Target Group Limited

(1)

Target Group Limited

- Annual report and consolidated financial statements.

_ for the year ended 31-March 2019

Registered number 01208137

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Strategic report

Directors report

Statementofdirectors’ responsibilities

Independent auditor’s report to: the members ofTarget GroupLimited

-Consolidated profit and loss account and other comprehensive incomé:

Consolidated balance sheet

Companybalance sheet

Consolidatedstatement of changes in' equity

Company statement öf changes in Equity Notes to thefinancial statement.

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12

13

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(3)

Target Group Limited Annualreport and consolidated financial statements Year ended 31 March 2019

Strategic Report

This strategic report has been. prepared for the Groupas a whole (“Target”), so includes matters which are significant to Target Group Limited andits subsidiary undertakings. .

Review of the business

Principal activities

The principal activities ofTarget are the-provision of'transtormational outsourcing, business proccas management and managed servicesto the financial services sector. We enable clients to transform performance by delivering a world class combination of customer experience, regulatory compliance and productivity through our digital technology and. process improvement capabilities. Our services are delivered in highly regulated missioncritical environments, and our platform supports over £25bn. ofbusiness. We have over 40 years’ experience andare trusted by over 50 financial institutions, including some ofthe top 20 global banks

Through Elderbridge Limited weto act as Lender ofRecord ona numberof lendingportfolios, providing management services for portfolio. owners in the FCA regulated environment.

Financialreview

The previous accounting period was. a 15-month period, and we assess performance on an annualised basis. Comparing the year to 31 March 2019 with the previous 15-month accounting. period, turnover decreased by 14% (2018: increase of36%) whereas on an annualised basis, turnoverincreased by 8%. This growthwas primarily driven by a numberof new clients choosing to put their business with Target.:Gross margin remained relatively consistent at 37%.compared to 36% for the prior period.

Operating profit decreased from £7,964k in the 15-month period ended 31 March 2018 to £5,429k inthe year ended

31 March 2019. On anannualised basis this represents a decrease of 15% (£942k),and is primarily due to amortisation of intangible assets (£1.9m) following capital expenditure investment in 2018, as well as the recognition in the prior year ofa non-recurring profit on the sale of Target Financial Systems Limited's ownedloan portfolio (£423k), which we considered non-coreto the future activities of Target. Eliminating the effects ofthese twofactors, operating profit margin increased by 10%, compared with 7% in the prior year, driven by our investment in improving operational effectiveness.

The following data illustrate the annualised comparison:

2019 2018 2018 (12-month period) (12-month pro-rata) (15-month period)

£000 £000 £000 Revenue 75,456 : 69,930 87,412 EBITDA . 10,798 . - 9,630 . 12,037

Our markets

Our clients are predominantly providers of lending, payment, investment and insurance products, across both the public and private sectors. We service these markets through four key offerings; transformational outsourcing, business process outsourcing, managed services and software, all ofwhich are supported by our professional services and consultancy teams.

Business performance

We have continued to work with Tech Mahindra, of which Target is a 100%-owned subsidiary, in bringing new technology to bear in helping our clients succeed. We have also expanded the range of industries we serve, with new clients in utilities and the public sector. Wehave been delighted that in our core markets existing and new-«clients have chosen to put more business with Target, enabling us to continue to grow our franchise and create additional, sustainable annuity revenue streams.

In our existing client portfolio, we saw several of our largest clients chose to renewtheir coritracts with Target, including Shawbrook and the DVLA.Theseare relationships that we value deeply. We expect that our continued focus on operational excellence will see us renew several further clients in the near future.

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Target GroupLimited

Annualreport and consolidated financial. statements Year ended 31 March 2019

4

Strategic Report (continued)

Brexit

Target is monitoring and planning for any impacts of Brexit through a Bréxit Governance Meeting held monthly. There is representation from across the business.and the purposeis to identify potentialrisks and the mitigants should. those risks transpire. The Brexit Governance Meeting considers both the potential impact on our operations, for example scenarios that mayaffect the demand on our operations (e.g. call volumes), and also Potential impacts to our clients andsuppliers.

People

During the year we continued to strengthen our leadership, with some additions to the executive team in Marcella Rich, our Director of Client Services and, post-year end, the appointment ofStuart Anderson, our Chief Commercial Officer. These new appointments and a numberof others in ourSenior Leadership Team are helping keep Target at the forefront of innovation, and change, aid we will continue to irivest in high calibre people.

The average numberof colleagues increased marginally in the period from 989 to 1,001. This is a net result of new client mandates and improved productivity in our operations. We continue to invest in our Management Graduate Scheme, welcoming 5 new graduates to Target inSeptember 2018. This is a key elementof ourfocus on developing the nextgeneration leaders for the business. In addition, we launched a Technical Graduate schemethis year to provide the opportunity ‘for those interested in a career within technology and 4 Technical graduates are currently being recruited for a September 2019 start.

Our culture.programmecontinuesto thrive. Built around a clear set of values and behaviours, we have re-branded our employee recognition scheme "Target Wins' to ensure that we recognise individuals and teams that make an outstanding contribution across the business. In 2018-19 over 240 nominations were received. Our localised reward schemehas also been re-branded to “You count” which provides small rewards. to swiftly recognise great examples

of our Target. values and behaviours.

,

Duringthe year we launched a new Diversity & Inclusion working group. At Target we are delighted to have a diverse. workforce and this has led to a numberofinitiatives including the creation of the "Women in Target’ network to support and irispire the nextgeneration of female leaders. .In March 2019 we announceda reduction in our mean gender pay gap from 27% to 22% since the previous year.

Corporate social responsibility

In 2018 we continued to support charitable causes, with each office selecting a charity. In.total, the Group raised over £27,000 for Mind, Save the. Family, CHICS, Alzheimer’s Society and the Yorkshire Air Ambulance, whilst alse raising over £11,000 for smaller charities. Our employees contributed to the local community through foodbank collections, clothing donations and via. charitable payroll giving. As a Company, we are passionate about engaging with-our local community and taking responsibility for the environment around us.

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Principal risks and uncertainties

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. Risk management í Target:;prop

\ A “TargetGroup Limited

Annual report anidconsolidated finaricialstatements. “Yearended. 31 March 201>

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Target Group Limited Annual report and consolidated financial statements Year ended 31 March 2019

Strategic Report (continued)

Outputs from risk managementactivities are reviewed through the Risk Governance Framework, culminating in escalation to the Board’s Group Risk Committee or Group Audit Committee which are sub committees ofthe Target Group Board. The Risk Governance Frameworkis set out in the diagram below.

