Trifast plc

Annual Report for the year ended 31 March 2022

Growing

sustainably,

together

Trifast plcAnnual Report for the year ended 31 March 2022

Welcome

from our Chair,

Jonathan Shearman

Key highlights

It is my pleasure to invite

you to read more about

the ongoing journey of

delivering the potential

thatlies within Trifast

Revenue growth (CER)

+18.7%

Underlying operating proﬁt

growth (CER)

+27.1%

Underlying ROCE

+150bps

£223.3m

2022

£15.2m

2022

8.3%

2022

£188.2m

2021

£12.0m

2021

6.8%

2021

£200.2m

2020

£15.8m

2020

8.8%

2020

1. Before separately disclosed items (see notes 2 and 32)

GAAP measures

FY2022

change FY2021 FY2020

Revenue growth

218.6 16.2%

188.2 200.2

Operating proﬁt

11.6 32.5%

8.8 4.1

OP %

5.3% 60bps

4.7% 2.0%

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 01

Contents

Strategic report

Highlights 01

Purpose, vision,

missionandstrategy 02

Our culture 03

Chief Executive

Ocer’s review 04

Investment case –

key reasons to invest 08

Driving growth through

ourbusiness model 10

Key strategic indicators 12

Key performance indicators 14

Investment case 16

A global leader in

attractive markets 16

Ambitious growth strategy 26

Robust balance sheet and

focus on capital allocation 38

Focus on sustainability 42

Financial review 52

Risks 60

Sustainability 66

Stakeholders 66

Our people 74

Our community 80

Act on environment and

climate change 82

Build a sustainable

supply chain 84

Enable sustainable

innovation 85

Task Force on

Climate-relatedFinancial

Disclosures (TCFD) 86

Non-ﬁnancial reporting

compliance statement 89

Governance

Chair’s introduction

togovernance 90

The Board 92

Operational Executive Board 94

Corporate governance report 96

Nomination Committee report 101

Audit & Risk

Committee report 104

Directors’ remuneration

report 109

Directors’ report 130

Statement of Directors’

responsibilities 133

Financial statements 134

Additional information 198

• Strong recovery in HY1 and robust growth in HY2

drives a year-on-year revenue increase of 18.7%

(organic 15.9%; acquisition 2.8%, 8.9% organic

increase at CER against FY2020)

• Successful phase one price increase negotiation,

implemented to mitigate cost inﬂation, returns gross

margins in the month of March 2022 much closer to

historic levels

• Underlying operating margins increase to 6.8%

(FY2021: 6.4%), as strong sales growth osets

overhead normalisation

• Strong ﬁnancial position allows further investment

in inventory to support sales growth and protect

supply, even as lead times remain at historic highs

• Falcon acquired – a ﬁrst step onourambitious North

American acquisitionjourney

• Project Atlas, phased roll-out to our largest subsidiary

underway, completion expected by endof 2022

Highlights

• Focus on emerging markets as disruption drives

opportunity, including EV and 5G

• Distributor sector sales expected to remain high,

assupply chain challenges persist

• Very strong growth expected to continue in North

America as:

• TR Falcon post-acquisition business plan drives

expansion into ET&I and general industrial

• Organic light vehicle market share gains continue

• Health & home, strong trading expected to

continue in Asia, European demand impacted

by ongoing Ukraine conﬂict and downturn in

consumersentiment

• High growth at our Hungarian (ET&I) and PTS

(distributors) businesses, supported by the move

tolarger premises

• Market share gains across the world help to oset

semi-conductor shortages in the light vehicle sector

• Risk of recurring lockdown disruption could impact

sales at our Chinese location

• Revenue growth to become a function of both

volume and price as inﬂationary pressures persist

• Greater emphasis on product-range expansion and

an engineering-led approach to market, to support

customer acquisition and development

• Macro uncertainties, including recessionary concerns,

have potential to impact markets in the shorter term

Looking ahead

Strategic report

02 Trifast plcAnnual Report for the year ended 31 March 2022

Trifast is a leading international specialist in the design,

engineering, manufacture and distribution of high-quality

industrial fastenings and Category ‘C’ components,

principally to major global assembly industries

Purpose, vision,

mission and strategy

Our purpose

To provide Trusted

Reliabilityat every turn to our

customers, suppliers and our

people, empowering them to

deliver sustainable products

and solutions that add value

to society and our planet

Our vision

To enable innovation today

fora better tomorrow

Our strategy

Investing for organic growth

Read more on page 34

Our mission

To promote an environment that

is safe and fair, which motivates,

develops and maximises the

contribution and potential of

allemployees

To be acknowledged commercially

as the market leader in industrial

fastenings in terms of service,

quality, design, engineering

support, ESG (environmental,

socialand governance), together

with brand reputation

To continue to grow proﬁtability,

improve stakeholder returns

through organic and acquisitive

growth, and by driving continual

eciencies throughout

theorganisation

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 03

By working together, we can generate sustainable

growth.Our strong values and culture enable us to

continue to deliver and grow despite challenging

macroeconomic conditions

Our

culture

Our values

Trusted

The organisation

and its employees

need to trust each

other – colleagues

need to trust

each other – the

organisation needs

to instil trust in its

stakeholders

Reliable

We do what we say

we will do when

we say we will do

it – both inside

and outside of our

organisation

Inclusive

We work together

as a team and

respect each other

Fair

We are thoughtful

of every individual

and consistent in

how we interact

Ethical

We are mindful

of ourimpact

on othersand

the environment

and demonstrate

integrity in all

ouractions

Excellent

We add value

and quality

to everything

we dofor our

customers and

other stakeholders

Cultural pillars

Being inclusive

but pragmatic

andempowering

A ‘Can Do’ attitude,

working in an agile

manner to deliver

practical results

Engaging with

employees regularly

andmeaningfully

Providing

development

opportunities

Listening

Working together

as aprofessional

globalteam

Communicating

openly,positively

andregularly

Investing in the

future – people/

product/property

Saying thank you,

beingthoughtful and

kind to each other

Celebrating

success

Strategic report

04 Trifast plcAnnual Report for the year ended 31 March 2022

Introduction

Over the last few years, we have seen the world change

dramatically creating opportunities and challenges

along the way. As a Group we have come together and

met those changes head on. The combination of the

Covid-19 pandemic and the Ukraine conﬂict has aected

everyday life around the world in so many dierent ways.

In business, further obstacles have created a combined

macroeconomic backdrop not seen commercially for

many decades, manifesting in commodity shortages,

tosupply chain logistics disruption, plant lockdowns,

andsigniﬁcant cost inﬂation.

Yet despite these challenges, we have had our best

trading year ever by revenue, with growth of 18.7%. This

resulted in underlying operating proﬁt increasing by 27.1%.

Gross margins at the end of March moved much closer

to our historic levels and all regions delivered proﬁtable

growth. In the summer we also acquired Falcon Fastening

Solutions Inc. as part of our strategy to both grow and

rebalance our North American region and I am pleased

to report that TR Falcon revenue is performing slightly

ahead of our original expectations.

We have had to operate smarter, collaborating much more

with our customers and suppliers to ensure our Trusted

Reliability of supply. I am incredibly proud of how our

teams globally have managed it, thanks to the strong

relationships that they have developed over many years.

I want to take this opportunity to acknowledge the hard

work and commitment of all my colleagues around the

world, as none of this could have been possible without

their dedication, and their ‘can do’ spirit.

Overview

At the beginning of the ﬁnancial year the Covid-19

vaccination programme began to be rolled out and

life started to return to some form of new normality.

We adapted our working practices to ensure all our

people continued to remain safe and that the Group

adhered to local government regulations. While virtual

communications cut down travel costs and in the main

made us more productive, we recognised the importance

of working together face-to-face and the comradery that

this achieves. The opening up, therefore, of restrictions

towards the end of 2021 and into 2022 has been

very much welcomed, enabling us to visit and, more

importantly, continue to support our people around the

business. We are mindful that potential risks associated

with Covid-19 remain in many parts of the world, as

the recent lockdowns in Shanghai have evidenced,

however this has had limited impact on FY2022 and

we will continue to adapt our business to ensure our

people remain safe and that we are able to service

ourcustomerseectively.

As we approach our 50year

anniversary in 2023, Iam

pleased to see how our

business is transforming, from

an international company with

individual operations worldwide,

to a more global company,

working together as one team

Chief Executive

Ocer’s review

Mark Belton

Chief Executive Ocer

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 05

Following change and technological developments

in our end markets, we revisited our sector analysis in

FY2021 to better reﬂect how we view these markets

and the opportunities within them. All sectors within

the period showed growth, despite the ongoing supply

chain disruption and the temporary factory closures

across several of our global OEMs. In particular, we

are very pleased to have delivered growth of 7.4% in

our Light Vehicle (LV) sector, which represented an

outperformance of c.9% against an automotive market

that has been subject to signiﬁcant short-term challenges.

We are delighted to report that we have successfully

added a number of contractual wins to our order book

both from existing and new customer relationships across

our key sectors. Sales to distributors and energy, tech

& infrastructure (ET&I) sectors were driven by strong

underlying demand. We have also continued to see an

increased number of opportunities develop in the electric

vehicle (EV) market.

Our North America region continues to go from strength

to strength, with very strong organic revenue growth

further supplemented by acquisition growth from

TRFalcon.

The Ukraine conﬂict has exacerbated wider supply

chain disruption, especially in Europe. The direct impact

on the business has been minimal with less than 1% of

Group revenue going into Russia and Ukraine, however a

number of our global customers operating in Europe do

also include Russia as an end market which is impacting

volumes at speciﬁc locations. On behalf of all of us at

Trifast our thoughts go out to all those aected by this

conﬂict and we hope the situation can be resolved quickly

and family and friends reunited.

The macroeconomic environment (supply chain

pressures,together with freight, energy and other

inputcost increases over the period) created challenges,

generating pent up demand but also impacting our

margins in the ﬁrst half of the year. In response to ongoing

inﬂationary pressures, we instigated a co-ordinated

price increase programme, with phase one substantially

completed by the ﬁnancial year end. This helped gross

margins return closer to more historic levels, although

further inﬂationary cost increases, such as energy

incurred during the latter part of the ﬁnancial year,

heldback a fullmargin recovery due to the lag between

cost increase and recovery. As part of doing business

in this environment we are continuing dialogue with our

customers to pass on relevant additional costs and the

successful outcome ofthese negotiations will remain key.

Given the various macroeconomic factors aecting the

supply chain, we invested signiﬁcantly in stock during

theperiod and whilst this has impacted cash generation,

it has guaranteed continuity of supply in a period of very

high lead times. It is pleasing to report that over this

dicult period, we have met our contractual obligations

and not let customers down as well as enabling us

to capture market share. During FY2023 we expect

stock levels to start to unwind as the macroeconomic

environment stabilises.

Engineering-led innovation

‘Innovation today for a better tomorrow’ has long been

our mantra and this has never been so important as in

this current dynamically changing marketplace. As a

society we are moving away from being wasteful towards

preservation and conservation; not only do we have a

resolute team focused on ESG, but we also have teams

ofhighly skilled engineers who collaborate with customers

to help support them on their application fastening issues

by developing innovative and cost-eective engineered

products. Our agile approach enables customers to

develop sustainable products and solutions that will

addvalue to society and the planet.

Read more on page 30

People

We place great importance on the development and

training of all our people. As part of our investment

in Atlas we have launched a comprehensive human

resources module which includes a global Employee

Assistance portal to support sta in all aspects of

wellbeing and anOnline Learning Management System

tocomplement face-to-face Development training. During

the year we expanded our talent pool in our commercial

function to drive our ambitious growth plans.

In March 2022, Scott McDaniel joined us as North America

Regional Director. He has a wealth of operational and

business leadership skills and has worked in a variety

of industries including large global industrial fastenings

companies. Scott will also sit on the Operational

Executive Board (OEB) and is responsible for driving

proﬁtable growth in North America, both organically and

acquisitively. As part of our succession planning, Glenda

Roberts (who previously held the responsibility for the

US), will continue to provide mentorship to the US team

and remain Global Projects and Marketing Director.

