHANGES IN EQUITY
As at 31 December 2015
Loss attributable to shareholders
Total comprehensive expense for the period
Scrip dividend
New share capital subscribed
Cost of shares issued
Other movement in reserves
Share option charge
Dividend paid
Net change in shareholders’ funds
Opening equity shareholders’ funds
Closing equity shareholders’ funds
As at 31 December 2014
Loss attributable to shareholders
Total comprehensive income (expense) for the period
Scrip dividend
New share capital subscribed
Cost of shares issued
Other movement in reserves
Share option charge
Dividend paid
Net change in shareholders’ funds
Opening equity shareholders’ funds
Closing equity shareholders’ funds
120 Tarsus Group plc
Share
Capital
Account
£000
Share
Premium
Reserve
£000
Retained
Earnings
Total
£000
–
–
(266)
£000
(266)
(266)
(266)
–
6
25
–
–
–
–
–
240
616
–
–
–
–
–
–
–
(2,652)
1,422
(7,885)
31
5,060
856
47,424
48,280
(12,380)
40,991
Share
Capital
Account
£000
Share
Premium
Reserve
£000
Retained
Earnings
Total
–
–
(1,812)
(1,812)
(1,812)
5,091
–
5
258
–
–
–
–
263
4,797
5,060
–
195
9,927
(387)
–
–
–
9,735
37,689
47,424
(9,381)
(2,999)
246
641
–
(2,652)
1,422
(7,885)
£000
–
–
–
(1,943)
1,180
(7,175)
(9,750)
6,751
(2,999)
(8,494)
49,485
£000
(1,812)
200
10,185
(387)
(1,943)
1,180
(7,175)
248
49,237
49,485
NOTES TO THE FINANCIAL STATEMENTS OF TARSUS GROUP PLC
1. ACCOUNTING POLICIES
Where applicable the accounting policies of the Company are the same of those of the Group, as stated on pages 83
to 89.
2. OPERATING PROFIT
Operating loss is stated after charging:
Personnel expenses (note 9)
Foreign exchange gain
Other expenses
Share option charge
Exceptional (income)/costs
2015
£000
2014
£000
326
(29)
565
1,422
347
(7)
501
1,180
(54)
443
2,284
2,021
3. INVESTMENTS
As at 31 December 2015, the Company had the following 100% investments:
Tarsus Luzhniki Limited
Tarsus Ireland Finance Limited
Tarsus Ireland Investments Limited
MCI Opco LLC
IFO Istanbul Fuar Hizmetleri AS
Tarsus UK Holdings Limited
4. TRADE AND OTHER RECEIVABLES
Amounts due from subsidiary undertakings
Prepayments
Taxation and social security
2015
£000
10,409
–
–
6,636
10,852
17,253
2014
£000
10,409
–
–
6,636
10,852
17,253
45,150
45,150
2015
£000
2014
£000
6,762
11
307
7,080
7,295
6
24
7,325
Tarsus Group plc 121
NOTES TO THE FINANCIAL STATEMENTS OF TARSUS GROUP PLC (CONTINUED)
5. TRADE AND OTHER PAYABLES
2015
£000
Amounts due to subsidiary undertakings
Trade payables
Accruals
Contingent consideration
Other creditors
Contingent consideration
Authorised:
Ordinary shares of 5.0p each
Allotted, called up and fully paid:
At 1 January
Scrip dividend
Issue of shares
Exercise of share options
At 31 December
1,409
168
706
87
5
2015
£000
2014
£000
–
672
–
The Company is a guarantor in respect of Group borrowings.
7. CALLED UP SHARE CAPITAL
10,774
58
401
–
19
11,252
6. NON CURRENT LIABILITIES
2015
Number
000
2,375
672
120,000
£000
6,000
2014
Number
000
120,000
6,000
101,200
117
–
512
5,060
6
–
25
95,948
87
5,000
165
4,797
5
250
8
101,829
2015
2014
£000
5,091
101,200
2014
£000
5,060
All shares are ordinary shares which have full voting rights and rights to dividends. Ordinary shareholders have the
right to return of capital only in a solvent liquidation.
There are no shares reserved for issuance under the Group’s share option plan or for issuance relating to deferred
consideration on acquisitions.
As at 31 December 2015, 601,588 ordinary shares of 5.0p each were held in employee benefit trusts in relation to
awards made under the Tarsus Group Long Term Share Acquisition Plan 2008.
During the year ended 31 December 2015, 511,822 ordinary shares of 5.0p each were issued under the Company’s
employee share scheme.
