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Registered number: NI636189 (Northern Ireland)
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The directors present their Strategic Report for the period ended 31 December 2023 for Treliant Limited ("the Company") and its subsidiaries ("the Group").
The wider group headed by TVG-Treliant Holdings, LLC being the ultimate parent of Treliant Limited ("the Treliant Group") is a multi-disciplinary advisory firm built to address the regulatory, strategic and operational issues that confront financial services firms. The Treliant Group has been a consulting partner to the global financial industry. Our teams are led by practitioners from the industry and regulatory communities, bound together by our mission to help our clients meet regulatory obligations, manage risk, and address business change. We do this through the delivery of data-driven, technology-enabled advisory, implementation, and outsourced operations. The Treliant Group as a whole has U.S. headquarters in Washington, DC and has its offices in New York, Belfast, London and Lódz.
In August 2021, the Group was acquired by TVG Treliant Holdings, LLC. As a result of the merger, the Group has benefited from the corporate services synergies, i.e. integration of HR, Finance, Sales, Recruitment.
The majority of UK operations are dedicated to one of the Group's key clients. The Belfast office operates as a Service Delivery Centre providing services for different business units. The synergy from the merger is paying off today as the Group has developed a presence in both the EMEA and US markets with improved operational resources available across whole organisations. This has provided flexibility and opportunities in developing the Group's workforce and customer base. During the financial period the Group experienced a decline in revenue to £14.8m (31 March 2023: £22.5m), primarily the result of a decrease in expenditure, with a reduction in the use of contracted employees.
The business environment in which the Group operates continues to be very challenging and competitive pricing across the industry continues to put pressure on margins.
Operationally, losses may be incurred as a result of delayed onboarding, project delays or other unforeseen circumstances. Ensuring that contracts are completed on time and in line with budgeted costs remains our key focus. Although business conditions in the current climate remain challenging, the Group continues to investigate opportunities to grow and diversify the business. The Treliant Capital Markets division is heavily dependent upon CitiBank as a client. The Group is targeting to diversify its client base from 2024 onwards. Further to this, the Group's ultimate parent has outstanding term debt at the end of 2024 totaling $102m. This presents a risk in relation to going concern for the entire group, including Treliant Limited and its subsidiaries. The directors are confident that the group will achieve additional equity investment in the near future which will stabilise this position.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
The KPIs are monitored by the board to ensure they are progressing as planned and to take potential actions if there is a risk of not achieving company internal goals.
The balance sheet continues to present a solid position, with net assets increasing from £2.8m to £3.9m. Gross profit and gross profit margin: £3.5m, 23.8% (31 March 2023 – £5.2m, 23.1%) Net profit and net profit margin: £1.3m, 8.7% (31 March 2023 – £1.1m, 5.0%) EBITDA (earnings before interest, tax, depreciation and amortisation) and EBITDA margin: £1.7m, 11.4% (31 March 2023 - £1.5m, 6.6%). Group management understands that in order to maintain profitability, cost savings should occur from a reduction in overheads. There is a periodic review for the administrative cost performed in order to keep the company profitable. Future Developments The directors anticipate the business environment will remain competitive, although trading conditions in the current climate remain challenging, the directors continue to investigate opportunities to grow the business. Except for outstanding loan balances at the ultimate paret company level, which the directors believe will be repaid upon a transaction, they believe that the Group is in a good financial position and that the risks that have been identified are being well managed. With careful focus on appropriate diversification and service margins, as well as continuing to review the state of the market and the activities of competitors, the directors are confident that the Group will maintain and build on this position. The ultimate parent company is actively seeking new investment opportunities which they expect to close by 30 June 2025, it is hoped that any investment will help to continue to secure the trading status of the Group.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the period ended 31 December 2023. In accordance with s414c(II) of the Companies Act 2006, certain information that is required to be included in the Directors' Report has been otherwise included in the Strategic Report, including information in relation to future developments.
The directors who served during the period were:
B M Gorman (resigned 31 July 2023)
C Reid (resigned 31 July 2023) T Robinson (resigned 31 July 2023)
The profit for the period, after taxation, amounted to £1,286,280 (31 March 2023 - £1,123,501).
No dividends were declared, paid or payable during the reporting report (31 March 2023: £NIL).
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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TRELIANT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
There have been no significant events affecting the Group since the period end.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRELIANT LIMITED
We have audited the financial statements of Treliant Limited (the 'Parent Company') for the period ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to note 2.3 in the financial statements, which indicates that the Group is reliant on support and continuance of cost plus funding from the ultimate parent. As stated in note 2.3, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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TRELIANT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRELIANT LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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TRELIANT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRELIANT LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the Group through discussions with management, and from our commercial knowledge and experience;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group, including the Companies Act 2006 and taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC.
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TRELIANT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRELIANT LIMITED (CONTINUED)
We identified that fraud risk in relation to revenue recognition is a significant risk in line with ISA 240 and designed and implemented appropriate audit procedures in this area. Audit procedures included reconciliations from statements of works, through to billable hours on projects and subsequent invoices. Additionally, appropriate year-end cut off testing was performed to ensure revenue was included in the correct period.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.
for and on behalf of
Chartered Accountants and Statutory Auditors
Birchin Court 5th Floor
19-25 Birchin Lane
London
United Kingdom
EC3V 9DU Date:
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 36 form part of these financial statements.
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COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
The notes on pages 17 to 36 form part of these financial statements.
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