We have further strengthened our Group compliance

team to ensure that we continue to meet the

expectations of our stakeholders. From April 2022,

Lyndsey Case became Head of Governance and we

welcomed Christopher Morgan, an experienced FTSE

250 practitioner, to the plc team as Group Company

Secretary. To increase our strategic resilience within the

business, Maddy Webb, who has been with the business

for 21years, has become Head of Risk, while Neil Stanbury

joined us in March 2022 to assume the role of Global

Director of Quality. With our strong growth aspirations,

continual improvement initiatives, combined with the

importance of environmental, social and governance

(ESG), the enhanced team provides a stronger structured

framework of governance.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 07

Outlook

As a Group, we continue to see signiﬁcant scope to

buildthe business through a mix of organic market share

growth, as well as through strategic acquisitions. Weare

pleased with the progress we are making, albeit the

operating backdrop continues to require considerable

eort to be applied to managing rising inﬂationary costs

and supply chain disruption, as well as the ongoing roll

out of Project Atlas. I remain incredibly proud, as well as

amazed as to how the TR teams around the Group cope

with all of this on a daily basis.

A rigorous focus on service levels and responsiveness

have strengthened the Group’s position in its established

markets during this challenging period and have created

incremental opportunities with key international OEM

customers. While supply lead times are now stabilising

across most of our territories, they remain at historically

high levels at c.50+ weeks vs. c.25 weeks pre 2020 and

so we have continued to invest in inventory to support

customerdemand.

In the ﬁrst three months of the new ﬁnancial year

Group trading has been solid with c.10% growth in total

revenue (at CER). We are continuing to see an increased

number of opportunities in high growth and emerging

technologies, with good momentum in new contract

winsand our pipeline has never been so strong.

Revenue growth in the ﬁrst quarter has been

achieveddespite ongoing challenges in certain markets.

Wewelcomed the easing of the Shanghai lockdown in

June, having seen trading in our Chinese operations

signiﬁcantly aected in the ﬁrst two months of FY2023.

This is estimated to have impacted revenue by c.£1.5m,

although providing there are no further lockdowns in

China, we envisage recouping a good proportion of

this by the end of FY2023. Whilst less than 1% of Group

revenue is directly derived from Russia, the conﬂict is

having an indirect impact on some of our European

health& home customers, coupled with some volume

reductions as a result of a downturn in consumer

sentiment. Our light vehicle OEM/Tier 1 customers

continue to manage through semi-conductor chip

shortages across all regions.

We continue to be proactive in both cost management

and pricing actions to mitigate the impact of ongoing,

signiﬁcant, inﬂationary cost increases. These actions are

proving eective, albeit the lag between cost increase

and recovery has continued to be seen in margins in

theﬁrst quarter.

Given the unprecedented political and economic times

the short term outlook for the Group is proving somewhat

challenging to predict. However our Q1 performance,

together with new contract wins and the growing

pipeline, gives us conﬁdence in delivering strong revenue

growth in FY2023, despite a cautious view as to how

quickly some of our speciﬁc market headwinds described

above abate. We anticipate inﬂation in many cost areas

will remain elevated over the remainder of the year and

we will continue to take proactive steps to mitigate the

impactofthis on our margins.

The medium term is increasingly exciting and as

aBoardwe remain conﬁdent that the fundamentals

ofour business model and strategy position us well

tobecome a larger, more proﬁtable company. Over the

coming ﬁnancial year we will continue to make steady

progress through a mix of customer service, technical

innovation, investment and capturing key opportunities

beingpresented.

We look forward to updating you on our journey over the

coming months and as always thank you for the interest

you have shown in our business.

Mark Belton

Chief Executive Ocer

Strategic report

08 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case –

key reasons to invest

Trifast has one clear aspiration – to become a

much bigger, more proﬁtable company than

the one we are today

A global leader

inattractive

markets

Ambitious

growth

strategy

TR is a key global brand

inahighly fragmented market.

Ourestablished global customer

relationships and access to high

growth/emerging markets support

strong organic and acquisitive

growth for the medium term

Pages 16 to 25 Pages 26 to 37

Targeted investment in organic growth

opportunities facilitates ongoing market

share gains and enhanced proﬁtability.

Accelerated acquisition journey

focused on North America further

enhances growth via improved

access to the world’s largest

fasteningsmarket

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 09

Robust

balance sheet

and focus on

capital allocation

Focus on

sustainability

A strong balance sheet, ﬂexible

banking facilities and a structured

capital allocation framework

provide the capability and

conﬁdence to invest for enhanced

long-term returns

Pages 38 to 41 Pages 42 to 51

Trifast is committed to securing a

sustainable future. Our sustainability

strategy will help us play our part in

shaping a sustainable economy, using

our technical expertise to drive

innovation that adds value to

society and our planet

Strategic report

10 Trifast plcAnnual Report for the year ended 31 March 2022

Driving growth through

our business model

Our distinctive mix of engineering expertise, high-quality

manufacturing, and adaptable, reliable global logistics

support delivery of our purpose

Our competitive strengths How we do it

A leading global brand

TR is a recognised and established global brand across a wide range

of manufacturing sectors

We are a

24/7‘full service

provider’ oering

‘end-to-end’

support to all

ourcustomers

Our in-depth understanding

of customer needs through

our dedicated account

management teams allows

us to better serve them,

leveraging our global

scaleona local basis

We continuously strive to

develop relationships with

new global OEM/Tier 1’s,

identifying opportunities

forfuture routes to supply

Technical know-how and design-led engineering capabilities

Our engineering teams get involved from the start of the enquiry and

design process, collaborating with our global OEM/Tier 1 customers

to make the right fastener design decisions before full scale

production begins and throughout the supply cycle

Global logistics

We have established secure and proven logistic networks across the

world, oering seamless and reliable supply to c.75 countries. From

complex Vendor Managed Inventory (VMI) and ‘Just-in-Time’ delivery

to local third-party warehousing and straightforward ex-works

solutions, we are able to provide the most cost-eective supply

logistics to suit our customers’ needs

High-quality, multi-locational manufacturing

Our seven manufacturing plants are spread across Asia, Europe and

the UK, enabling us to oer our customers enhanced engineering

capabilities and greater ﬂexibility of supply and pricing

Network of trusted global suppliers

Established and proven relationships across the world ensure

TrustedReliability and ﬂexibility, all the more important in the

current challenging supply chain macroenvironment

Strong investment record

Investment into our manufacturing capabilities and our high growth

distribution sites is targeted to best support our global OEM/Tier1

customers and underpin growth. Whilst our digital evolution, via

Project Atlas, has been speciﬁcally designed to support a more

integrated and global approach to market

Underpinned by our values and culture

Read more on page 03

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 11

Design

Assemblies cannot function without

fastenings. Our custom-engineered

components support the freedom and

versatility of design necessary to allow our

customers to create world-class products

In addition, we provide invaluable input

when engaged early in the design phase.

Our engineers’ design expertise helps solve

customer application problems within an

assembly, providing cost eciencies as

wellas enhancing performance

Produce

Our global manufacturing plants provide

reliable, timely and high-quality product

to our key customers around the world.

The parts we choose to manufacture

in-house tend to require more complex

manufacturing processes and/or stricter

quality requirements. This allows us to

make best use of our extensive engineering

know-how to drive the greatest value add

for our customers

Procure

Two-thirds of the Group’s revenue is

sourced from our established global

network of world-class external suppliers.

This means we are not restricted by

geography or in-house facilities. By being

a ‘one-stop’ solution for all customers’

components we are able to streamline

andtailor the procurement process to

meetourcustomers’ needs

Deliver

Our established, secure and proven logistic

networks across the world oer seamless,

reliable and cost-eective supply regardless

of customer location – being where our

customers need us to be is central to

ourTrusted Reliability

Creating value

For our customers

c.15 billion parts reliably

supplied across the world

£31.7m invested in stock,

tomitigate ﬂuctuating

demandlevels

For our people

Remote and hybrid working

appropriately supported across

the globe

Launch of global LifeWorks

system – oering support 24/7,

365 days a year

For our suppliers

No credit terms extended,

tosupport sustainable supply

Enhanced communication, for

improved capacity scheduling

For our shareholders

Return to interim and ﬁnal

dividend – 2.10p and 3.9x cover

TSR + 11.6% ten year CAGR

For our communities

£2.8m of direct taxes paid

Community projects supported

in c.5 countries

Strategic report

12 Trifast plcAnnual Report for the year ended 31 March 2022

Revenue growth vs GDP

(%)

Underlying operating

margin (%)

Underlying ROCE (%)

Group revenue in

North America (%)

Atlas implementation

(% of employees)

Medium-term target

In excess of GDP – FY2022 4% 10-13% 10-15% >25% 100% of employees

Key metric

Deﬁnition

Group organic revenue growth is

calculated as Group sales less acquisitions

in the current ﬁnancial year, against the

prior year at actual exchange rate

Global GDP growth has been

independently calculated based on

timeframe (ref: Oxford Economics)

Underlying operating proﬁt as a

percentage of sales

Underlying operating proﬁt as

a percentage of average capital

employed (net assets + gross debt)

Revenue generated by our North

American region as a percentage of

Group revenue

The number of employees that we

have rolled out to cumulatively, as a

percentage of the number of planned

Atlas employee implementations

Why we measure it

Our ambitious growth strategy

makes revenue growth in excess of

prevailing macroeconomic conditions

an important barometer of the

Group’ssuccess

Our medium-term aspiration is to

become both a bigger and more

proﬁtable company, making margin

improvement a key measure of our

success. Underlying operating margin

enhancement is expected to come

from operational leverage gains,

grossmargin improvements and

operational eciencies

ROCE looks beyond proﬁt to measure

how eciently we are able to generate

a return to our investors. Enhancing this

metric continues to be a key focus for

the Group. Our strategic priorities and

capital allocation criteria have been

speciﬁcally set to support this

North America is the biggest fastenings

market in the world, and yet it forms

less than 10% of the Group’s revenue. A

truly global fastenings business needs a

North American region of credible scale

and reach. Our medium-term target

has been speciﬁcally set to redress that

imbalance

Project Atlas is considered an

essential part of our ongoing growth

plans, both organic and acquisitive.

Themedium-term beneﬁts case

supporting this investment has an

ROIof >25% expected at the point

of fullrealisation. These beneﬁts will

only be fully possible once we have

completed our implementation journey

Our progress in FY2022

The Group delivered 13.6% organic

revenue growth, 960bps higher than

global GDP in FY2022, reﬂecting a

very strong recovery from Covid-19

tradinglevels

We have seen recovery in underlying

operating margins in FY2022 of 30bps,

reﬂecting higher trading levels, oset

by a slower recovery in gross margins

due to inﬂationary pressures and a

post-pandemic normalisation of our

underlying cost base

Our ROCE increased by 150bps

inFY2022. This reﬂects increased

proﬁtability, against a higher employed

capital, in part due to the inventory

investments the Group has made to

counter supply chain challenges

Our revenue growth in North America

has been extremely strong at 82.0%.

Ofthis, 31.5% represents organic

growth from our existing distribution

business in Houston and 50.5% comes

from the successful acquisition of

TRFalcon in August 2021

FY2022 has seen two further successful

implementations at our sites in Holland

and Spain in June 2021 and phase

one of the three-phase roll-out to

our biggest trading subsidiary, TR

Fastenings (UK). Phase two and phase

three is now on track to complete by

the end of calendar year 2022

Link to strategy

Key to strategy

1 Investment for organic growth

2 Project Atlas

3 Engineering led innovation

4 Accelerated acquisition journey

Key strategic indicators

Our medium-term targets

Our ambitious growth strategy is focused on achieving our medium-term

aspiration to become a much bigger, more proﬁtable company than the

one we are today. Our key strategic indicators (KSIs) have been designed

to allow us to eectively monitor our progress on that journey

2022 13.6% 2022 6.7%

2020

2021 6.4%

(4. 2)%

2020 7.9%

1 12 2

3 34

(6.0)%

1. Our KPIs/KSIs include a number of Alternative Performance Measures (APMs) to provide further information on the Group’s ﬁnancial

performance and position. Where we refer to ‘underlying’ this is deﬁned as being before separately disclosed items (see note 2).