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reporting ' en if en { Divisional level

cycle i * Escalation Business level** Risk identification Businesslevel Business level ** - Not the full and exhaustive list of functions at this level

Principalrisk outlook

Targetis not risk averse but aimsto offer innovative technology based servicing,software and productpropositions, within the constraints of its financial resources and without compromising customer outcomes,its reputation orits brand. It only pursues opportunities that are well understood, that support the vision and strategy of the group and whereriskscan be effectively managed.

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Strategic Report (continued)

Principal risk outlook (continued)

Theprincipal risks faced by the Group are summarised below:

Risk Conductrisk Information security risk Operational risk governance frameworks Definition

in our control and

leading to unfair

outcomes, detriment to our clients/customers

and/or regulatory censure.

The risk of a failure

Therisk of failure in our controls for protecting corporate, client and customer data, leading to

loss of client and customer trust, material cost

. and reputational damage.

The risk of failing to effectively deliver the volumeof simultaneous, complex change facing the business and thereby impacting on service delivery.

Future developments

Key mitigating actions.

Target’s governance and contro] frameworks are designed to’ minimise the risk of unfair outconies. These frameworks are subjectto regular review by Target, its clients and their auditors.

Target maintains extensive controls to safeguard data, including increasing employee awareness, physical and logical

access controls and data encryption. We have

also invested in additional controls. and technology because of GDPR which, will

further mitigate this risk.

,

Target has a combined and comprehensive resource management approach that enables effective management of change acrossall business activities, while maintaining agreed standards of conduct and service level performance.

Target Group is in an excellent position to take advantage of opportunitiesarising in the coming year.

A rapidly changing financial services market will lead to opportunities with both established players anddisruptive entrants. The continued strengthening ofour senior leadership team-and our relationship with Tech Mahindra during the year leaves us well positioned to secure these newclient opportunities.

Ultimately the success of Target ‘will be determined by the success of otir clients and I would like to take this opportunity to thank our clients for their continuedcustom.

By order of the board

Testyn Evans.

Director

5-19 Target House

Cowbridge Road East

Cardiff CF11 9AU

Registered number 01208137

Sal Y I, 2019

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Target Group Limited Annual report and consolidated financial statements

Year ended 31 March 2019

Directors’ Report:

The directors presenttheir annual reporttogether with thefinancial statements and auditor’s report, for the year ended 31 March 2019.

During the prior period the company changedits accounting reference date to 31 March 2018 in order toalign with its parent undertaking: Therefore, the financial statements present the year ending 31 March 2019, whereas the ‘comparative. period represents the 15-month period ending 3] March 2018.

In accordance with Section 414C (11) of the Companies Act 2006,certain information around thetradingactivities ofthe Group are contained within theStrategic Report.

Results and dividends

The Group’sresults are set out in the consolidatedprofit and loss account on page 12 andthestrategic report on page 1. ,

The directors do not recommend the payment ofa dividend for the period (2018: £Nil).

Directors

The directors who held office during the year were: as follows: V. Agarwal Y I. Evans A. Doman P. Byrne LD. Larkin T.A. Baxter Directors’ indemnities

The Companyhas madequalifyingthird-party indemnity provisions for the benefit ofits directors which were made during the prior period and remain in force at the date of this report.

Financial risk management objectives and policies

The Group’s activities exposeiit to a numberoffinancialrisks including creditrisk, cash flow risk and liquidity risks. Cash flow risk

Whilethe Group has exposure to exchangerate fluctuations dueto its operations in New Zealand and the Eurozone, this is limited due to a natural hedge, in that revenuesare largely offset by expenditure in thelocal currencies. All treasury matters are now coordinated viathe relevant. group functions of our parent entity Tech Mahindra Limited. There is minimalinterest rate risk to the Group as we hold no external debt, except our financeleases.

Credit risk

The Group’s principalfinancial assets are bank balances and cash,trade and other receivables and investments. The. Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net.of allowances for doubtful receivables. An allowance for impairment is made where there isan identified loss event. which, based on previous experience, is evidence of a reduction in the recoverability of cash flows.

The Group has no significant concentration ofcredit risk, with exposure spread over a large number of clients. Most ofour clients are blue chip investment, retail banking, finance and insurance companies, and government bodies which representa low creditrisk.

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, Target Group Limited Annual report and consolidated financial statements * Year ended 31 March 2019 .

Directors’ Report (continued)

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future. developments, the company uses a mixture of long-term and short-term debt finance, when required.

Regulatoryrisk 7

Target Servicing Limited holds FCA permissions as an IFPKU 125k limited licence firm to enableit to operate as a plan manager within the structured product arena under the Hartmoor Financial brand. Whilst the plan manager business was closed in November 2016, we have kept thesepermissions with the Financial Conduct Authority, Our risk. function. reviews our regulatory requirements on an ongoing: basis to ensure compliance with all relevant

permissions held.

Political contributions

Nopolitical donations were made (2018: £Nil). Disabled employees

Applications for employment by disabled persons are alwaysfully considered, bearing in mind the aptitude ofthe applicant concerned. In the event of membersofstaff becomingdisabled, every effort will be made to ensure their employmentwiththe company continuesand that the training, career developmentarid promotion of disabled persons should, as far as.possible, be identical to that of other employees.

Employee consultation

The Groupplaces considerable value on the involvementofits employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is

achieved through formal and informal meetings with the Executive Committee (“ExCo”) in the form of Town Halls,

“ExCo live” and group email communications, The Town Halls are open forumsand are a wayofconsulting regularly:

-with employees on a wide range of matters affectingtheir current and future interests.

Other information

An indication of likely future developmentsin the business and particulars of significant events which have occurred „since the endofthe financial period have been includedin. the Strategic Report on page1.

Disclosure of information to auditor

The directors who held office at the date.of approval of thisdirectors’ report confirm. that, so far as they are each aware,there is no relevant audit information of whichthe company’s auditor is unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant auditinformation and to establish that the company’s auditor is aware of that information. .

Auditor

Pursuant to Section 487 of theCompanies Act 2006, the auditor willbe deemed to be reappointed and KPMG LLP will therefore continuein office.