122 Tarsus Group plc
NOTES TO THE FINANCIAL STATEMENTS OF TARSUS GROUP PLC (CONTINUED)
8. DIVIDENDS
Dividend paid in cash or scrip
2014/2013 interim dividend (2.4p/2.3p per share)
2014/2013 final dividend (5.4p/5.0p per share)
2015
£000
2014
£000
2,416
5,469
2,179
4,996
Dividend paid and proposed post year end
2015/2014 interim dividend paid (2.5p/2.4p per share)
2015/2014 final dividend proposed (5.9p/5.4p per share)
2,530
6,024
2,416
5,494
7,885
8,554
7,175
7,910
An interim dividend of 2.5p per share (2014: 2.4p) was paid on 15 January 2016 to shareholders on the Register of
Members of the Company on 4 December 2015.
The directors announced the proposed final dividend for 2015, of 5.9p per share, on 2 March 2016. Subject to approval
at the Annual General Meeting on 20 June 2016, the proposed date of payment is 7 July 2016 to Shareholders on the
Register of Members on 27 May 2016.
Dividends are recognised as a liability in the period in which they are appropriately authorised and are no longer at
the discretion of the entity.
9. PERSONNEL EXPENSES AND NUMBERS
The average number of persons employed by the Company, including executive directors, during the year was:
Directors
Wages and salaries
Social security costs
2015
Number
2014
Number
2015
£000
2014
£000
326
347
7
306
20
7
320
27
The aggregate directors’ remuneration for 2015 is £316,920 (2014: 336,088). Details in relation to total directors’
remuneration for the Group are set out in the section of the Directors’ Remuneration Report reviewed by the auditors
on pages 62 to 70.
10. CAPITAL COMMITMENTS
Other than those items included in the statement of financial position there were no material capital and other
financial commitments in place at the year end. Further, there was no authorised but not contracted for capital
expenditure at the year end.
Tarsus Group plc 123
NOTES TO THE FINANCIAL STATEMENTS OF TARSUS GROUP PLC (CONTINUED)
11. FINANCIAL INSTRUMENTS
The carrying value of all financial instruments is considered to equate to their fair value. Financial risks are managed
on a group basis and the parent company is not considered to be exposed to significant financial risks. All financial
assets are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities and
measured at amortised cost.
Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss
to the Company. For cash and cash equivalents, the Company only transacts with high quality banks. Other financial
assets consist of amounts receivable which were not due past 31 December 2015.
Market risk
The Company’s activities expose it primarily to currency risk as some of its receivables from related parties are not
denominated in Sterling. It is estimated that a general increase of five percentage points in the value of Sterling
against other foreign currencies would decrease the Company’s result before tax by approximately £0.1 million.
12. RELATED PARTY TRANSACTIONS
Transactions resulting in amounts payable and receivable to subsidiaries of the Company are set out in notes 4 and
5.
The principal transactions during the year with other Group companies relate to the recognition of foreign exchange
fluctuations on intercompany balances; loss of £39,729 (2014: loss £597,305). The remaining movements in
intercompany balances relate to the funding of costs incurred by other Group companies.
124 Tarsus Group plc
other information
Tarsus Group plc
Registered in Jersey, number 101579
Directors
Neville Buch
Douglas Emslie
Daniel O’Brien
David Gilbertson
Tim Haywood
Robert Ware
Executive Chairman
Group Managing Director
Group Finance Director
Non-executive Director
Non-executive Director
Non-executive Director
Secretary
Simon Smith
Head Office
17 Upper Pembroke Street
Dublin 2
Ireland
Principal Bankers
HSBC Plc
1 Grand Canal Square
Dublin 2
Ireland
Registered Office
44 Esplanade
St Helier
Jersey JE4 9WG
Financial Advisors and Stockbrokers
Investec Bank Plc
2 Gresham Street
London EC2V 7QP
Registrars and Transfer Office
Capita Registrars (Jersey) Limited
12 Castle Street
St Helier
Jersey JE2 3RT
Lloyds TSB Bank plc
25 Gresham Street
London EC2V 7HN
Solicitors and Legal Advisors
Macfarlanes LLP
20 Cursitor Street
London EC4A 1LT
UK Transfer Agent
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Financial Calendar
26 May 2016
27 May 2016
20 June 2016
7 July 2016
Bank of Ireland
40 Mespil Road
Dublin 4
Ireland
Elian L.P.
44 Esplanade
St Helier
Jersey JE4 9WG
Auditors
Deloitte LLP
2 New Street Square
London EC4A 3BZ
Ex-Dividend date
Record Date
Annual General Meeting
Final dividend payment
Dates correct at time of print, but subject to change.
The Company’s website can be found at www.tarsus-group.com
Tarsus Group plc 125