Forfurther details on the APMs, see note 32

Indicator (AER)

2021

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 13

Revenue growth vs GDP

(%)

Underlying operating

margin (%)

Underlying ROCE (%)

Group revenue in

North America (%)

Atlas implementation

(% of employees)

Medium-term target

In excess of GDP – FY2022 4% 10-13% 10-15% >25% 100% of employees

Key metric

Deﬁnition

Group organic revenue growth is

calculated as Group sales less acquisitions

in the current ﬁnancial year, against the

prior year at actual exchange rate

Global GDP growth has been

independently calculated based on

timeframe (ref: Oxford Economics)

Underlying operating proﬁt as a

percentage of sales

Underlying operating proﬁt as

a percentage of average capital

employed (net assets + gross debt)

Revenue generated by our North

American region as a percentage of

Group revenue

The number of employees that we

have rolled out to cumulatively, as a

percentage of the number of planned

Atlas employee implementations

Why we measure it

Our ambitious growth strategy

makes revenue growth in excess of

prevailing macroeconomic conditions

an important barometer of the

Group’ssuccess

Our medium-term aspiration is to

become both a bigger and more

proﬁtable company, making margin

improvement a key measure of our

success. Underlying operating margin

enhancement is expected to come

from operational leverage gains,

grossmargin improvements and

operational eciencies

ROCE looks beyond proﬁt to measure

how eciently we are able to generate

a return to our investors. Enhancing this

metric continues to be a key focus for

the Group. Our strategic priorities and

capital allocation criteria have been

speciﬁcally set to support this

North America is the biggest fastenings

market in the world, and yet it forms

less than 10% of the Group’s revenue. A

truly global fastenings business needs a

North American region of credible scale

and reach. Our medium-term target

has been speciﬁcally set to redress that

imbalance

Project Atlas is considered an

essential part of our ongoing growth

plans, both organic and acquisitive.

Themedium-term beneﬁts case

supporting this investment has an

ROIof >25% expected at the point

of fullrealisation. These beneﬁts will

only be fully possible once we have

completed our implementation journey

Our progress in FY2022

The Group delivered 13.6% organic

revenue growth, 960bps higher than

global GDP in FY2022, reﬂecting a

very strong recovery from Covid-19

tradinglevels

We have seen recovery in underlying

operating margins in FY2022 of 30bps,

reﬂecting higher trading levels, oset

by a slower recovery in gross margins

due to inﬂationary pressures and a

post-pandemic normalisation of our

underlying cost base

Our ROCE increased by 150bps

inFY2022. This reﬂects increased

proﬁtability, against a higher employed

capital, in part due to the inventory

investments the Group has made to

counter supply chain challenges

Our revenue growth in North America

has been extremely strong at 82.0%.

Ofthis, 31.5% represents organic

growth from our existing distribution

business in Houston and 50.5% comes

from the successful acquisition of

TRFalcon in August 2021

FY2022 has seen two further successful

implementations at our sites in Holland

and Spain in June 2021 and phase

one of the three-phase roll-out to

our biggest trading subsidiary, TR

Fastenings (UK). Phase two and phase

three is now on track to complete by

the end of calendar year 2022

Link to strategy

Key to strategy

1 Investment for organic growth

2 Project Atlas

3 Engineering led innovation

4 Accelerated acquisition journey

2022 8.3% 2022 8.0%

2022 12.6%

2021 6.8% 2021 5.1% 2021 1.6%

2020 8.8% 2020 5.4% 2020 nil

1 12 2

34 4

Organic



Acquisitive

2. Based on original scoping

Strategic report

14 Trifast plcAnnual Report for the year ended 31 March 2022

Financial KPIs

Key performance indicators

The Board, OEB and operational management teams

regularly monitor a range of ﬁnancial and non-ﬁnancial

key performance indicators (KPIs) to allow them to

measure performance against expected targets

Underlying cash conversion

ratio (%)

Working capital as a

percentage of revenue (%)

Underlying diluted earnings

per share (EPS)

Deﬁnition

Underlying cash generated from

operations as a percentage of

underlying EBITDA

Deﬁnition

Current assets excluding cash,

lesscurrent liabilities excluding

debtlike items

Deﬁnition

Underlying proﬁt after tax divided

by the weighted average number of

diluted ordinary shares outstanding

during the year

Why we measure it

Our quality of earnings is reﬂected

in our ability to consistently turn

underlying EBITDA into cash,

allowing us to maintain a sustainable

return of cash back into the business

to fund our ongoing growth journey

Why we measure it

An ecient allocation of capital on the

balance sheet drives improved quality

of earnings and reduces the additional

investment needed to support organic

growth. Working capital eciency

remains an ongoing focus, which we

expect to be further assisted by the

continued roll-out of Project Atlas

Why we measure it

EPS is a key metric for the Group and

our wider stakeholders. Our strategy

for growth is therefore focused on

increasing this ratio year-on-year

Our progress in FY2022

The current high levels of

macroeconomic uncertainty and

supply chain challenge necessitated a

much higher than normal investment

in stock, of £31.7m, in FY2022.

This has led to an overall negative

conversion of underlying EBITDA

into cash. We consider this to be a

temporary position and expect to

revert to more normalised levels

oncethe macroenvironment settles

Our progress in FY2022

The current high levels of

macroeconomic uncertainty and

supply chain challenge necessitated a

much higher than normal investment

in stock, of £31.7m, in FY2022. This

has increased our working capital as

a percentage of revenue to 46.5%

(FY2021: 34.1%). We consider this to

be a temporary position and expect

to revert to more normalised levels

once the macroenvironment settles

Our progress in FY2022

Our EPS has increased by 30.3% in

FY2022 due to the increase in proﬁts

against a reasonably static number of

shares in issue

Link to strategy

1 2

Link to strategy

1 2

(66.8)% 2022

2022

46.5% 2022 8.13p

2021 147.9% 2021 34.1% 2021 6.24p

2020 105.1% 2020 37.7% 2020 8.64p

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 15

Non-ﬁnancial KPIs

Employee engagement

index

EcoVadis rating

Deﬁnition

The overall rating that our

employees have scored the Group

(out of ten) in our latest Group-wide

‘Happiness Index’ survey

Deﬁnition

An independently generated rating

intended to assess the Company’s

sustainability management system

Why we measure it

It is important that we are aware

ofhow our employees are feeling on

a number of topics, so we can take

any necessary actions to ensure we

continue to appropriately support

our people

Why we measure it

The Group is committed to

maintaining high standards

ofenvironmental management,

social practices and corporate

governance in our business and

supply chain. Our stakeholders need

to understand the wider impact we

have on the environment and

socio-economically

Our progress in FY2022

The latest survey was run in

November 2021. Results are made

available to all Trifast employees

and have been formally reported

atBoard and OEB level. Our overall

score of 7.5 is considered good,

however actions plans are in place

to ensure we react to speciﬁc

ﬁndings as appropriate

Our progress in FY2022

The Group established its new

sustainability strategy, including a

clear vision, targets and objectives,

in September 2021 and published

its ﬁrst standalone Sustainability

Report in November 2021

Link to strategy

2022 7.5 2022 Silver

2021 7.4 2021 Silver

20202020 ——

Key to strategy

1 Investment for organic growth

2 Project Atlas

3 Engineering-led innovation

4 Accelerated acquisition journey

Organic

Acquisitive

Find out more in the

sustainability section

on pages 42 to 51

1. Our KPIs/KSIs include a number of

Alternative Performance Measures

(APMs) to provide further information

on the Group’s ﬁnancial performance

and position. Where we refer to

‘underlying’ this is deﬁned as being

before separately disclosed items

(see note 2). For further details on

theAPMs, see note 32

Strategic report

16 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

16 Trifast plcAnnual Report for the year ended 31 March 2022

TR is a key global brand in

ahighly fragmented market.

Our established global customer

relationships and access to

high growth/emerging markets

support strong organic and

acquisitive growth for the future

Investment case

global locations

C.75

countries supplied

A global leader

in attractive

markets

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

A global leader

inattractive

markets

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 17

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 17

Where we operate

North America

Trifast plc & Group

Services head oce – Uckﬁeld

TR Fastenings

Precision Technology Supplies Ltd

Lancaster Fastener Company Ltd

TR Fastenings Inc

TR Falcon Fastening Solutions

Europe

Germany

Holland

Hungary

Ireland

Italy

Norway

Poland

Spain

Sweden

Asia

TR Asia headquarters – Singapore

China

India

Thailand

Malaysia

Philippines

Taiwan

Key:

Head oce Trifast plc

TR Asia headquarters

Manufacturing & distribution sites

Distribution sites

Technical & innovation centres

Strategic report

18 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Global leader operating

in attractive markets

Fast-paced markets driven by environmental and

technological change create new opportunities

acrosssectors, products and geographies

What sets Trifast apart

Trifast is one of only a handful of global fastenings

suppliers, setting us apart from the many national and

regional players that operate in our market. This puts us

ina prime position to support our multinational and global

customers as they continue to look to rationalise their

supplier base.

Our core focus is on the supply of more complex,

engineered components complemented by the

highest levels of customer-centric commitment.

Inthisnon-commoditised part of the market, competitive

pressures are lower and margins higher, as customers

prioritise quality, reliability and engineering support over

the lowest possible price. Our combined manufacturing

and distribution presence provides a USP against a

competitor base that predominantly focuses on one or

the other. This allows us to oer our customers enhanced

engineering capabilities with a greater ﬂexibility of supply

and pricing.

A balanced sector portfolio and wide geographical spread

provide appropriate protection from some of the more

cyclical markets in which we operate. The long-standing

relationships we hold with our global and multinational

customers are a key part of our ongoing successful

growth journey. Moreover, with no one customer

representing more than 7.5% of the Group’s turnover,

ourcustomer concentration risk remains low.

Revenue by region – FY2022

<7.5%

sales to any

singlecustomer

30:70

manufacturing to

distribution ratio

C.£60bn

market size, with no

one player holding >5%

>75%

of our revenues are

customer-speciﬁc

branded products

18 years

average tenure of our

top ten customers

Revenue by sector – FY2022

2022

19%

25%

22%

17%

13%

Light vehicle

Heavy vehicle

Health &home

ET&I

General industrial

Distributors

Europe

North America

Asia

£56.1m

£83.9m

£18.4m

£83.9m

2022

19%

25%

22%

17%

13%

Light vehicle

Heavy vehicle

Health &home

ET&I

General industrial

Distributors

Europe

North America

Asia

£56.1m

£83.9m

£18.4m

£83.9m

2022

1. Revenue by regions includes

internalsales

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

A global leader

inattractive

markets

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 19

Change brings opportunity

Perhaps this last year, more than any other, has shown

us that ‘change is the only constant’. We have seen

strong market demand, but also supply chains extended,

legislation tightened, costs inﬂated and speciﬁc product

dependencies come to light.

This dynamic and growing environment has revealed

the strength of our teams and the resilience of our own

manufacturing locations, together with our partner

suppliers, allowing these communities to meet the

demands of our growing customer base.

With a laser-focused customer-centric workforce, we have

managed signiﬁcant lead time increases in supply chains

by investing in our global inventory. Where appropriate,

this investment has been further complemented by our

engineering expertise, using our bespoke parts database,

allowing components to be replaced with alternatives that

meet design and quality criteria, thereby our customers

maintain production in the face of heightened product

availability challenges.

Self service in a digital world has been augmented by

the increased content in our newly launched website.

This encompasses c.6,500 pages of product information

including technical data and installation animations.

The enhanced technical and engineering data within

our knowledge base is designed to support engineers,

speciﬁers and programme managers, with over 5 million

page views in 2021. As working from home increases, we

will continue to invest in our web and digital capabilities

to build upon the momentum we have seen and serve the

evolving shift in working patterns.

We began to pivot our focus over the last two years

tomarket sectors where disruption through technology,

legislation, or both, drives the opportunity to expand our

product oering and value-add proposition. This was

achieved by deploying team members based around the

globe in an agile manner. We continue to invest in these

global multi-disciplined teams to allow us to carry on

creating the most value for our customers.

Compliance with newly issued legislation or preparing

to be compliant with anticipated changes to legislation,

has required customers and prospective customers

alike to accelerate design cycles beyond what was

onceconsidered normal.

When combining this pace of design change with a

declining knowledge of fastener engineering among

customers and with new product needs such as electricity

conduction for electric vehicles, our class-leading levels of

knowledge, partnership and value creation add signiﬁcant

value to our customers.

Start-up disruptor businesses in particular have a need

to be guided through fastener design and, like many of

our customers, often the ﬁrst place their engineers visit

is our website. Aiding their new designs, they can seek

technical data, downloading TR drawings, CAD ﬁles and

product animations that prove the functionality within

their applications. One positive consequence of this digital

proliferation is we have started to see TR part references

appear across global OEM platforms, driving enquiries

from brand new sources needing to use our product.

The genesis of many of these start-up companies has

been the opportunity to penetrate markets that are going

through extreme change and there is no better example

of this than the electriﬁcation of vehicles (EV), whether

they be light vehicles or heavy vehicles, all driven by

ever-increasing sustainability goals.