Byorderofthe board

Target House

Cowbridge Road East

oOAN

Cardiff CF11 9AU

ATA

Registered number 01208137

- Testyn Evans

Sahu

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Target Group Limited Annualreport and consolidated financial statements Year ended 31 March 201.9

Statement of directors’ responsibilities in respect of the annual report and

consolidated financial statements

Thedirectors are responsible for preparing the AnnualReport andthe financial statements in accordance with applicable '

law ánd regulations.

Companylaw requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the group and parent companyfinancial statements in accordance with. UK accounting standards and. applicable law (UK Generally Accepted Accounting Practice), including FRS 102 TheFinancial Reporting Standard

applicable in the UK and Republic ofIreland.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs ofthe group and parent company and oftheir profit or loss for that period. In preparing each of the group andparent.company financial statements, the directors are requiredto:

e _ select suitable accounting policies andthen apply them consistently;

e

make judgements and estimates that are reasonable and prudent;

e state whether applicable UK accounting standardshave beenfollowed, subject to any material departures disclosed and explained in the financial statements;

e -assess the group and parent company’sability to continue. as a going concern, disclosing, as applicable, matters related to going concern; and

* use the going concernbasis of accounting unless they eitherintend to liquidate the group or the parent company or.

to cease operations, or havenorealistic alternative but to do so.

The directors are responsible-for keeping adequate accounting records that are sufficient to.show and explain the parent company’s transactions and disclosé with reasonable accuracyat anytime the financial position of the parent company and enable them to-ensurethatits financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparationoffinancial statements that are free from material misstatement, whether dueto fraud or error, and have. general responsibility for taking such ‘steps as are reasonably opento them to safeguard the assets of the group andto preventand detect fraud and otherirregularities.

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KPMG!

Independent auditor’s report to the members of Target Group Limited

Opinion

Wehave audited the financial statements of Target Group Limited (“the company”) for the year ended 3 1 March 2019 which comprise the consolidated profit and loss account and other comprehensive income, consolidated balance sheet,

company balance sheet, consolidated statement of changes in equity, company statement of changes in equity, and

related notes, including the accounting policies in note 1. ‘In our opinionthe financial statements:

e give true and fair view of the state of the group’s and of the parent company’saffairs as at 31 March 2019 and of the group’s profit for the year then ended;

. have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial _ Reporting Standard applicable in the UK and Republic ofIreland, and

. have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the group in accordance with, UK ethical requirements including the-FRC Ethical Standard. We believe that the audit evidence we have obtainedis a sufficient and appropriate basis for our opinion.

The impact of uncertainties due to the UK exiting the European Union on our audit

Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors, such as the recoverability of investments, goodwill and trade debtors and related disclosures and the appropriateness of the going concem basis of preparation of the financial statements. Al] of these depend on assessments ofthe future economic environment and the group’s future prospects and performance.

Brexit is one of the most significant economic events for the UK, andat the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the group’s future prospects and performance. However, no audit should be expectéd to predict the unknowable factors or all possible future implications for a company andthisis particularly the case in relation to Brexit.

Going concern

The directors have prepared the financial statements on the going concern basis as they do notintend to liquidate the group or the company or to cease their operations, and as they have concluded that the group and the company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt overtheir ability to continue as a going concern forat least a year from the date of approval of the financial statements (“the going concern period”).

We are required to report to you if we have concluded that the use of the going concern basis of accounting is

inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use ofthat basis

for a period of at least a year from the date of approval ofthe financial statements. In our evaluation of the directors’ conclusions, we considered the inherent risks to the group’s business model, including the impact of Brexit, and analysed how those risks might affect the group and company’sfinancial resources orability to continue operations over the going concern period. We have nothingto report in these respects.

However, as we cannot predict all future events or conditions and as subsequent events mayresult in outcomesthat are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the group or the companywill continue in operation.

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Independent auditor’s report to the members of Target Group Limited

(Continued)

,

Strategic report anddirectors’ report

The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and wedo notexpress an audit opinion thereon.

Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

- + wehave not identified material misstatements in the strategic report and the directors’ report;

“e in our opinion the information given in those reports for the financial period is consistent with the financial statements; and

e in our opinion those reports have been prepared in accordance with the Companies Act 2006. Matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to youif, in our opinion:

e adequate accounting recordshave not been kept by the parent company, or returns adequate for our audit have .

not been received from branches not visited by us; or

e the parent company financial statements are not in agreement with the accounting records and returns; or e " certain disclosures of directors’ remuneration specified by law are not made;or

+ we havenotreceivedall the information and explanations we require for our audit. Wehave nothing to report in these respects.

Directors’ responsibilities

As explained more fully in their statement set out on page 8, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statementsthat are free from material misstatement, whetherdue to fraud or error; assessing the group and parent company’s ability to continue as a going concern, disclosing, as : applicable, matters related to going concern; and using the going concern basis ofaccounting unless they either intend

to liquidate the group or the parent companyorto cease operations, or have norealistic alternative but to do so. Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whetherthe financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assuranceis a high level of assurance, but does not guarantee that an audit conducted in accordance with [SAs (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 aggregate, they could reasonably be expected to influence the economic . decisions of users taken on the basis ofthe financial statements.

A fuller description of our responsibilities is provided on ‘the FRC’s website at. www.frc.org.uk/auditorsresponsibilities.

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Independent auditor’s report to the members of Target Group Limited

_ (continued)

- The purpose of our audit work and to whom we oweour responsibilities

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do notacceptor assumeresponsibility to anyone other than the company and the company’s members, aas a body,for our audit work,forthis report, or for the opinions we have formed.

Fayo

Jeremy Thomas (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor CharteredAccountants 3 Assembly Square Britannia Quay

Cardiff

CF104AX

13/7/19

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.

Annual report and consolidat

Target Group Limited

ed financial statements Year ended 31 March 2019.

ConsolidatedProfit and Loss Account and Other Comprehensive Income

for theyearended 31 March 2019

Year ended Note - 31 March 2019 £000 Turnover 3 75,456

Costof sales

(47,689)

Gross profit : 7 27,767 _ Administrative expenses (22,338)

Operating profit

5,429

Interestpayable and similar: expenses 4 (183) Interestreceivable and similar income Br 8 Profit before taxation 6 5,254 Tax onprofit , 9 (1,635) Profit after taxation 3,619 Othercomprehensive income . =

Total comprehensive income |

,

3,619

All results relate to-continued operations:

Notes on pages 17 to 35 form part of these financial statements.

