Tritech Group Limited - Limited company accounts 18.2

REGISTERED NUMBER: 05435846 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 March 2018

for

Tritech Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

I J Walker

M Parry

S Goodfellow

A R White

S J Goodier

F D Neterwala

A F Neterwala

S S Docherty

SECRETARY:

M Parry

REGISTERED OFFICE:

Bridge Road North

Wrexham Industrial Estate

Wrexham

Clwyd

LL13 9PS

REGISTERED NUMBER:

05435846 (England and Wales)

SENIOR STATUTORY AUDITOR:

Adam Clarke BA FCA

AUDITORS:

Mitten Clarke Audit Limited

Statutory Auditors

The Glades

Festival Way

Stoke on Trent

Staffordshire

ST1 5SQ

The directors present their strategic report of the company and the group for the year ended 31 March 2018.

REVIEW OF BUSINESS

Introduction

Tritech Group was founded in 1982 as a center of excellence for providing investment casting products and

services. Today, the company is owned by Uni-Deritend which is part of the Neterwala group of companies in

India. The origins of the company in investment casting still dominate activities but continuous developments,

which have included new acquisitions, new applications and process improvements, have seen the business go

from strength to strength.

The financial measures used by the Group is set out below:

The financial review provides a summary of how the Group has performed during the year and provides

additional information to that contained within the financial statements. The report also comments further on

the Group's profitability and cash flow and the key performance measures that are used to manage the ongoing

performance of the Group.

Financial Overview

This financial year has continued the progress that it made in year 2016-17. Turnover has increased from £29.7

million to £33.2 million. This is an increase of 11.8% on top of the 13% increase last year.

Looking towards 2018-19 the business is growing again and has the order book to grow organically by a further

12%. Plans are in place to support this growth. This includes strengthening learning and development for the

employees via heightened HR practices, increasing expertise within New Business Development and sites re

layout with upgraded equipment.

The manufacturing site in India has now started production and product is now flowing into our UK operations.

This has been a five year project on a green field site and we can now claim to be the first aluminium Investment

Casting supplier into Aerospace within India.

A range of business improvement initiatives that were undertaken during FY17-18 are expected to show through

in performance during FY18-19. Because of this the directors are expecting a more profitable year this next

coming year.

Our views on the creation of long term value for our shareholders have not changed since they were set up four

years ago. We believe long term value is achieved by sales growth, profitability, cash generation and strong

return on capital employed. These shared views drive decision making and behavior in the Group with the

financial objectives aligned to this end and focused on five key objectives:

- Increasing revenue;

- Improving operating margins;

- Maximising return on capital employed;

- Maximising free cash flow.

- Focus on "Right First Time" manufacturing.

The five year record of financial performance metrics is set out below:

2018

2017

2016

2015

2014

Sales turnover

£33.2m

£29.7m

£26.2m

£29.1m

£27.3m

Gross profit

£2.75m

£8.55m

£7.35m

£8.30m

£9.18m

EBITDA

£2.75m

£2.87m

£2.04m

£2.69m

£4.11m

EBITDA % of sales

8.3%

9.7%

7.8%

9.2%

15.1%

Profit/(loss) before tax

£0.70m

£1.32m

£0.03m

£0.91m

£2.64m

Financial Results

For the year ended 31 March 2018, Group revenue increased by £3.5 million and 11.8% to £33.2m (2017: £29.7).

This was very encouraging and in 2018-19 we expect similar improved sales growth in the next twelve months

and already have received orders to the tune of ninety per cent of the budget.

Gross profit of £9.55m was £370k up on last year. The gross margin percentage was 28.8% which was down on

last year's result. Operating profit also decreased from £1.4 million to £801k.

Business performance was affected by a high degree of New Part Introduction and the affect of expanding

operations into an adjacent new site at our main foundry in Wrexham together with focused support being given

to our expanding operation in India.

Cash Flow

Tight control of working capital has been maintained and better stock planning has led to a much tighter control

of stocks.

Capital Expenditure

During the year the Group invested £1.85 million (2016-17: £1.87m) in capital expenditure. Capital expenditure

is subject to capital appraisal reviews with clear authority levels in place throughout the Group.

PRINCIPAL RISKS AND UNCERTAINTIES

Mitigating Potential Risks to the Business

Tritech is benefitting by being part of many long term and growing programs with our valued long term

customers. It is important that the business is ready to absorb the growth. The expansion plans which started in

2016 (addition of adjacent new site for the Wrexham foundry and plans in place for expansion of the Wrexham

machining facility) puts the business in a good position to deal with uplift in business. Also we have the ability to

'share' business around the 4 foundries within the Group (Includes the India operation) with customer approval.