We see technology and legislation come together

with environmental and social wellbeing concerns

creating needs and opportunities, in turn opening

upthe competitive landscape to new entrants. In one

instance we have helped develop a bill of materials for

amicro-turbine business that installs small wind turbines

powering remote 5G base stations, and in another

instance we helped develop small screws that hold

together ground-breaking mobile test kits for viruses.

Both of these examples were also underpinned by a

customer need for pace, agility and technical know-how.

You will see (pages 20 to 25) how the thread of ESG

change intertwines across all our market sectors

and often provides the platform to underline our

valueproposition.

With electriﬁcation generating around twice the

opportunity for TR than that of a combustion engine in

our light vehicle and heavy vehicle market sectors, there

are possibilities abound for our engineering teams to help

design-in components that support a greener planet. Ina

similar vein, the Right to Repair Regulations promotes

the need of using fastener content to help diminish the

throwaway culture that exists across many products in

ourhealth & home market sector.

Of course, alongside value creation and

customer-centricity there has been the need to address

inﬂationary costs throughout the supply chain. It is

testament to the high level of customer service delivered

by our colleagues around the world, that our price

increase discussions have been supported by us providing

an undisrupted supply. With careful preparation and a

fact-based approach, customers have been engaged to

ensure that price increases are presented and processed

with the same degree of professionalism as any other

component of our customer relationship.

Strategic report

20 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Meeting the future

Opportunities for growth continue to come

throughdynamic changes across market segments and

geographies. We place a speciﬁc focus on market sectors

and customers that are impacted and/or involved in

disruptive technologies and legislative change.

It is these customers that often place the greatest

value on TR’s oering as we are able to operate as ﬁrst

responders to customers’ needs throughout the cycles

ofdevelopment.

CHANGE = OPPORTUNITY

ESG initiatives

What’s in the sector

Power distribution, power generation, tech equipment and 5G infrastructure systems

Energy, tech & infrastructure

Market developments

Perhaps more than any other sector we see the disruptive

nature of technology shifts coming to bear in ET&I.

The Internet of Things , 5G, working from home,

urbanisation and the general connected nature of society

drive investment and growth in infrastructures and

products that unite all of these inﬂuences.

Power distribution, electronics, data centres, antennae,

sub-marine cabling for oceanic data & power transfer and

much more have all played their part in a frenetic year of

activity for this sector and a strong pipeline for TR in the

years ahead.

Changes in society drive consumer demands, along with

governments committing to post-Covid-19 infrastructure

programmes leading to high-value investments.

Ourcustomers have turned to TR to support with agility,

engineering know-how and logistical nimbleness.

Our manufacturing capabilities have underpinned our

value-add proposition, meeting the needs of this varied

customer base regardless of geography.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Global market share opportunities

Engineering-led discussions

ESG sensitive

Intercompany manufacturing capacity

New range expansion tackling new legislation or new tech

Dedicated global sales and engineering structure

Regional full-service provider (FSP)

New product range development

Programme management through seamless

phasing new parts into new programmes

Engineering solutions with in-depth training oer

Near-shoring or onshoring opportunities

Key reasons we focus on this sector

Global internet trac 7.7 exabytes per day in 2021, up from

2.4 in 2016 (ref. Cisco)

Worldwide 5G roll-out in process, with 6G in the

medium term view

Global mobile data trac estimated to grow 55% annually,

2020-2030 (ref. Researchgate)

By 2025 – 5G infrastructure expected every 200m in many

major cities (ref. The road to 5G, McKinsey)

Urbanisation trends relating to deployment

ofsupportinginfrastructure

Global weather trends tied to need of

heating/cooling/quality of air

Expected legislation disruption

(CO

gases,energyeciency)

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

A global leader

inattractive

markets

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 21

What’s in the sector

Passenger vehicles, SUVs, niche builds, leisure and o-road – 2 & 4-wheelers

Light vehicle

Market developments

For some peers, the story of the year might well be

microchip availability; however, for TR, our resounding

narrative is one of new product ranges and new customers

as the EV market continues to accelerate.

As ESG rules surrounding exhaust and noise emissions

tighten, so too do the time frames for deployment of

new technologies. The pace, agility and creative thinking

required is epitomised by our sales and engineering teams

around the world.

Even as we meet customer technical demands, whether

that be through our own manufacturing locations or via our

supply chain partners, the pressure to onshore with supply

chain transparency has increased and will continueto do so.

Start-up EV ﬁrms have become disruptive, sometimes

funded or owned by big-tech ﬁrms or lesser-known

philanthropists. With a less developed internal knowledge

of fastener design, TR’s expertise is proving invaluable to

these businesses.

The addressable fastener content within new tech

EVvehicles is around twice that typically available to

TR on an internal combustion engine (ICE) car platform

– aswe introduce everything from high performance

plastic components (through our specialist plastics

team) tocompression limiters, screws for plastic

andbatteryﬁxings.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Engineering-led discussions

ESG sensitive

Global platforms serviced locally

Intercompany manufacturing capacity

Sweet-spot new range expansion

Legislative change provides new opportunities

Dedicated global sales and engineering structure

New product range development

Engineering solutions with in-depth training oer

Rapid prototyping with intercompany manufacturing

Part and supplier rationalisation

Near-shoring or onshoring opportunities

Key reasons we focus on this sector

7.4% revenue growth in FY2022 (LMC: (1.5)%)

US government commit to invest $5 billion to build

anationalEV charging network

5.9% ﬁve-year CAGR forecast in light vehicles sales

(ref:LMC)

Government ban on sale of ICE cars – UK (2030),

EU(2035) and China (2035)

CHANGE = OPPORTUNITY

ESG initiatives

Strategic report

22 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Meeting the future continued

What’s in the sector

Medical, health and domestic appliance industry

Health & home

Market developments

Our personal wellbeing has ﬁnally reached the top of the

list for many governments, institutions and employers

alike. While wellbeing is a deliberately broad term, from

psychological to physiological and all that is in between,

the change to society has brought into sharp focus the

tools needed to promote better personal outcomes.

Our health & home market sector captures many of

those tools that are of a physical construct – from rowing

machines and electric bikes, to washing machines, coee

makers and hair dryers – they have all seen a recovery to or

resurgence past pre-Covid-19 pandemic volumes.

The demand for these products intertwines with new

technology deployment allowing connectivity (through

Wi-Fi or 5G) to meet with longevity (improved battery

performance, or Right to Repair Regulations).

This market sector, alongside the electronics segment

inside energy, tech & infrastructure (ET&I), has the fastest

cycle period between product launches. As consumer

and compliance demands continue, our customers pivot

fast to change design and to ﬂex around the world, so we

anticipate a growing need for the many services we oer.

Customer factories are starting to move continents inorder

to meet legislative needs for regional manufacturing and

satisfy the consumer impatience onlong delivery times.

TR is well placed to support this type of change and has

done so on several occasions in this past year, winning

market share in the process. We anticipate that this activity

will continue to increase in the coming years.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Engineering-led discussions

Global platforms serviced locally

Sweet-spot new range expansion

Intercompany manufacturing capacity

Legislative changes provide new entry points

(Right to Repair Regulations)

Dedicated global sales and engineering structure

New product range development

Engineering solutions with in-depth training oer

VMI & FSP options by location

Part and supplier rationalisation

Near-shoring or onshoring opportunities

Key reasons we focus on this sector

Strong forecast growth in underlying markets

9.8% CAGR forecast in global household appliances market,

2022-25 (ref. Statista)

7.2% CAGR forecast in the global health and ﬁtness club

market, 2021-26 (ref. Research and Markets)

Government commitments to health and wellbeing, e.g.

£12 billion p.a. health and social care investment in the UK,

via The Health and Social Care Levy

$127.0 billion domestic appliances global value add

forecasted in FY2023 (ref. Oxford Economics)

CHANGE = OPPORTUNITY

ESG initiatives

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

A global leader

inattractive

markets

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 23

CHANGE = OPPORTUNITY

ESG initiatives

What’s in the sector

Generalised industries not speciﬁc to any one end-market, from sheet metal sub-contractors to machinery buildersandplastic

moulding companies

General industrial

Market developments

While regional needs vary from geography to geography,

the fundamentals of this broad group of companies

remains the same – industrial expertise, locally executed,

requiring deeper inventory from its supply chain across a

wider range of products.

This basket of business types has seen a strong

resurgence above pre-pandemic levels.

Supply chain challenges and the risk of non-supply

has been one of the core reasons for our growth in

FY2022 – deploying the supply chain know-how and

product knowledge of our sales and engineering teams

to make parts available to this customer base when our

competitors could not.

The share of wallet enhancement through market

circumstances has led to permanent retention of

customers and parts, as our global operational team

continue to deliver outstanding service.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Global market share opportunities

Engineering-led discussions

Intercompany manufacturing capacity

Legislative change provides new opportunities

Nimble supply chain addressing low to

medium volume components

Dedicated global sales and engineering structure

Regional full-service provider (FSP)

New product range development

Supplier and part rationalisation, access to

deep inventory holding for standard items

Rapid prototyping using intercompany manufacturing

ESG committee, structure and policies

support customers without this in place

Key reasons we focus on this sector

3.2% CAGR growth forecast for global industrial

production, FY2022-FY2027 (ref. Oxford Economics)

Legislation changes for businesses

requiringtransparencyof supply chain favour TR over

smaller competitors

Strategic report

24 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Meeting the future continued

CHANGE = OPPORTUNITY

ESG initiatives

What’s in the sector

Vehicles and products associated with the bulk movement of people, goods and services

Heavy vehicle

Market developments

Whether a vehicle is light or heavy, it cannot avoid

the progress of change. Burdened with a reputation

for environmental pollution (noise, air quality or road

damage) the heavy truck and van industries are focused

on ‘cleaning up their act’, and this change heralds rapid

design changes that would have previously occurred over

a decade or more.

Front and centre of this sector transformation is

electriﬁcation, for both the last mile delivery and the

long-haul journey. This has been accompanied with stricter

controls on country of origin and a demand for products to

be made in the region in which they are used.

Electriﬁcation and tech deployment does not stop at

trucks and vans but continues into the yellow goods

market, locomotive, material handling equipment and

allthese associated tiers.

Start-ups are not the preserve of the light vehicle sector

either, with several high-proﬁle companies aiming to

disrupt what has been the preserve of traditional market

leaders. Where they lack volume and leverage, they

seek speedy support and know-how from TR to bring

commonly used items across our database of parts to

improve pace to market and lower total costs.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Global market share opportunities

Engineering-led discussions

ESG sensitive

Sweet-spot new range expansion

Dedicated global sales and engineering structure

New product range development

Regional full-service provider (FSP)

Engineering solutions with in-depth training oer

VMI & FSP options by location

Part and supplier rationalisation

Near-shoring or onshoring opportunities

Key reasons we focus on this sector

Legislative change for emissions and sound

externalstatson disruption to the markets

Last mile delivery increases through spending

patternchange

Consumer demand/mass urbanisation drives people

andproduct movement

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

A global leader

inattractive

markets

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 25

What’s in the sector

Distributor customers in key geographies providing an outlet for TR branded product and associated fasteners

Distributors

Market developments

Our distribution customers remain an invaluable

cornerstone of the broad oering TR brings to

the market.

This carefully selected community of companies

reaches geographies or territories that we cannot,

representing the TR brand with a sense of purpose

andprofessionalism.

The agility provided through real-time discussions in

local languages has meant that we have seen a signiﬁcant

uplift in our success in this past year.

While this sector is often considered the barometer

or early indicator of general market movements, our

increased product ranges and broadened distributor

customer base gives us the conﬁdence in long-term

proﬁtable growth and a continued dierentiation from

ourpeer group.

Market sector matches to TR’s strategic

value proposition

We create customer

value through

Sweet-spot new range expansion

Legislative change provides new opportunities

Intercompany production of TR branded products

Leveraged strength of product teams SMEs

Online oering of design and tech support

Sales training, marketing strength

ESG committee, structure and policies

support customers without this in place

Key reasons we focus on this sector

3.0% CAGR growth forecast for global GDP, FY2022-

FY2027 (ref. Oxford Economics)

Ongoing supply chain disruption expected to sustain

increased levels of unforecast/inﬁll demand

Geographic and range extensions provide opportunities for

further market share gains

Transfer of our EU distributor business from the UK to

Germany provides additional scope to service customers

CHANGE = OPPORTUNITY

ESG initiatives

Ambitious

growth

strategy

Targeted investment in organic

growth opportunities facilitates

ongoing market share gains and

enhanced proﬁtability. Accelerated

acquisition journey focused on North

America further enhances growth

viaimproved access to the world’s

largest fastenings market

Strategic report

26 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

26 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Our four strategic pillars

Creating

stakeholder

value

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 27

Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 27

Strategic report

Pages 28 and 29

Pages 34 to 37

Pages 30 and 31

Pages 32 and 33

Background

We continue to see focused investment as a core

partof our ongoing organic growth, not just via capital

expenditure in our warehousing and manufacturing

capabilities, but also investing in our people.