Period ended 31 March 2018 £000 87,412 (55,795) - 31,617 (23,653) 7,964

(318)

29 7,675

(1,619)

6,056

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Target Group Limited Annual report and consolidatedfinancial statements Year ended 31 March 2019

Consolidated Balance Sheet

at 31 March 2019

Note

31 March 2019

,

31 March 2018

£000 _ £000 £000 £000 Fixed assets Goodwill : 10 : "373 529 Other intangibles 10 3,035 4,860

Tangible assets

.

11. 5,674

5,749

9,082 11,138 Currentassets

Debtors — due within oneyear 13 24,298 26,124

Debtors — due after one year

13

923 2,378

25,221 28,502

Cash at bank and in hand ; 11,175. : 3,778

o 36,396 32,280 Creditors: amounts falling due within one year 14 (12,378) (13,229)

Netcurrentassets

24,018

19,051

Total assets less currentliabilities > 33,100 30,189

Creditors: amounts fallingdue after more than 15 (4,117) (4,825) one year , > e

Net ássets

28,983

25,364

Capitaland reserves

Called up share capital o 17 810 810

Share premium account 501 501

Capital redemption reserve 68 68 Profit and loss account 27,604 23,985 Shareholders’ funds . 28,983 : 25,364

These financial statements were approved by the board.of directorson __ SUN \\, 2019 and were signed on its

behalf by:

-Testyn Evans

Director

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Company Balance Sheet

at 31 March 2019 ;

Note 31 March2019 31 March 2018 £000 £000 £000 £000 Fixed assets ~ .

Intangible assets 10 - 2,831. 4,544

Tangible assets

—

i

4,489

4,369

Investmentin subsidiary undertakings

12 14,887

14,887

: 22,207 23,800

Current and non-current assets

Debtors — duewithin one year 13 10:697 11,273 Debtor's— dueafter one year 13 796 2,332 11,493 . 13,605

Cash at bank and in harid 10,648 3,344

22,141

DN

16,949

Creditors: amounts falling due within oneyear 14 (28,100) (24,122).

Net current(liabilities) (5,959) (7,173) Total assets less currentliabilities , 16,248 16,627 Creditors: amounts falling due after more than one_year 15 (1,125)_> (1,649)

Netassets

l

15,123

14,978

Capital and reserves

Called up share capital 17 - 810 810

Share premium account e 501 501

Capital redemption reserve fund -

68 o

68

Profit and loss account 13,744 13,599

Shareholders’ funds 15,123 14,978 Theprofit for the financial year dealt within the financial! statements of the parent company was £145k (2018: loss £3,212k). ,

These financial statements were approved.by the board of directors on Soly \, 2019 and were signed onits behalf by: ” ne eT Testyn Evans Director

14

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Target. Group Limited Annual report and consolidated financial statements Year ended 31 March 2019

Consolidated Statementof Changes in Equity |

.

Equity attributable to equity shareholdersofthe Group Share: Capital Profit and

Share premium redemption loss

capital account reserve account | Total £000 £000 £000 £000 . £000

Balance at 1 January 2017

810

501

68 17,929

19,308

Total comprehensive income for ‘the . period .

Profit for the year - - - 6,056 6,056 Balance at 31 March 2018 and 1 April 810 501 68 23,985 25,364 2018

-Total comprehensive incöme for the period . 7

Profit for the period : - - - 3,619 3,619 Balance at 31 March 2019 810 501. 68 27,604 28,983

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Annual report'ánd consolidated financial statements i

Year ended 31March 2019 a i

CompanyStatement of Changesin Equity

Equity attributable to equity shareholders of the Company Share: Capital Profit and

Share premium redemption loss

capital account: reserve: account Total £000 £000 £000 £000 £000

Balance at 1 January 2017

.

810

501

68 16,811

-

18,190

Total comprehensive ‘income for the

period

o

.

Loss forthe period. - o ~ (3,212) (3,212) Balance at 31 March 2018 and 1 April

2018 810 501 68 13,599 14,978 Total coniprehensive income for the

‘period . . i Profitfor the period - - - 145 145 ;

$

Balance at 31 March 2019

Er

-

810

501

68 13,744

15,123

(19)

Notes to the financial statements

For the year ending 31 March.2019

1 Significant accounting policies

Theprincipal accounting policies are summar‘ised below. They have all been. applied consistently throughout the year and the preceding period.

General information and basis of accomiting:

Target Group Limited is a company incorporated in the United Kingdom under the Companies Act.

The Company is a private Company limited by shares and is registered in England and Wales. The address of the registered office is given on page 7.

The nature ofthe group’s operations and its principal activities are set out in the Directors’ report and Strategic report on pages 1 to 7.

These financial statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (“FRS 102”) as issued. in August 2014. The amendments to FRS 102 issued in July 2015 and the amendments to Company law made by the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 have been applied.

The presentation currency of these financial statements is sterling. All amounts in the financial statements have been . roundedto thenearest £1,000.

The functional currency of Target Group Limited is considered to be. poundssterling because that is the currencyof the primary economicenvironment in. which the Companyoperates. The consolidated financial statements are also presented in poundssterling.

Target Group Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect ofits separate financial statements, which are presented alongside these consolidated financial statements. Exemptions havebeentakeninrelation to financial instruments, presentation of a cash flow statement and remuneration of key managementpersonnel.

The consolidated financial statements of Tech Mahindra Limited, within which this Companyis included, can be

obtained from the National Stock Exchange of India Ltd (NSE), The BSE Limited (BSE) and the company’s website (www.techmahindra.com).

The Group proposes to continue to take advantage of the disclosure. exemptions FRS 102 in its next financial

statements. ,

Going concern

The directors have considered the basis ofpreparation of the financial statements and, based on the assessment of budgets and cash flow forecasts, have a reasonable expectation that the group and company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concernbasis of accountingin preparing the financial statements.

Basis ofconsolidation

The consolidated financial statements incorporate the financial statements of the company andall its subsidiary undertakings made up to 31 March 2019, and previously to 31 March 2018. The results of subsidiaries acquired or sold are consolidated for the periods from orto the date on which control passed.

Business combinations are accounted for under the purchase method. All intra-group transactions, balances, income and expensesare eliminated on consolidation.