The business has good long term visibility of customer orders (up to 18 months) and good intelligence of the

various programs of work we are engaged upon. This enables early warning of capacity and manning level

requirements, and also gives pre warning of any potential reductions to the order book so that corrective actions

can be taken.

Financial risks

The objectives of the group are to manage its financial risk and to minimise the adverse effects of fluctuations in

the financial markets on its financial assets and liabilities, on reported profitability and on its cash flows. The

main risks associated with the group's financial assets and liabilities are set out below:

Interest rate risks

The group finances its operations through a mixture of retained profits and external borrowings. The external

borrowings are at floating interest rates.

Liquidity risk

The group aims to mitigate liquidity risk by managing cash generated by its operations. Authorisation limits are

in place for all types of expenditure.

Foreign currency risk

The group's transactions are predominantly in Sterling, US Dollar and Euros. The group seeks to mitigate the

effect of its structural currency exposure by purchasing in the same functional currency as it sells. The group

does not hedge any currency exposure.

Credit risk

The group's objective is to reduce the risk of financial loss due to a customer's failure to honour its obligations.

All customers are subject to credit control procedures and each customer has an appropriate credit limit set.

Where credit risk is perceived, payment must be made by letter of credit or payment in advance of

sale/distribution.

ON BEHALF OF THE BOARD:

M Parry - Director

12 September 2018

The directors present their report with the financial statements of the company and the group for the year

ended 31 March 2018.

PRINCIPAL ACTIVITY

The Group's principal activities during the year continued to be the manufacture of precision investment

castings.

DIVIDENDS

Interim dividends of £403,420 were paid during the year.

The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 31st March 2018 will be £403,420.

RESEARCH AND DEVELOPMENT

During the year the company undertook research and development activities.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2017 to the date of this

report.

I J Walker

M Parry

S Goodfellow

A R White

S J Goodier

F D Neterwala

A F Neterwala

S S Docherty

Other changes in directors holding office are as follows:

R Ramkumar - resigned 30 June 2017

GOING CONCERN

After making enquiries the directors have a reasonable expectation that the group has adequate resources to

continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going

concern basis in preparing the financial statements. Further details regarding the adoption of the going concern

basis can be found in note 2, accounting policies.

DISABLED EMPLOYEES

Applications for employment by disabled persons are always fully considered, bearing in mind the abilities of the

applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that

their employment with the Company continues and that appropriate training is arranged. It is the policy of the

Company that the training, career development and promotion of disabled persons should, as far as possible, be

identical to that of other employees.

EMPLOYEE CONSULTATION

The Group places considerable value on the involvement of its 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. Employee representatives are consulted regularly

on a wide range of matters affecting their current and future interests.

DISCLOSURE IN THE STRATEGIC REPORT

The review of business and the principal risks and uncertainties applicable to the group are included in the

Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the

financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law

the directors must not approve the financial statements unless they are satisfied that they give a true and fair

view of the state of affairs of the company and the group and of the profit or loss of the group for that period.

In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain

the company's and the group's transactions and disclose with reasonable accuracy at any time the financial

position of the company and the group and enable them to ensure that the financial statements comply with the

Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and

hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he

ought to have taken as a director in order to make himself aware of any relevant audit information and to

establish that the group's auditors are aware of that information.

AUDITORS

Mitten Clarke Audit Limited, has indicated its willingness to continue in office and will be proposed for

re-appointment in accordance with section 485 Companies Act 2006.

ON BEHALF OF THE BOARD:

M Parry - Director

12 September 2018

Opinion

We have audited the financial statements of Tritech Group Limited (the 'parent company') and its subsidiaries

(the 'group') for the year ended 31 March 2018 which comprise the Consolidated Income Statement, Consolidated

Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of

Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the

Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant

accounting policies. The financial reporting framework that has been applied in their preparation is applicable

law and 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2018 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable

law. Our responsibilities under those standards are further described in the 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 UK, including the FRC'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.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

Group Strategic Report and the Report of the Directors, but does not include the financial statements and our

Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or

our knowledge obtained in the audit or otherwise appears to be materially misstated. If, 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and 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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent

company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and

using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent

company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes

our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial

Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report

of the Auditors.

Use of our 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 a Report of the Auditors 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.