Progress in the year

Over the last year we continued to invest in our

manufacturing capabilities with a speciﬁc focus on

building on-shore European capacity at our Italian

operations. A signiﬁcant €4.0m capital expenditure plan

was authorised by the Board in October 2021 and work is

already well underway that will increase capacity at this

Italian site by 30% (see case study on page 29).

Following on from the successful recruitment of our

Global Supply Chain Director in June 2020, we have

continued to invest in the wider supply chain team,

with speciﬁc recruitment to support our expertise in

regional sourcing for the Americas, India and Eastern

Europe. Akey focus of this team will be to work closely

and develop our trusted supplier base, ensuring that we

make the best use of our global purchasing power and

enhanced forecasting capabilities, rationalising supply

and driving input cost eciencies.

Further investment into our warehousing facilities has

also been approved to support two of our fast-growing

distribution sites – PTS, our UK-based specialist stainless

steel distributor, and TR Hungary, an energy, tech &

infrastructure focused distribution site. Over the last

ﬁve years, CAGR (normalised to exclude FY2021, due to

Covid-19) for Hungary has been 14% and PTS three year

CAGR has been 23% (acquired April 2018).

During the year we expanded our talent pool in our

commercial function, recruiting over 25 people within

sales, engineering and supply chain logistics to drive our

ambitious growth plans. At the same time, we have also

strengthened our Group governance, risk and quality

teams to increase the Group’s strategic resilience and

provide a stronger structured framework of governance.

Future investment plans

As the business continues to grow, we plan to

makeongoing, targeted investments in our people to

appropriately support that proﬁtable growth journey

andcreate opportunities for the future.

Following on from the investment approval given in

FY2022, our Hungarian operations moved into their new

facilities in Q1 of FY2023 and the PTS move is planned for

around the beginning of FY2024. These moves will increase

their warehouse capacities by 192% and 42% respectively,

to support an ongoing growth journey for years to come.

Looking ahead, we continue to see organic investment as a

core part of our ongoing strategy for growth. By expanding

our manufacturing capabilities and capacities around the

world, we will be able to better balance our manufacturing

and distribution mix and improve the Group’s overall

margins. In addition, we will continue to invest in our

distribution businesses, focusing on those geographies

that provide the greatest ongoing organic growth

opportunities, including Thailand, the USA and Spain.

PTS, stainless steel

specialist distributor

TR Hungary, ET&I sector

focused distributor

1. Normalised to exclude FY2021, due

toCovid-19

Strategic report

28 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Investing for

organic growth

42%

additional warehouse

capacity approved

192%

additional warehouse

capacity approved

23%

three-year CAGR

14%

ﬁve-year normalised

CAGR

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Case study:

Investing in European manufacturing

Background

TR VIC is our largest manufacturing facility outside

Asia, and produces more than one billion pieces

annually from its site in Italy. Their main end markets

are the health & home sector. However, over the last

ﬁve years, we have seen accelerated light vehicle and

energy, tech & infrastructure sector growth, which

together make up c.17% of their revenue.

Coming out of the Covid-19 downturn in Q1 of FY2021,

we saw a rapid recovery and growth in the health

& home sector in Europe, with huge upswings in

consumer demand driving volumes to record levels.

Since then and throughout FY2022, demand has

continued, although some reductions, related to the

Ukraine conﬂict, and downturn in consumer sentiment

have been seen at the start of FY2023. Looking

ahead, activity will be further supplemented by new

business wins in the light vehicle and energy, tech &

infrastructure sectors.

Investment case

As a result of this higher demand, production level

requirements are forecast to increase by up to 30%

over the next few years. On top of which, ongoing

supply chain challenges, higher transport costs and

ESG considerations, are increasing our customers’

appetite for onshore manufacturing in Europe.

The Group therefore approved a signiﬁcant capacity

investment programme at our Italian site in 2021.

Thisinvestment is expected to total €4.0m and

takeaperiod of 12 months to complete.

Work is already underway, with infrastructure works

completed, and machinery now on order or already

inplace where possible.

Outcome

The investment, in conjunction with an aligned

operational eciency programme, is expected to

increase capacity by c.30% by the end of FY2023,

thereby providing support for ongoing and future

revenue growth at this key European site.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 29

The scale of this investment

changes the game for TR

manufacturing in Europe

Stefano Pisoni

MD of TR VIC

€4.0m

investment in our Italian

manufacturing facility

C.30%

increase in production

capacity (c.350 million

pieces to 1.4 billion pieces)

Strategic report

30 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Project

Atlas

Project Atlas – a transformational investment that will underpin

our ongoing organic and acquisitive growth strategy and further

integrate our global business to create the Trifast of tomorrow

Stevie Meiklem

Project Lead

Background

Project Atlas is a multi-year transformational investment

focused on the development and integration of the Group’s

IT infrastructure and underlying processes, policies and

procedures. This project is considered an essential part

ofour ongoing growth plans, both organic and acquisition.

Beneﬁts case

The medium-term beneﬁts case supporting this

investment has always been very compelling, with an

ROIof >25% expected at the point of full realisation.

We expect full beneﬁt realisation to start in the second

half of FY2024 following roll-out across the Group.

Key identiﬁed beneﬁts

Gross ﬁnancial

outcome

ROI >25%

Supporting our core strategy:

• Improved global customer activity data supports accelerated penetration into our

multinational OEM/Tier 1s

• Reduced quote times drive additional sales success

• Smarter and more automated VMI and logistics processes

Incremental sales growth

c.5%

Operational eciencies and integration:

• Greater integration and automation at enquiry level will facilitate increased in-house

manufacturing levels, more eective utilisation of available capacity and a lower

external spend

• Speciﬁc investments into warehousing technology will drive down picking errors and

manual checking procedures

Gross margin

improvements c.200bps

Reduction in gross stock

weeks held by 2-5 weeks,

based on normalised

stock weeks

Improving our management information and data management:

• Improved access to our Group-wide product and supplier data will help us further

develop and globalise our supplier networks and reduce input cost

• Improved customer demand planning capabilities and product data will drive more

eective stock ordering and holding levels

• Increased Group-wide supply information will aid combined logistics planning and

access to greater economies of scale

Building an adaptable, scalable and stable environment:

• To support successful integration of our acquisition activities

Accelerated acquisition

journey integration

1. Project Atlas is expected to increase business-as-usual costs by c.£3m due to licences, amortisation, maintenance and support costs

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 31

October 2020

Pilot site successfully

goes live

June 2019

Global processes,

policies and

procedures

established

March 2020

IT system designed,

built and tested

June 2021

Two further

implementations

End of calendar

year2022

Biggest trading

subsidiary live,

TR Fastenings (UK)

End of FY2024

All relevant entities

will be live

March 2022

Roll out of our global

talent management

system to 16

locations

Progress in the year

Following the October 2020 roll-out to our pilot site,

FY2022 has seen two further successful implementations

at our sites in Holland and Spain in June 2021. We are

pleased to report that we are already starting to see

theresulting positive impact on warehouse eciencies.

The next stage has been the phased roll-out to our

highest revenue trading subsidiary, TR Fastenings (UK).

We always expected that this, our most complex trading

business, would be the most challenging roll-out of the

project. Therefore, a phased approach was planned.

Astimetabled, phase one rolled out in November 2021,

with phases two and three running behind our original

HY1 of FY2023 scheduling, and now on track to complete

by the end of calendar year 2022. In some part, this

delay reﬂects the impact of the current operational

challenges that the wider macroenvironment is placing

onthebusiness.

Looking ahead, we anticipate that the current geopolitical

and macroeconomic conditions will continue to place a

degree of uncertainty on our roll-out timetable. However,

we do expect this to be temporary, and are working hard

to ensure that we are able to keep any further delays to

aminimum.

Because of the work undertaken to date on this

project, we have incurred direct costs of £2.6m in

FY2022 (cumulatively £14.9m), largely relating to

project team, consultancy, localised testing and

training costs. Wehaveexcluded £1.0m of these costs

from our underlying results (see note 2), to reﬂect the

unusualscaleand one-o nature of this project.

An ongoing digital evolution

As part of the TR Fastenings implementation we

will also see the ﬁrst roll-out of our new customer

engagement module. This additional c.£1.0m investment

was separately approved as part of our wider digital

roadmap, to provide enhanced customer service, enquiry

management and sourcing capabilities beyond the

original scope of Project Atlas.

We will continue to actively monitor relevant digital

investment opportunities, both in conjunction with and

beyond our ongoing roll-out of Project Atlas. Other areas

of speciﬁc focus include additional demand planning

improvements and enhanced forecasting capabilities.

Plans for the future

Over the course of FY2023, we intend to comprehensively

review the Atlas beneﬁts case, in the context of our

growing post-implementation experience. We do not

expect any changes to the overall beneﬁts arising from

this key investment, but this process will allow us to

provide further detail of how we anticipate those beneﬁts

being generated. We look forward to providing more

detail on this in due course.

Through Trifast’s extensive design and application engineering

expertise we are able to oer a value-add proposition, thatopens

doors and builds long-term customer relationships

Strategic report

32 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Case study: Agility

In the fast-paced, dynamic EV marketplace, traditional

timelines have been squeezed and the pace from

concept, to design, to launch has accelerated

signiﬁcantly. Alongside this, the plans of many OEMs

to electrify part or all of their product oering creates

a vast amount of engineering output, cost modelling,

quoting, prototyping and project management.

Two core reasons sit at the heart of this shift – the ﬁrst

is driven through legislative overhauls and ambitious

timelines, often through political commitments or

recommitments to the environment. The second reason

is that disruptive entrants to the light vehicle market,

and now latterly the heavy vehicle sector, move with

a pace and agility not encumbered by the structures

of traditional large OEMs. This competitive advantage

creates a counter-reaction from those OEMs whereby

their own expectations of timing are pulled forward.

To accommodate this shift in pace and surging

demand for new EV products to replace ICE

platforms, one speciﬁc global Tier 1 customer of TR

asked for an innovative approach to solving the time

framechallenges.

Our engineering, sales, marketing and supply chain

teams came together to provide a solution that we will

also deploy to other customers and sectors, such has

been its success.

To cut down the design and quote time frame for

our customer we built a digital catalogue in order to

allow them to choose with ease qualiﬁed, accredited

production parts with guide pricing that could

underpin budgetary quotes to their OEMs. This tool

is now available online and in their intracompany

resources, complemented by physical samples sets

that we have put in the hands of our customer’s sales

and engineering teams around the world.

As a result, the customer’s conversion rate of securing

new business has increased through often being ﬁrst in

their quote cycle with approved samples available from

the outset. The lead times for meeting pre-production

builds also reduce with this approach, something that

is highly valued in today’s environment of extended

lead times and supply chain bottlenecks.

This approach by our TR teams has led to excellent

customer satisfaction and recognition, with new

business awards being the visible reward and the less

tangible, but just as impactful, outcome being an agile,

can-do, team-oriented attitude.

In the fast-paced, dynamic EV

marketplace, TR’s innovative and

agile approach puts customers

ahead of the competition

Dan Jack

Global Sales and Commercial Director

Engineering-led

innovation

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 33

Case study: Partnership

Product innovation and product range expansion sit

at the heart of our oering to distributor customers.

We are considered part of our customers’ sales and

engineering community in the regions they serve.

In this past year the customer centricity of our inside

and outside sales teams has not only maintained the

highest possible service levels through the realities of

Brexit combined with Covid-19, but these teams have

purposefully supported these customers with new

opportunities to grow their business.

An example of this approach has been to install

new product lines at a large distributor customer

serving a speciﬁc region of Europe. Our marketing

and engineering communities provide samples, data,

product support, video content, training material and,

through the pandemic, online ‘Lunch & Learn’ sessions

which our customers’ engineering and sales teams are

able to attend virtually.

As we trained and educated this customer around

these complementary but new product ranges we

were able to measure success via enquiries, time

spenton our website, downloads of speciﬁc content

and ultimately through signiﬁcant growth in new

salesrevenue.