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Notes (continued)

1 Significant accounting policies (continued)

Foreign currency

Transactionsin foreign currencies are translated to theGroup companies’ functional currency attheforeign exchange rate ruling at the date ofthe transaction.

Monetary assets andliabilities denominated in foreign currencies at the balance sheet date are retranslated to the * functional currency at the foreign exchangerate ruling at the balance sheet date. Non-monetary assets and liabilities that are measuredin terms of historical cost in a foreign currencyare translated using the exchange rate at the date of

the transaction.

Foreign exchange differences arising on. translation are recognised in the profit and loss account. The revenues and expenses of foreign operationsare translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income.

Business combinations

Business combinations are accounted for using the purchase method as at the acquisition date, which is the date on which controlis transferred to the company.

Intangible assets - Goodwill

Goodwill arising on the acquisition of subsidiary undertakings and businesses representing the excessofthe fair value ofthe consideration given over the fair value.ofthe identifiable assets andliabilities acquired,is capitalised and written off ona straight-line basis over its useful economiclife. Provisions are made for any impairment.

The directors consider each acquisition separately for the purpose of determining the amortisation period, being the period over which the directors estimate that economic benefit will continue to be derived from the purchaseas:

Goodwill on consolidation arising on acquisition. of subsidiary undertakings 5 — 10 years Intangible assets. — research and development

Research expenditure is written off as incurred. Development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individualprojects. In such cases, the identifiable expenditure is deferred and amortised over the period during which the Group is expectedto benefit. This period is between 2 and 5 years. Provisions are made for any impairment. See note.2 for further details.

Other intangible assets

Intangible assets acquired as part of a business acquisition are capitalised separately from goodwillif the fair value can be measuredreliably on initial recognition.

Theintangible assets acquiredhave been valued using an. income approach, using the multi-period excess earnings method for customer contracts, and the relief from royalty method for brands.

Subsequentto initial recognition, intangible assets are stated at cost less accumulated amortisation and accumulated impairment. Intangible assets are amortised on a straight line basis over their estimated useful economic lives as follows:

Customercontracts - 3 years Brand . - 5 years

The companyreviewsthe amortisation period and method when events andcircumstancesindicate that the usefullife may have changedsincethe last reporting date.

Goodwill and other intangible assets are tested for impairment in accordance with Section 27 Impairmentofassets whenthereis an indication that goodwill or an intangible asset may be impaired.

(21)

Target Group Limited Annualreport and consolidated.financial statements Year ended 31 March 2019

Notes (continued)

1 Significant accounting policiës (continued)

Tangiblefixed assets

Tangible fixed assets are stated at cost, net ofdepreciation andany provision for impairment. Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less the estimated residual value, of each asset on a straight-line basis over their estimated useful economiclives from the point they are brought into use as fullows:

Short leasehold property - the term ofthe lease Computer equipment - 3-7 years

Fixtures and fittings - 3-10 years Motor vehicles - 2-4 years

Whereparts of an item oftangible fixed assets have different useful lives, they are accounted for as separate items of ’ tangible fixed assets.

The company assesses at each reporting date whethertangible fixed assets (including those leased under a finance

lease) are impaired.

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consumean asset’s future economic benefits. _,

Financial instruments

Financial assets and financial liabilities are recognised when the Group becomesa party to the contractual provisions

ofthe instrument.

-Financial liabilities and equity instruments are classified according to.the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all ofits liabilities.

Financial assets and liabilities

All financial assets andliabilities are initially measured attransaction price (including transaction costs), except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excludingtransaction costs), unless the arrangementconstitutes a financing transaction. Ifan arrangementconstitutes a financing transaction, the financialasset orfinancialliability is measured atthe present value of the future payments discounted at a marketrate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists

a legally enforceable right to set offthe recognised amounts and the Groupintendsto either settle on a net basis, orto realise the asset and settle the liability simultaneously.

Debt instruments which meet the following conditions, are subsequently measured at amortised cost using the effective interest method:

a. Returns to the holderare (i) a fixed amount;or(ii) a positive fixed rate ofreturn over the life ofthe instrument; or (iii) a positive variable return that, throughoutthe life of the instrument, is equal to a single referenced quoted or observableinterest rate; or (iv) some combination of such fixed rate and variable rates, providing that both rates are positive.

b. There is no contractual provision that could, by its terms, result in the holder losing the principal amount or any interest attributable to the current period or prior periods.

c. Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity are not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in controlof the issuer, or to protect the holder or issuer against changes in relevant taxation or law. :

d. There are no conditional returns or repaymentprovisions except for the variable rate return described in (a) and prepaymentprovisions describedin (c).

(22)

Notes (continued)

1 Significant accounting policies (continued)

Financial instruments (continued)

Debtinstrumentsthatare classified as payable or receivable within one year and which meetthé above conditions are

measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of

-impairment.

Other debt instruments not meeting these conditions are measured at fair value through profit or loss.

Financialassets are derecognised when and only whena)the contractualrights to the cash flows fromthe financial asset expire orare settled, b) the Group transfers to anotherparty substantially all ofthe risks and rewards ofownership ofthe financial asset, or c) the Group, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and the otherparty hasthe practical ability to sell the assetin its entirety to an unrelatedthird party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. :

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Trade and other debtors / creditors

Trade and other debtorsare recognised initially. at transaction price less attributable transaction costs. Tradeand other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognitiontheyare measuredat amortised costusingthe effective interest method, less any impairmentlosses in the case oftrade debtors. Ifthe arrangement constitutes a financing transaction, for example ifpaymentis deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

Interest-bearing borrowings classified as basicfinancial instruments

Interest-bearing borrowings are recognisedinitially at the present value of future payments discounted at a market rate of interest. Subsequentto initial recognition, interest-bearing borrowingsare stated at amortised cost using the effective interest method, less any impairment losses.

Investments

In.the Company balance sheet, .investments in subsidiaries and associates are measured at cost less impairment. Cash and cash equivalents

Cash and cash equivalents comprise cash balances andcall deposits.

(23)

Target Group Limited Annualreport and consolidated financial statéments .

Notes (continued)

1 Significant accounting policies (continued)

Financial instruments (continued)

Impairmentofassets

Assets, other than those measured at fair value, are assessedfor indicators of impairment at each balancesheet date. Ifthere is objective evidence.of impairment, an impairmentloss is recognised in the profit and. loss as described

below.