Adam Clarke BA FCA (Senior Statutory Auditor)

for and on behalf of Mitten Clarke Audit Limited

Statutory Auditors

The Glades

Festival Way

Stoke on Trent

Staffordshire

ST1 5SQ

12 September 2018

TURNOVER

3

33,162,635

29,725,311

Cost of sales

24,727,485

21,212,072

GROSS PROFIT

8,435,150

8,513,239

Administrative expenses

7,347,067

6,949,350

1,088,083

1,563,889

Other operating income

96,000

235,169

OPERATING PROFIT

5

1,184,083

1,799,058

Interest receivable and similar income

2,302

7,823

1,186,385

1,806,881

Interest payable and similar expenses

6

533,452

497,493

PROFIT BEFORE TAXATION

652,933

1,309,388

Tax on profit

7

157,260

222,495

PROFIT FOR THE FINANCIAL YEAR

495,673

1,086,893

Profit attributable to:

Owners of the parent

345,639

996,937

Non-controlling interests

150,034

89,956

495,673

1,086,893

PROFIT FOR THE YEAR

495,673

1,086,893

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

495,673

1,086,893

Total comprehensive income attributable to:

Owners of the parent

345,639

871,182

Non-controlling interests

150,034

215,711

495,673

1,086,893

FIXED ASSETS

Intangible assets

10

761,722

860,093

Tangible assets

11

7,657,387

6,924,192

Investments

12

-

-

8,419,109

7,784,285

CURRENT ASSETS

Stocks

13

9,470,053

9,195,913

Debtors

14

9,847,470

10,016,307

Cash at bank

687,607

675,314

20,005,130

19,887,534

CREDITORS

Amounts falling due within one year

15

16,781,112

16,880,220

NET CURRENT ASSETS

3,224,018

3,007,314

TOTAL ASSETS LESS CURRENT LIABILITIES

11,643,127

10,791,599

CREDITORS

Amounts falling due after more than one year

16

(2,691,167

)

(1,937,214

)

PROVISIONS FOR LIABILITIES

20

(631,900

)

(626,578

)

NET ASSETS

8,320,060

8,227,807

CAPITAL AND RESERVES

Called up share capital

21

5,764,076

5,764,076

Retained earnings - unrealised

22

1,058,455

1,162,982

Other reserves

22

124,000

124,000

Retained earnings

22

1,007,784

961,038

SHAREHOLDERS' FUNDS

7,954,315

8,012,096

NON-CONTROLLING INTERESTS

23

365,745

215,711

TOTAL EQUITY

8,320,060

8,227,807

The financial statements were approved by the Board of Directors on 12 September 2018 and were signed on its

behalf by:

I J Walker - Director

M Parry - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

-

-

Investments

12

11,025,528

11,025,528

11,025,528

11,025,528

CURRENT ASSETS

Debtors

14

213,945

228,884

CREDITORS

Amounts falling due within one year

15

1,005,000

1,019,412

NET CURRENT LIABILITIES

(791,055

)

(790,528

)

TOTAL ASSETS LESS CURRENT LIABILITIES

10,234,473

10,235,000

CREDITORS

Amounts falling due after more than one year

16

500,000

500,000

NET ASSETS

9,734,473

9,735,000

CAPITAL AND RESERVES

Called up share capital

21

5,764,076

5,764,076

Other reserves

22

124,000

124,000

Retained earnings

22

3,846,397

3,846,924

SHAREHOLDERS' FUNDS

9,734,473

9,735,000

Company's profit for the financial year

402,893

500,000

The financial statements were approved by the Board of Directors on 12 September 2018 and were signed on its behalf by:

M Parry - Director

I J Walker - Director

Called up

Retained

share

Retained

earnings

capital

earnings

- unrealised

£

£

£

Balance at 1 April 2016

5,764,076

457,945

1,169,138

Changes in equity

Dividends

-

(500,000

)

-

Total comprehensive income

-

1,003,093

(6,156

)

Balance at 31 March 2017

5,764,076

961,038

1,162,982

Changes in equity

Dividends

-

(403,420

)

-

Total comprehensive income

-

450,166

(104,527

)

Balance at 31 March 2018

5,764,076

1,007,784

1,058,455

Other

Non-controlling

Total

reserves

Total

interests

equity

£

£

£

£

Balance at 1 April 2016

124,000

7,515,159

-

7,515,159

Changes in equity

Dividends

-

(500,000

)

-

(500,000

)

Total comprehensive income

-

996,937

215,711

1,212,648

Balance at 31 March 2017

124,000

8,012,096

215,711

8,227,807

Changes in equity

Dividends

-

(403,420

)

-

(403,420

)

Total comprehensive income

-

345,639

150,034

495,673

Balance at 31 March 2018

124,000

7,954,315

365,745

8,320,060

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 April 2016

5,764,076

3,846,924

124,000

9,735,000

Changes in equity

Dividends

-

(500,000

)

-

(500,000

)

Total comprehensive income

-

500,000

-

500,000

Balance at 31 March 2017

5,764,076

3,846,924

124,000

9,735,000

Changes in equity

Dividends

-

(403,420

)

-

(403,420

)

Total comprehensive income

-

402,893

-

402,893

Balance at 31 March 2018

5,764,076

3,846,397

124,000

9,734,473