Partnership is a word often overused and

misunderstood but we believe that TR demonstrates

all the virtues of being a like-minded, value-driven

supplier partner. The customer in this example

has acknowledged that their own sales forecasts

and success rates have a linear relationship to our

engagement with them. These sentiments give us

greatcause to be proud.

Working in partnership

withourdistributor customers

provides the foundation for

strong mutual growth

Dan Jack

Global Sales and Commercial Director

1. Normalised to exclude FY2021, due to Covid-19

Strategic report

34 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Accelerated

acquisition journey

North America is the biggest fastenings market in the

world,and yet it forms less than 10% of the Group’s revenue.

Our appetite to acquire in the region has been speciﬁcally

setto redress that imbalance

Paul Ranson

Head of Corporate Development

20%

ﬁve-year normalised

organicCAGR

79%

of our top 100

customersactively

tradinginNorth America

8.0%

of global revenue generated in

North America (medium-term

KSI target: >25%)

Background

A truly global fastenings business needs a North

Americanregion of credible scale and reach and we have

a medium-term target to generate at least a quarter of

our revenues from North America. Our customer base

has an active presence across the USA, Canada and

Mexico and to better access this, we need to oer the

same full and ﬂexible service in North America as we do

in other parts of the world. Moreover, growing demand

for onshoring supports speciﬁc investment into our local

manufacturingcapacity.

Our proven track record of regional organic growth (CAGR

of c.20% over the last ﬁve years excluding FY2021, due

to Covid-19) demonstrates that we oer a valuable and

attractive proposition to this market.

An appetite beyond North America

Although North America is where our proactive search

is focused, as an established global fastenings brand,

we regularly engage with businesses and advisers

operating in other markets. We will always review any

credible targets that are presented to us as we believe

that non-organic growth can provide wider opportunities

tothe existing Group, with the potential to allow us to:

• Accelerate our digital evolution

• Localise in-house manufacturing capacity – supporting

customers’ growing demands for onshoring

• Balance our manufacturing to distribution ratio –

raising Group margins by increasing our proportion

ofhigher-margin manufacturing revenues

• Retain our diversiﬁcation, by osetting the strong

organic light vehicle sales momentum

Progress in the year

With dedicated internal resource, supported by specialist

external advisers and a growing network of contacts

across North America and beyond, the Group’s position

has been substantially enhanced over the course of

FY2022. This led to the successful ﬁrst step on our North

American acquisition journey with the acquisition of TR

Falcon in August 2021 (see case study on pages 36 and

37),a $11.1m revenue distributor based in North Carolina.

This remains an interesting time for Trifast’s non-organic

growth journey and we look forward to reporting on our

ongoing progress in due course.

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 35

Criteria guidelines Rationale

Business type

Manufacturing • Well established ‘Made in America’ customer appetite

• Growing onshoring demand – due to supply chain challenges and ESG considerations

• Provides strong support for our ongoing organic growth journey

Distribution • Better supports existing and new customers with a strong regional presence

• Widens our onshore product oering

Size – ‘sweet spot’ (medium term)

Revenues – >£10m to £100m

EBIT margins – >10%

Cash generative

• Likely to service a number of larger contract customers

• Expected to have a certain level of process maturity

• Relatively easy to integrate/absorb into the wider Group

• Earnings enhancing with a positive Return on capital employed

• Optimised process time investment to £ beneﬁt ratio

Proﬁtable growth potential

Forecast organic growth • Post-acquisition organic growth

• Operational leverage gains

• Dynamic working environment/mindset

Strong post-acquisition

strategy

• Higher value creation

• Ecient capital allocation

• Enhanced integration due to closer alignment

• Improved key sta retention

Culture and values

Retention of existing

management

• Location-speciﬁc experience retained within the business

• Maintenance of customer and supplier networks

• Less disruptive to existing sta

• Maintains local entrepreneurial spirit

Cultural ﬁt, focused on:

• Quality

• People

• Strong customer and

supplier relationships

• Honesty

• Fairness

• Strategic alignment

• Streamlined integration

• Risk management

• Less disruptive to existing Trifast culture

Case study: Acquisition of TR Falcon

$8.3m

consideration

0.20p

earning enhancing

inFY2022

$6.6m

of revenue

$0.5m

of EBIT

Non-organic growth

inFY2022:

This is a fantastic opportunity for Falcon’s employees,

customersand suppliers. Becoming part of Trifast has given

all of us at Falcon the opportunity to work more closely with a

well-respected international business, to share knowledge and

experience on both sides and to beneﬁt from being able to access

Trifast’s globalsourcing, purchasing and marketing capabilities

Giovanni Cespedes

President at TR Falcon

Strategic report

36 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Accelerated acquisition

journey continued

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

A global leader

inattractive

markets

Ambitious

growth

strategy

Background

Falcon was originally founded in 1979 as a family-owned

distributor of industrial fastenings and Category ‘C’

components and now operates from two locations in

North Carolina and Kentucky. The business specialises

in designing customised supply chain solutions that

support lean principles in manufacturing to reduce cost

and improve eciency for its clients.

Over 90% of production components supplied by Falcon

are customer specials. TR Falcon’s focus is on ET&I and

general industrial, providing diversiﬁcation away from

the light vehicles sector and with minimal crossover with

TR’s existing North American customer base.

President and major shareholder Giovanni Cespedes,

who has worked for the business since 2008, has

remained with the business and continues to lead

theFalcon team.

Investment case

Trifast acquired TR Falcon in August 2021 for a total

debt-free, cash-free consideration of $8.3m (£6.0m),

which was funded through the Group’s existing cash

and ﬁnancing facilities.

TR Falcon provides the Group with a much-improved

presence in a key US location, North Carolina, which

is home to 29 of our top 100 customers. As a result of

this acquisition, we now have the opportunity to gain

greater market share by oering a full and ﬂexible TR

localised service and have speciﬁcally gained access

to two new key multinational OEMs operating in

theregion.

From the Trifast side, we can oer improved

sourcingand logistics opportunities, to allow us

to increase regional margins across both of our

Americanbusinesses.

TR Falcon is an exciting ﬁrst step

on ouraccelerated North American

acquisitionjourney

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 37

Robust balance

sheet and focus

oncapital allocation

A strong balance sheet,

ﬂexible banking facilities and

a structured capital allocation

framework provide the capability

and conﬁdence to invest for

enhancedlong-term returns

Strategic report

38 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

38 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

A global leader

inattractive

markets

Focus on

sustainability

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 39

Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 39

Strategic report

70%-80%

of underlying EBITDA

target cash conversion

1.27x

leverage multiple

(31March 2022)

Strategic report

40 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Robust balance sheet and

focus on capital allocation

Framework Ambitious growth

strategy

Investing for

organicgrowth

Sustainable long-term organic

growth will always require

investment. Inaddition to

working capital requirements,

there continues to be

opportunities to expand

capacity, capability and our

product range, allowing us

to protect and build our

competitiveadvantage

Over and above maintenance

capital expenditure, the Board

therefore pays particular

attention to areas of spend that

can become future generators of

above-average returns. Building

out our manufacturing and

distribution footprint, increased

digital capabilities and product

launches would be typical of this

sort of capital allocation (see

our investing for organic growth

strategy on pages 28 and 29)

A speciﬁc point in time

It is the Board’s aim to maximise

long-term returns. As such,

the generation and disciplined

deployment of free cash is a

core aspect of Trifast’s strategy.

The following framework and

priorities have been established

and these are refreshed as part

of our annual budgeting process.

To allow a consistent approach

across projects of varying kinds

and also between years, the

Board has deﬁned cash ﬂow

return on investment as its

measure of choice and will look

to allocate capital to projects

which provide the best return

asset against our cost of capital

Organic revenue growth is an

integral part of our strategy

and indeed an area predisposed

to higher returns. For the

foreseeable future, we believe

there is scope for continued

increases in market share, such

that we deliver average revenue

growth in excess of global GDP

(see our KSIs on page 12 and 13).

However, it is essential that we

have adequate working capital

todeploy to secure this

As a result of that growth

ambition, we view a 70-80% cash

conversion of underlying EBITDA

to be an appropriate target for

the medium term (see our KPIs

on page 14 and 15), allowing

us to maintain a sustainable

return of cash back into the

business to fund our ongoing

growth journey. Working capital

eciency remains an ongoing

focus, which we expect to be

further assisted by the continued

roll-out of Project Atlas

The current high levels of macro uncertainty and supply chain challenge have necessitated a much higher than normal stock

holding as at 31 March 2022 (see the ﬁnancial review on page 53). We consider this to be a temporary position and expect

to revert to more normalised levels once the macroenvironment settles. This reversal will provide the opportunity to achieve

much higher cash conversion levels than our medium-term target, thereby reducing current leverage multiples and facilitating

further investment

Focus on

sustainability

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

1.0x-2.0x

Target leverage range

£29.3m

facility headroom

(plus £40m accordion,

31March 2022)

3x to 4x

target dividend

coverrange

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 41

Reward

Accelerated

acquisitionjourney

Banking facilities

andleverage/gearing

Returns to

shareholders

Equity ownership is a key aspect

of our approach to Group-wide

remuneration, aligning

employees’ interests with those

of shareholders; schemes exist

to facilitate this. Given the desire

to minimise earnings dilution

from any such awards, the Board

plans to make ongoing use of the

already established Employee

Beneﬁt Trust (EBT) as appropriate

1. Calculated in line with banking agreement

Alongside investment within our

existing operations, non-organic

growth also forms a critical part

of Trifast’s strategy. As such,

the Board has a well-deﬁned

and disciplined approach to

acquisitions where our primary

ﬁnancial objective will be to

target returns (as an absolute

minimum) in excess of our

WACC, over a reasonable time

frame (see our accelerated

acquisition journey strategy

onpages 34 and 35)

To support our ambitious growth

strategy, the Group has access

to an £80m revolving credit

facility with an additional £40m

accordion. Facility headroom

(excluding accordion) is £29.3m

as at 31 March 2022, providing

signiﬁcant ﬂexibility to continue

to invest, subject to leverage

appetite levels

The Board has determined that

inthe current macroeconomic

and shareholder environment,

itis appropriate to adopt a

prudent but ﬂexible capital

structure and will seek to operate

in certain circumstances e.g.

non-organic investment with

leverage of up to 2.0x adjusted

net debt (before IFRS 16):

underlying EBITDA. The Board

also seeks to maintain a minimum

leverage of 1.0x to ensure an

appropriate level of balance

sheet eciency

As at 31 March 2022, the Group’s

adjusted leverage ratio of 1.27x

sits within target range, providing

headroom against appetite to

support further organic and

non-organicinvestment

The Board recognises the role

of dividends in forming part

of our total shareholder return

(TSR). As such, it is committed

to a progressive dividend

policy with a target dividend

cover of between 3x and 4x.

For the medium term, the

Board believes a payout ratio

at the top end of this range is

appropriate. This approach will

ensure the Group is also able to

prioritise investments which will

support the Group’s strategic

development and underpin

capital appreciation. Special

dividends and share buy-backs,

having been considered, do not

currently form part of our capital

allocation framework

Strategic report

42 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

42 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Focus on

sustainability

Trifast is committed to

securinga sustainable future.

Our sustainability strategy will

help us play our part in shaping

a sustainable economy, using

our technical expertise to drive

innovation that adds value to

society and our planet

We have developed a clear vision for sustainability for the next ﬁve

years and have created a focused strategy that will improve both our

sustainability and opportunities in a changing market

Our ﬁve-year sustainability

strategy framework

(2022-2026)

Create

socio-economic

value

Enable

sustainable

innovation

Build

a sustainable

supply chain

We will seek to improve

the visibility of our entire

supply chain. We will work

with suppliers to improve

sustainability standards

and performance,

and manage risks and

opportunities eectively

We will seek out innovation

opportunities to develop more

sustainable fasteners and work

with customers to support more

sustainable products

We will create

valueforour peopleand

communities, supporting

development,

diversity, equality

andintrapreneurship

We will manage environmental

issueseectively across our business.

We will work to achievenet zero

carbon, ensureour business is resilient

toclimate change risks, and seekout the

opportunities froma lowcarbon economy

Act

on environment

andclimatechange

Our Vision:

Securing a sustainable

future

Supporting a sustainable economy

using our technical expertise to

empower customers, suppliers and

our people to innovate sustainable

solutions that add value to society

and our planet

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Focus on

sustainability

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 43

Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 43

Strategic report

Mark Belton

Chief Executive Ocer

Strategic report

44 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Focus on

sustainability

Our strategy sets out

the blueprint for an

exciting future

4.95%

reduction in our kgs

e per £1k turnover

during FY2022

40/41

UK Corporate

Governance Code

(2018) provisions

complied with

7.5/10

Happiness index score

Key sustainability stats Ratings and achievements

During FY2022 we conducted a full review of our global

KSIs and operational KPIs, which will be reportedintothe

Trifast plc Board and our Operational Executive Board.