Non-financial assets

The carrying amountsofthe entity’s non-financial assets, otherthan deferred tax assets, are reviewed at each reporting date: to determine whether there is any indication of impairment. If any such indication exists, then the asset’s

recoverable amountis estimated, An impairment loss is recognised if the carrying amount of an asset or its Cash

Generating Unit (CGU) exceedsitsestimated recoverable amount. Impairment losses are recognisedin profit orloss.

Financial assets

For financial assets carried at amortised cost, the amount of an impairmentis the difference between the asset’s carrying amount.and the present value of estimated futurecash flows, discountedat the financial assét’s original effective interest rate.

For financial assets carried at cost less impairment, the impairmentloss isthe difference between theasset’s carrying amount andthe best estimate ofthe amount that would be received forthe asset if it were to be sold at the reporting date.

Whereindicators exist for a decrease in impairmentloss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairmentlossis tested to determine reversal. An impairmentloss is reversed on an individual impaired financial asset to the extent.that the revised recoverable. value does not lead to a revised carrying amount higher than the carrying value had:noimpairment been recognised.

Taxation

Currenttax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) usingthe tax rates and lawsthat have been enacted or substantively enacted by the balance sheet date.

. Deferred tax is recognised in respectof all timing differences that have originated but not reversed atthe balance sheet enennenn

date where transactions or events that result. in an obligation to pay more tax in the futureor a right to pay less tax in

the future have occurred at the balarice sheet date. Timing differences are differences between the Group's taxable

profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax

assessments in periods different from those in which they.are recognised. in the financial statements. , Deferred tax is measured using the tax rates and lawsthat have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extentthat, on the basis ofall available evidence, it can be regarded as morelikely than notthat there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

The tax expense or incomeis presented in the same componentof comprehensive incomeor equity as the transaction or other event that resulted in the tax expenseor income.

Currenttax assets and liabilities are offset only whenthereis a legally enforceable right to set off the amounts and the

-Group intends eitherto settle on a net basis or to realise the asset and settle the liability simultaneously.

(24)

Target Group Limited Annual report and. consolidated financial statements Year ended 31 March 2019

Notes (continued)

1 Significant accounting policies (continued)

Interest receivable and interestpayable

Interest payable and similar charges include interest payable and financeleases recognisedin profit or loss using the effective interest method, unwinding ofthe discounton provisions, and net foreign exchangelossesthat are recognised

in theprofit and loss account(see foreign currency accounting policy).

Interestincome andinterest payable are recognisedin profit or loss as they accrue, using the effective interest method.

. Turnover

Turnover represents the amounts, excluding value added tax, derived from the provisions of solutions to third party customers. Solutions can be provided in. four ways: as software licence and related service sales, under facilities management contracts, under businesstransformation contracts and under business process outsourcing contracts. Turnover for the supply of services represents the value of services provided under contracts to the extent that there is-a right to consideration and is recorded at the fair value ofthe consideration received or receivable. Where a contract has only been partially completed at the balance sheet date turnover represents the fair value of the service provided ‘to date based on the stage ofcompletion ofthe contract activity at the balance sheet date. Where payments are received from customers in.advanceofservices provided, the amounts are recorded as deferred income and included as part of creditors.

Retirement benefits

For defined contribution schemes the amount charged to the profit and loss accountin respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between.contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

Leases ,

Assets held under finance:leases and other similar arrangements, which confer rightsand obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception ofthe lease) andare depreciated overthe

shorter of the lease terms and their useful lives. The capital elements of future obligations are recorded asliabilities,

while the interest elements. of the rental obligations are chargedto the profit and loss account over the periods of the leases and to produce a constant periodic rate of interest on theremaining balanceoftheliability.

Rentals under operating leases are charged in the profit and loss account on a straight line basis over thelease. term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on straight-line basis over the lease term.

(25)

Annualreport and consolidated financial statements Year ended 31 March 2019

Notes (continued)

2 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are describedin note 1, the directors are required to

make judgements, estimates. and assumptions about the carrying amounts ofassets andliabilities that are not readily

apparent from other sources. The estimates and associated assumptions are based onhistorical experience and other

factors that are considered to be relevant. Actual results may ditter from these estimates.

The estimates and underlying assumptionsare reviewéd on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimateis revised if therevision affects only that period,orin the period of

the revisionand future periods if the revisionaffects both current and future periods.

The following are the critical judgements thatthe directors have made in the process ofapplying the Group's accounting policies and that have the most significant effect on the amounts recognisedin the financial statements.

. Revenuerecognition

Due. to the complexity of some of the Group’s contracts, there are judgements to be applied, including the measurement and timing of revenue recognition and the recognition of assets and liabilities that result from the

performanceofthe contract.

Research and developmentcosts

In line with FRS 102, the Group capitalises expenditure on developmentactivities where that expenditure meets the

requirements of the standard i.e. a product or process is technically and commercially feasible, the.Group intends and

has the technical ability and sufficient resources to complete development, future economic benefits are probable and

the Group can measure reliably the expenditure attributable to theintangible asset during its development. Projects

are assessed on an individual basis to determine which activities meet the eligibility criteria for capitalisation as an intangible asset. The days attributable to eligible activities based on the time recording system, together with management assessmentof percentage attributable where required, are multiplied by the relevant day. rate for that period and capitalised. Eligible non-staff costs are also capitalised where relevant.

There are also judgements applied to the period over which the costs will be recovered. This determines the

amortisation period appropriate for the asset:

3 Turnover

Turnover by destination was UK £73,913k (2018: £85, 300k) andrest of the world £1,543k (20/8: £2, 112k). The table below sets out information for each of the group’s industry segments:

Portfolio income. - Software Services Total -2019 2018 2019 2018 2019 2018 2019 2018 £000 . £000 £000 £000 £000 £000. £000 £000 Turnover - 88 22,937 29,512 52,519 57,812 75,456 87,412.

(26)

Notes (continued)

4 Finance costs (net)

Interest payable and similar expenses

Bankiriterest and charges

Hire purchase and finance interest

Other finance costs

Interest receivable and similar income

Otherinterest receivable and similar income

5 Staff numbers.and. costs

Target Group Limited , Annualreport and consolidated financial statements.

Year ended 31 March2019

Year ended 31 March 2019 £000

Year ended

31 March 2019 £000 8 ce | Period ended 31 March 2018 £000 210 85-318 Period ended 31 March 2018 £000 29 29

The. average number of persons employed by the Group(including directors) during the year, analysed by category,

was as follows:

4

Technicaland operational .