In addition, we have also included a second level of

KPIswhich we believe will support functional reporting

ofsustainability data.

These indicators have now been expanded to

includea more detailed overview of our sustainability

performance, supporting the ongoing commitment to

oursustainabilitystrategy.

I am pleased that our work to explore and assess

climate-related risks and opportunities has gone well and

this report includes disclosures in line with the Task Force

on Climate-related Financial Disclosures. A summary of

our approach is set out on pages 86 to 88 and there are

further disclosures throughout this report.

Find out more on page 91

For more information

on our sustainability

KSIs, KPIs and water

use, please see the

separate Sustainability

Report2022

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Focus on

sustainability

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 45

If we look back over the years, we can see how our

teamshave successfully identiﬁed hotspots and emerging

technologies and this, you may recall, was reﬂected in

the way we presented the sectors in which we have a key

presence, in the Annual Report and on our website last year.

The change in the mix of our business is clearly shown

inthe way we proﬁle the markets in which we operate

(see pages 20 to 25).

Within our key market sectors we have many exciting

opportunities. In automotive, we specialise in the interior,

including the dashboard, seating and lighting components

used in both light and heavy vehicles. The ever-quickening

growth in the electric vehicles and hybrid models in both

categories across the world has enabled us to build our

presence in the manufacture and supply of fasteners for

electric vehicle (EV) charging units, connection points

and battery technology. Here, we are also working

with leading automotive manufacturers in developing

new products that are lighter, critically safe and

environmentally friendly. We believe that the opportunity

in EV and hybrid fastener spend is almost double that

available to us in a traditional internal combustion engine

(ICE) platform.

Opportunities in a changing world

As part of our Sustainability Report last November,

Ihighlighted our step change in ambition and our focus on

a sustainable strategy. Our strategy sets out the blueprint

for an exciting future for the business in its ambition to

deliver sustainable products that add value to society,

andto become a much bigger company.

The world is changing fast – not only as a result of the

Covid-19 pandemic but through global technological

advances, legislative changes, the way we work, shop,

interact and collaborate with all our friends, family,

colleagues, customers and suppliers. Our focus is to

deliver innovation that supports our customers to

createasustainable future.

Innovation today for a better tomorrow

Change is good and creates opportunities for

Trifast.Fasteners are usually down the list on the picking

order when customers are designing new products or

platforms, as they know they have a trusted supplier in

Trifast that can help them overcome their application

fastener challenges. Who would think that the humble

fastener would require so much engineering expertise,

but if it is not ﬁt for purpose then the ramiﬁcations can

have signiﬁcant consequences on customer products

andreputation.

AR paper 100% recycled

This report is printed

on Nautilus Superwhite

100% recycled made from

FSC® recycled certiﬁed

post-consumer waste pulp.

Printed sustainably in

the UK by Pureprint, a

CarbonNeutral® company

with FSC® chain of custody

and an ISO 14001 certiﬁed

environmental management

system recycling 100% of all

dry waste.

Trifast plc

Annual Report for the year ended 31 March 2022

Growing

sustainably,

together

Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

46 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Focus on sustainability continued

Innovation today for a better tomorrow continued

It is not just within automotive where we see

growthopportunities. The energy, tech & infrastructure

(ET&I) sector is responding to the need for enhanced

connectivity, e.g. 5G base stations, larger data centres,

theInternet of Things and more ecient robotic,

automated ways of working and living, with a growing

demand to be powered via renewable energy products.

All of these areas are fastener rich.

Within our health & home sector, the changes in the

world since 2020 have seen our working lives transform,

creating what has become, for many of us, a hybrid

working environment with the need for more portable

equipment as well as healthier lifestyles. Asaresult,

wehave beneﬁted from the growth in health and

wellbeing products, from electric bicycles and rowing

machines, to coee makers and respirators, which

is creating more opportunities in a sector where

wealreadyhave a strong presence.

There is also a move away from being a ‘throwaway’

society to one of ‘repair’. Fasteners are critical in this

change, allowing products to be repaired rather than

thrown into landﬁll. Recent legislation known as ‘Right to

Repair Regulations’ came into place within the UK and EU,

and these will beneﬁt several of our sectors. Where once

manufacturers welded plastic parts into their applications

to save costs, now they are using fasteners and this trend

is here to stay.

Our ‘think global, work local’ ethos has long been in

ourDNA and already makes a dierence to the impact

wehave on the environment and this will continue as

we‘on/near shore’ suppliers and our own manufacturing.

Thisprovides further reassurance to our customers that

we can sustainably support them globally.

Whilst there will continue to be challenges in the

macroenvironment, as a team, we embrace technological

and sustainability changes in our markets as this provides

the opportunities for us to showcase and support

customers today for their innovation tomorrow.

The Ecodesign for Energy-Related Products and Energy

Information Regulations 2021 (SI2021 No.745), sometimes referred

to as the ‘Right to Repair Regulations’, were made on 18June2021

and most of the provisions came into force on 1 July 2021.

The Regulations apply to Great Britain (GB). Northern Ireland

continues to be subject to EU ecodesign and energy labelling

requirements under the Northern Ireland Protocol.

MSCI ESG Research LLC

The use by Trifast of any MSCI ESG Research LLC or its aliates

(MSCI) data, and the use of MSCI logos, trademarks, service

marks or index names herein, do not constitute a sponsorship,

endorsement, recommendation or promotion of Trifast by MSCI.

MSCI services and data are the property of MSCI or its information

providers, and are provided ‘as-is’ and without warranty. MSCI

names and logos are trademarks or service marks of MSCI.

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Focus on

sustainability

Governance

Find out more in

ourSustainability

Report 2022

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 47

Our sustainability structure

Plc Board

Sustainability

Committee

Links to:

Executive Sustainability

Committee, Audit&Risk

Committee,

Remuneration Committee,

NominationCommittee

Executive

Sustainability

Committee

Links to:

Management

Sustainability Working

Group

Management

Sustainability

Working Group

Links to:

Network of

Sustainability

Champions

Network of

Sustainability

Champions

Links to:

Locations

Purpose:

To understand

and articulate the

sustainability strategy

and how it relates with

the broader purpose,

vision and strategy

Purpose:

To understand and

ensure the delivery

of the sustainability

strategy, commitments

and targets, projects

and budgets

Purpose:

To understand and

take responsibility

for the delivery of the

sustainability strategy,

taking into account

its commitments

andtargets, projects,

budgets, cultural

enablers and barriers

Purpose:

To help drive the

implantations of key

strategic sustainability

projects and to

leverage the interest

in sustainability

throughout the Group

Our

stakeholders

Our people

Investors

Regulators/

governments

Communities Customers

Suppliers

The Group can only

continue to grow and

prosper over the long

term if we all respect

andunderstand the views

and needs of our internal

and external stakeholders

48 Trifast plcAnnual Report for the year ended 31 March 2022

Investment case

Focus on sustainability continued

Strategic reportStrategic report

Stakeholder engagement

The Board recognises the signiﬁcance of considering

the Company’s responsibilities and duties for the long

term, with the aim of always protecting reputation and

upholding the highest standards of conduct

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

Global leader

inattractive

markets

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Focus on

sustainability

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 49

Strategic report Governance Financial statements Additional information

Our people Investors Customers

The Board recognises that

the Group’s greatest asset is

its employees. The Directors

communicate regularly with

teamsthroughout the business

viaa variety of media

We continue to invest in

ourtraining provision for our

employees to ensure that we have

the best skill sets that are relevant

to each of our job roles

Additionally, Trifast is committed

to providing a safe and fair

environment. We enforce this

commitment through our health

and safety management systems

Our investors enable the Company

to grow. We maintain strong

relationships with shareholders,

ensuring they understand

our progress and strategic

performance and that we strive

to understand how they view

ourbusiness

The Board considers that

anongoing dialogue with all

shareholders is important

We operate a structured

programme throughout the year

where management are available

to all shareholders

Trifast prides itself on its

long-standing partnerships

withallits customers

Our reputation in the industry for

quality is second to none at a time

when customers are beginning to

focus more and more on this. We

are known for our commitment

and ability to go the extra mile

for our customers, solving issues

before they arise and stepping

in where competitors have

fallenshort

Find out more on page 68

Find out more on page 69 Find out more on page 70

Suppliers Communities Regulators/governments

A combination of in-house

manufacturing and established

world-class suppliers enable us

to be a truly ‘one-stop’ solution.

Our suppliers and our global

manufacturing sites provide us

with the goods and services we

rely on to deliver to our customers.

They range from substantial

multinational companies to

small-scale local businesses

providing bespoke services

whenthey are needed

We recognise that our business

activities have an impact on the

communities in which we operate,

and we remain committed to

interacting responsibly with

those communities. It is our

responsibility to respect and value

others and maintain high ethical

standards in everything we do.

We are committed to the care and

stewardship of the communities

and environments our businesses

are involved in as a Group and

across our 34 locations

We are committed to complying

with applicable legislation and

make necessary declarations

andsubmissions, including market

announcements and compliance

disclosures for issues such as

diversity, packaging, hazardous

and restricted materials, and

carbon emissions

Find out more on page 71

Find out more on page 72 Find out more on page 73

50 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

Investment case

Focus on sustainability continued

Our commitments and key projects

Create socio-economic value

Commitments:

• We will implement a ‘League of

Intrapreneurs’ chapter in 2022

• We will publish our ﬁrst socio-economic

value report by 2026

Key projects:

• Further develop our employee

engagement campaign and surveys

• Implement sustainability learning

anddevelopment

• Expand diversity programme

• Publish community value report

• Expand STEM programme

What we have achieved this year:

• Implemented our internal ESG

communication structure

• Extended our employee engagement

survey frequency and reach

• STEM presentations in schools to

raiseawareness

• Rolled out our global Wellbeing and

Employee Assistance Programme

Act on environment and climate change

Commitments:

• We will set a science-based net zero target

for scope 1 and 2 emissions by 2023

• We will expand this target to include scope

3 emissions by 2026

Key projects:

• Develop a carbon management plan

• Introduce a waste and water strategy

• Publish our TCFD and Carbon disclosure

project reporting (CDP)

What we have achieved this year:

• Transitioned carbon data into the Carbon

Trust – footprint manager

• Collated 2021/2022 water data

• Collated scope 3 business travel data

• CDP reporting completed

• EcoVadis reporting completed

Focus on

sustainability

Robust balance

sheetand focus

oncapital

allocation

Ambitious

growth

strategy

Global leader

inattractive

markets

A global leader

inattractive

markets

Ambitious

growth

strategy

Robust balance

sheetand focus

oncapital

allocation

Focus on

sustainability

Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 51

Strategic report

Build a sustainable supply chain

Commitments:

• We will develop a sustainable supply chain

strategy by 2025

Key projects:

• Map the sustainability impacts and supply

chain transparency for a product

• Implement supply chain charter

• Develop supplier sustainability risk register

• Complete a full life cycle assessment for

two key products – external supply and

internal manufacturing

What we have achieved this year:

• Developed our key suppliers with our

Quality and Sustainability agreement

• Despite travel restrictions, completed

155supplier audits

Enable sustainable innovation

Commitments:

• We will develop a sustainable innovation

strategy by 2024

• We will launch a sustainable fastening

solution with one of our clients by 2025

Key projects:

• Complete a ‘cradle-to-cradle’

feasibilitystudy

• Complete a closed loop manufacturing study

• New clean-tech market products study:

creating sustainable design framework

What we have achieved this year:

• Commenced project planning

• First example life cycle calculations

• Recruitment of life cycle engineer/analyst

• Raised awareness in preparation of

culturechange

Strategic report

52 Trifast plcAnnual Report for the year ended 31 March 2022

The next couple of years

remain a very exciting

and challenging time

for the business as we

build the momentum

and the foundation

for ourmedium-term

aspirations

Our Group performance

Underlying measures

CER

FY2022

CER

change

AER

FY2022

AER

change FY2021 FY2020

Revenue

£223.3m

18.7%

£218.6m

16.2% £188.2m £200.2m

Gross proﬁt %

26.6%

10bps

26.7%

20bps 26.5% 27. 5%

Underlying operating proﬁt (UOP)

£15.2m

27.1%

£14.7m

23.1% £12.0m £15.8m

Underlying operating proﬁt %

6.8%

40bps

6.7%

30bps 6.4% 7.9%

Underlying proﬁt before tax

£14.2m

29.2%

£13.8m

25.0% £11.0m £14.7m

Underlying diluted earnings per share

8.44p

35.3%

8.13p

30.3% 6.24p 8.64p

Adjusted leverage ratio

1,3

1.27x

n/a n/a 0.80x

Adjusted net (debt)/cash

1, 2

£(23.8)m

£(37.1)m £13.3m £(15.2)m

Underlying return on capital employed

(ROCE)

8.3%

150bps 6.8% 8.8%

GAAP measures

Operating proﬁt

£11.6m

32.5% £8.8m £4.1m

Operating proﬁt %

5.3%

60bps 4.7% 2.0%

Proﬁt before tax

£10.6m

36.4% £7. 8 m £3.0m

Diluted earnings per share

6.56p

52.2% 4.31p (0.19)p

1. Before separately disclosed items (see notes 2 and 32)

2. Adjusted net (debt)/cash is presented excluding the impact of IFRS 16 Leases as this is how the calculation is performed for

the purposes of the Group’s banking facilities. Including right-of-use liabilities, net debt would increase by £(13.7)m to £(37.5)m

(FY2021: net cash would decrease by £(12.8)m to net cash of £0.5m)

3. Calculated in line with banking agreement (see note 32)

Financial

review

Clare Foster

Chief Financial Ocer

Unless stated otherwise, amounts and comparisons with prior

year are calculated at constant currency (Constant Exchange

Rate (CER)). Comparisons with FY2020 are calculated at FY2020

exchange rates. Where we refer to ‘underlying’ this is deﬁned as

being before separately disclosed items (see note 2).