Sales, marketing, management and administration

The aggregate payroll costs of these persons were as follows:

‘Wages andsalaries Social security costs Pension costs Numberof‘employees Year ended 31 March 2019 870 131 1,001 Year ended 31 March2019 £000 30,464

3,012

1,625

35,101 Period ended 31 March 2018 832 157 989 Period ended 31 March 2018 £000

37,690

5,201

2,059

44,950 °

24

tinae nn ne ac won un a

(27)

Target Group Limited Annual report and consolidatedfinancial statements Year ended 31 March2019

Notes (continued)

6 Profit before taxation

Year ended Period ended 31 March 2019 31 March 2018 £000 . £000 Profit before taxation is stated after charging/(crediting):

Amortisation.of goodwill (note 10) 158 197 Amortisation of other intangibleassets (note 10) 2,693 948 Depreciation (note"11)

Owned : 1,511 1,377

Leased

1,010

1,551

Rentalsunder operating leases - property 1,085 1,386 Foreign exchangeloss / (gain) 21 61

Profit on disposäl of owned loan portfolio

-

(529)

' Auditor’s remuneration:

Audit ofthese‘financial statements 37 . 20 Audit of financial statements of other group companies pursuantto 37 38

legislation . o

Other assurance services ‘ 19 19

Auditor’s remuneration in respect of the company. was £37k (2018: £20k). Audit of other group companiesrelates to theaudit fees for the subsidiaries Harlosh Limited, Target ServicingLimited, Target Financial Systems Limited and Elderbridge Limited and the parent companies Target TG Investments Limited and Target Topco Limited.

Amortisation and impairment charge

The amortisation, impairment charge and impairment reversals are recognised in the following line items in the profit and loss account:

2019 2018 £000 £000

Administrative expenses 2,851 1,145

7 Profit and Joss accountof parent company

As permitted by Section 408 of the Companies Act 2006, the profit and loss account or statement of. other comiprehensive incomeis presented in réspect of the parent Company. The profit attributable to the. Company is disclosed in the footnote to the Company’s balance sheet.

(28)

Notes (continued)

8 ‘Directors’ remuneration

Emoluments ofthe directors were as follows:

Directors’ emoluments

Companycontributions to money purchase pension scheme

The numberofdirectors who:

Are members ofa moneypurchase pension scheme.

Had awards receivable in the form ofsharesunder a long-term incentive scheme

Annual report and consolidated financial statements Year ended 31 March 2019 °

Year ended Period ended

31 March 2019

31 March 2018

£000

850 1,395

40

66

890 1,461

3

6

3

2

The aggregate of emoluments of the highest paid director were £281k (2018: £374k) and company pension contributions óf £16k(2018: £20k) were made to a money purchase pension plan on his behalf.

9 Taxation

The tax charge for the period comprises:

‚Current tax ; UK Corporation tax on profit for the period/year ’ Adjustments inrespect ofprior periods.

Total current tax charge Deferred tax: _

Origination andreversalof timing‘differences Adjustments inrespect of prior periods _ Total deferred tax charge

Total tax charge on profit

31 March 2019 31 March 2018 ‘£000 £000 997 811 (26) (23) 971 : : 788 55 : 663

- 609

168.

664 831

1,635

-

1,619

26

(29)

Target Group Limited Annual report and. consolidated financial statements Year ended 31 March 2019

Notes (continued)

A

9 Taxation (continued)

The.tax charge is higher (2018: higher) than the standard rate.of.corporation tax inthe UK of 19% (2018: 19.2%) as

explainedbelow:

‘ 31 March.2019 3.1 March 2018

£000 £000

Profit for the year/period

3,619

6,056

Total tax charge \ 1,635 1,619 Profit excluding taxation 5,254 “7,675

Tax at 19% (2018:19.2%)

|

998 1,474

Effects of:

Expenses not deductiblefor tax purposes . 46. 80

Grouprelief claimed

-

(10)

Tax lossesutilised in the year

‚

8 (70)

Adjustments in respect.ofprior periods . : 583 145 Total charge for the year/period as above ; 1,635 1,619 A reductionin the rate from 19% to 17% is enactedand effective from 1 April 2020,this will reduce thecompany's (Groups) future tax charge accordingly: .

10 Intangible Fixed Assets

„ Group’ ; Company

Development Brand Customer Goodwill Total Development

costs contracts . ~ . costs

£000 £000 £000 £000 £000. £000 Cost o . o ( Ät1 April 2018 5,912 145 213 5,917 12,187 * 5,710 Additions _ : 871 - - - 871 871 At31 March 2019 6,783 145 213 5,917 13,058 6,581 Ainortisation : At 1 April 2018 1,297 47 69 5,386 6,799 1,166

Charge forthe year 2,624 28 Al. 158 2,850 2,584

At 31 March 2019 3,921 75 110 5,544 9,650 3,750

Net book value

At 31 March 2019 2,862. 70 103 373 3,408 2,831

At 31 March2018 4,615 99 146 529 5,389 4,544

(30)

Notes (continued)

10 Intangible Fixed Assets (continued)

Development costs have been capitalised in accordance with the requirements of FRS 102 and are therefore not treated,for dividend purposes,as a realised loss. These costs are being amortised overthe life of the Project to which they relate on a straight-line basis, which.is no more than 5 years.

' Goodwill arising on the acquisition ofHarlosh Ltd was amortised fully in the prior year, it was being amortised evenly

over the directors’ estimate of its useful economiclife of 10 years.

Goodwill arising on the acquisition of Commercial First Mortgages Ltd’s trade and assets is being amortised evenly

overthe directors’ estimate ofits useful economic life of 5 years,

jl. . Tangible fixed assets

Short Computer

Fixtures

Total

x

leasehold equipment

and

Group property fittings

£000 £000 £000 £000

Cost

At 1 April 2018 315 19,621 2,213 22,149 Additions - 2,356 115 2,471

Disposals

-

(81)

-

(81)

At 31 March 2019 315 21,896 2,328 24,539 Depreciation At 1 April 2018 194 14,581 1,625 16,400 Charge for the period . 28 2,287 206 2,521

Disposals

-

(56)

-

(56)

At 31 March 2019 222 16,812 1,831 18,865 Net book value

At 31 March 2019 93 5,084 497 5,674 'At31 March 2018 11 5,040 588 5,749 The Group has leased IT equipment and infrastructure which are considered to meet the definition of finatice leases and are accounted for accordingly.

Includedintangible fixed assets of the Group are assets held under hire purchasé and finance leasé agreements with a cost and net book value at: 31 March 2019 of £7,243k and. £1,422k respectively (2018: £7,342k and£2,513k). The associated depreciation. for the period:on those assets was £1,010k(20/8: £1,551%).

(31)

Notes (continued)

11 Tangible fixed assets (continued)

Company Cost At 1 April 2018 Additions Disposals e At:31 March 2019

Depreciation

At 1 April 2018

Chargefor thé period

Disposals At 31 March 2019 Net book value

At 31 March 2019

At 31 March 2018

Target Group Limited Aniualreport and consolidated financial statements. Year ended 31 March 2019 .

Short Computer Fixtures Total leasehold | equipment and

property fittings £000 £000 £000 £000 255 13,250 1,050 14,555 1,953 61 2,014 - (81) - (81) 255 15,122 1,111 16,488

179 9,280

727 10,186

22 1,738 109 1,869 - (56) - (56) 201 , 10,962 836 11,999 54 4,160 > 275, 4,489 76

3,970

323 4,369

Included in tangible fixed assets of the Company are assets held under hire purchase and finance: lease agreements with a cost and net book value at 31 March 2019 of £5,331 and £1,361 respectively (20/8: £5,412k and £2, 3824). The associated depreciation for the period on those assets was £940k (2018: £1,225k).

12 Investmentin subsidiary undertakings - Company

Cost

At1 April 2018 and 31 March 2019

Provisions

At | April 2018 and 31 March 2019

Net book. value u

At-31 March 2018 and 31 March 2019.

£000 17,976

3,089

14,887

The directors assessed the carrying value of the company’s investment in subsidiaries at period end’ andare of the opinion that they are not worth less thanthe carrying value in the financial statements.

(32)

Notes (continued)

12 Investment in subsidiary undertakings (continued) The company’s wholly ownedsubsidiaries at 31 March 2019 were:

Country of

Principal

Target Group Limited Annual report and consolidated financial statements

Class ofshares

incorporation activity Subsidiary undertakings

Target Servicing Limited UK Provision of businessprocess Ordinary

outsourced services

Harlosh Limited UK Provision of computer applications Ordinary-software and related. services

Harlosh New Zealand Limited New Zealand Provision of computer applications Ordinary software and related services

Target Financial Systems Limited UK Management ofowned loan Ordinary portfolios

Elderbridge Limited UK Lenderofrecord for loan Ordinary portfolios Percentage ownership 100% 100% 100% 100% 100% The registered officeof all UK subsidiary companies is Target House, Cowbridge RoadEast, Cardiff, CF11 9AU.

HarloshNew Zealand Limited has a registeredoffice: c/o Ulrich Lander Limited, 21 Broderick Road, Johnsonville,

Wellington, 6037, New Zealand. The entity ceased to trade during the year. 13 Debtors

Trade debtors

‘Gross amount due from customers for contract work**

Other debtors

Prepayments and.accrued income Deferred tax asset (note 16) ** Amountsdue from group undertakings

** Included inthe above figures are the following amounts due after more than oneyear:

Gross amountdue from customers for contract work

Deferredtax asset (note 16)

Group _ Company

2019

2018

2019

2018

£000

7,226

5,371

748

902 4,601

7,372

1,957

3,014

86

398

5

325 7,496

8,809

1,952

1,282

155

818

53

772 5,657

5,734.‘

6,778

7,310

25,221

28,502

11,493

13,605

Group Company

2019

-

2018.

2019

2018

£000

923 1,560

796 1,560

-

818 -

772

923 2,378

796 2,332

30

(33)

Notes (continued)

14 Creditors: amounts falling due within one year

Obligations under finance leases

Tradecreditors Corporation. tax

Other taxes and social security costs Othercreditors:

Accruals anddeferred income

Amounts due to group undertakings

o Target Group Limited Annualreport and consolidated financial statements Year ended 3] March 2019

15 Creditors: amounts falling due after more than one year

Obligations underfinance leases (amounts payablein the secondto fifth years inclusive)

Accruals and deferred income

Group Company 2019 2018 . 2019 2018 £000 £000 £000 £000 669 1,147 669 1,147 1,047 2,723 472 1,229 826 107 301 >

1,818

1,449

(5)

-178 306. 174 296 7,840 7,497 2,580 2,733 - - 23,909 18,717 12,378 13,229 28,100 24,122

Group.

Company

2019 2018 2019 2018 £000 £000 £000 £000. 1,125 1,649 1,125. 1,649 2,992 3,176 - -4,117 4,825 1,125 1,649

31

(34)

Notes (continued)

16 Deferred taxation

At beginning ofyear/period - asset

(Charge) / credit for the year in the P&L account

At.end of year/period — asset (note 13)

The deferred tax asset comprises Tax losses carried forward Other timing differences

A further deferred tax asset of£41k (20/8: £41B for the group and £41k (2078

,

Target Group Limited - Annual report and consolidated financial statements

recognisedduetouncertaintyover its future utilisation.It is made up as. follows:

The unprovided deferred tax asset comprises Tax lossés carried. forward

“17

Sharecapital

Allotted, called-up andfully paid

At 31 March 2018 and 31-March 2019 - -

--Allötted, called up.andfully paid — At31 March 2018 and 31 March 2019

Ordinary shares

of 5p each

Nuniber

11,557,417

Ordinary Shares

of5p each £000 578 158 Group Company 2019 2018 "2019 2018 £000 £000 ‘£000 £000

818 _ 1,658

772 1,004

(663)

(840)

(19)

(32)

155 818 53 772 Group Company 2019 2018 2019 2018 £000 £000 £000 £000

-

544 -

498

155 274 53 274 155 818 53 772

: £41k) forthe company has not been

2019

2018

2019

2018

£000 £000 £000 £000

41

41 a

41

4a 41 41 41

‘A’ shares ‘B’ shares of Total of 5p each 5p each

Number Number Number

1,476,287 3,161,200 16,194,904

‘A’ Shares

‘B’ Shares of

Total

of Sp each

Speach

:

£000 £000 £000 -74 810

Target Group Limited