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 53

FX eects

Revenue UOP Underlying diluted EPS

FY2022 was a very positive year for the Group. Robust

growth in the second half followed a strong recovery in

HY1, to end the year with revenues up 18.7% to £223.3m

(AER 16.2% to £218.6m; FY2021: £188.2m). 15.9% of that

growth was organic, with the remaining 2.8% reﬂecting

seven months’ trading from our latest acquisition, TR

Falcon. Against FY2020, we grew organically by 8.9%,

meaning that FY2022 represented a record-breaking

trading year for the Group, with organic revenues coming

in 2.3% greater (at AER) than our previous highest level

of£209.0m, as recorded in FY2019.

This growth reﬂected persistent high demand in most

of our underlying markets, and was achieved despite

supply chain shortages across a number of sectors,

most markedly in the light vehicle market, coupled with

a signiﬁcant increase in our sales to distributors, as end

customers increased in-ﬁll stock purchasing in the face

ofwider supply chain pressures.

Gross margins have remained in line with FY2021 at 26.6%

(AER: 26.7%; FY2021: 26.5%) as the positive impact of

higher revenues has been oset by the lag eect in the

pass-through of inﬂationary cost pressures. By the end

of FY2022, we had successfully concluded most of our

phase one price increase programme negotiations and

we are pleased to report that in March 2022 we recorded

gross margins much closer to historic levels.

UOP increased signiﬁcantly by 27.1% to £15.2m (AER:

up23.1% to £14.7m, FY2021: £12.0m), with UOP margin

up 40bps to 6.8% (AER: up 30bps to 6.7%, FY2021:

6.4%). Operational gearing gains fed through into proﬁts,

although the positive impact of this was partially oset

by the normalisation of overheads from a lowered FY2021

base (including the removal of government support

schemes) as well as ongoing strategic investments to

support our organic growth journey.

Reﬂecting the strong trading performance, our underlying

PBT is up 29.2% at CER to £14.2m (AER: 25.0% to £13.8m;

FY2021: £11.0m). This, coupled with a reduction in our

underlying eective tax rate, has resulted in a marked

increase in our underlying diluted earnings per share

(EPS), up 30.3% to 8.13p at AER (FY2021: 6.24p).

Supply chain challenges remain and although lead

times are now stabilising across most of the world,

these continue to stand at historically high levels.

Considering this challenging backdrop and given our

strong ﬁnancial position, the business took the decision

to invest in inventory levels in FY2022 (£31.7m) to support

growth and ensure reliability of supply. This has led to a

temporarily negative underlying cash conversion rate at

AER of (66.8)% (FY2021: 147.9%), which, in conjunction

with the acquisition of Falcon on 31 August 2021 for

£5.8m(net of cash), means that we ended the year

withan adjusted net debt position of £(23.8)m (FY2021:

£13.3m adjusted net cash). We expect the investment in

stock to reduce and drive historically high cash generation

rates, as the macroeconomic environment settles.

As a result of these investments, our leverage ratio,

calculated in line with the banking agreement, at

31March2022, was 1.27x (FY2021: n/a – adjusted

net cash). Whilst this is higher than recent history,

itremains within our target range of 1.0x to 2.0x and

therefore continues to provide ﬂexibility to invest in

future non-organic growth. Facility headroom as at

31March2022 was c.£30m (FY2021: c.£62.6m), as

statedbefore an additional £40m accordion option.

CER continues to be the best way of understanding

the positive progress of our underlying business. To aid

understanding, the impact of this on our key metrics is

illustrated in the graph below.

£218.6m

£188.1m

£200.2m

£4.7m

£0.1m

£0.3m

2022

£14.7m

£0.5m

2022

8.13p

0.31p

20222021

£12.0m

£0.1m

2021

6.24p

0.08p

20212020

£15.7m

£0.1m

2020

8.62p

0.02p

2020

AER



CER

Strategic report

54 Trifast plcAnnual Report for the year ended 31 March 2022

Dividend cover

FY2021

3.9x

FY2022

3.9x

FY2020

7.2x

FY2019

3.0x

FY2018

3.6x

Dividend progression

0.0p

2018 2019 2020 20222021

4.50p

4.00p

3.50p

3.00p

2.50p

2.00p

1.50p

0.50p

1.00p

Interim

Final

Total

Financial review continued

Dividend policy

Following such a strong recovery in FY2022 and with an

ambitious growth strategy in place, we remain committed

to a progressive dividend policy that shares the beneﬁt of

ongoing proﬁt growth with our shareholders.

As a result, the Directors are proposing, subject

toshareholder approval, a ﬁnal dividend of 1.40p

per share. This, together with the interim dividend of

0.70p(paid on 14 April 2022), brings the total for the

year to 2.10p per share, an increase of 31.3% on the prior

year (FY2021:1.60p). The ﬁnal dividend will be paid on

14October 2022 to shareholders on the register at the

close of business on 16 September 2022. The ordinary

shares will become ex-dividend on 15 September 2022.

We continue to consider that an appropriate level of

dividend cover is in the range of 3.0x to 4.0x. For the

medium term, the Board intends to target a payout at the

top end of this range to allow for the expected ongoing

organic growth, strategic investments and acquisitions.

Revenue

We have seen strong growth across all our regions,

withrevenue increases ranging from 13.9% to 89.2%

(3.5%to 78.1% against pre-Covid-19 FY2020).

Themajority of these increases reﬂect volume, rather

than price increases, largely due to transitional delays

inthe pass-through of inﬂationary cost pressures

outsideofourdistributor sector business.

Europe has seen a 14.2% increase to £83.9m (AER 9.6%

to £80.6m; FY2021: £73.5m) to report record revenues

that are 14.3% ahead of FY2020. We have seen the

highest growth from our German business, across a mix of

sectors. Strong growth in the energy, tech & infrastructure

(ET&I) sector, and a new global health and home OEM,

has led to a marked trading increase at our Hungarian

operations. Our Italian operations drove the greatest

revenue increase in the region in HY1, predominantly into

the health &home sector, with revenues in the second half

of the year going on to stabilise at this high level. Supply

chain shortages, most particularly in the light vehicle

sector, have continued to limit growth in Holland.

1. In FY2021, one dividend payment was made, rather than an interim and ﬁnal, due to the impact of Covid-19

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 55

Revenue split by region

2021/2022

Europe

North America

Asia

£56.1m

£49.3m

£83.9m

£68.9m

£18.4m

£9.7m

£83.9m

£73.5m

2021

2022

External revenue split by sector 2021/2022

20%

16%

25%

27%

17%

16%

12%

2021

2022

Light vehicle

Heavy vehicle

ET&I

Distributors

Health &home

General industrial

22%

12%

25%

1. Regional revenues include intercompany

2. Excluding the impact of the disposal of TR Formac (Malaysia) in November 2020, the CER revenue increase in FY2022 was 15.2%

against FY2021, and 5.2% against FY2020

However, we are pleased to report that despite a

similar sector focus on the light vehicle market, solid

market share gains in Spain have been able to more

than oset these macro challenges, to drive >20%

year-on-yeargrowth.

In Asia, we have seen a revenue increase of 13.9% to

£56.1m (AER: 12.3% to £55.4m; FY2021: £49.3m), but

with trading only 3.5%

ahead of FY2020. One of the

main reasons the region was slower to recover was the

summer lockdowns and December ﬂoods in Malaysia that

limited domestic light vehicle volumes and also health &

home production levels at one of our key multinational

OEMs. In contrast, we have seen exceptionally strong

growth in Taiwan as distributor sales recovered and grew

substantially beyond pre-Covid-19 levels in key European

end markets. In Singapore, solid growth in the ET&I sector,

supplemented by increased intercompany manufacturing,

has more than oset temporary sub-contractor transfer

issues at a key health & home customer.

Trading levels in the UK have recovered and grown very

strongly, with revenues increasing by 21.7% to £83.9m

(FY2021: £68.9m), to end 11.1% ahead of FY2020.

Thebiggest driver of this has been signiﬁcantly higher

sales volumes to distributors, coupled with a market

pricing model that allows for the rapid pass-through

of inﬂationary costs in this sector. Health & home

and general industrial sales have continued to show

strong growth across a number of key global OEM

customers. However, light vehicle sales remain below

pre-Covid-19 levels, predominantly due to the impact

ofsemi-conductor shortages.

In North America revenue growth has been very high at

89.2% to £18.4m (AER: 82.0% to £17.7m; FY2021: £9.7m),

leading to a 71.8% increase against the pre-Covid-19

FY2020 period. Organic growth has driven 36.6% of this

as new platform builds in the light vehicle sector come

online and ET&I sales gain momentum. TR Falcon has

represented 52.6% of growth, with revenues running

slightly ahead of expectation since acquisition on

31August 2021.

Strategic report

56 Trifast plcAnnual Report for the year ended 31 March 2022

Financial review continued

Underlying operating proﬁt

Underlying operating margins have increased by 40bps,

to 6.8% (FY2021: 6.4%) contributing to a strong uptick in

operating proﬁt of 27.1%, to £15.2m at CER (AER: up 23.1%

to £14.7m; FY2021: £12.0m).

As a group we have seen the positive impact of stronger

sales driving operating proﬁt increases and margin

upgrades. Further supplemented by a shift in sector

mix with a greater proportion of the Group’s trading

being secured in the higher margin distributor sector.

The normalisation of our overhead base, including the

removal of government support schemes and the return

of higher bonus, travel and other discretionary spend has

oset this in part. In addition to which, the business has

made a number of targeted strategic investments (see

pages 28 to 31) to support our ongoing growth journey.

This includes Project Atlas business as usual costs, now

roll-out is underway, further investments into our HR, ESG

and acquisition capabilities and targeted recruitment into

our commercial and compliance teams.

Outside of North America all of our regions are

nowshowing underlying operating proﬁts, with

Asiacontinuing to bring in the highest returns at

12.9%(FY2021: 13.2%). In North America we have seen

an improvement in year-on-year margins from a negative

position of (5.9)% in FY2021, as very strong sales growth

has driven operational gearing gains, and following the

acquisition of TR Falcon in August 2021. Our European

region has seen the largest fall, recording a reduction

of 210bps, as sales growth gains are more than oset

by gross margin pressures due to the relatively early

onset and then transitional delays in the pass-through of

inﬂationary cost pressures. Cost increases have impacted

underlying operating proﬁts across all regions and are

expected to continue to do so as ongoing cost inﬂation

and price increase negotiations become an everyday and

key part of doing business.

Underlying operating proﬁt

and margin by region FY2022

Europe

North America

Asia

£7.3m

12.9%

£8.1m

9.7%

£4.2m

5.0%

£(0.0)m

(0.3)%

Underlying operating proﬁt

and margin by region FY2021

Europe

North America

Asia

£6.5m

13.2%

£3.7m

5.4%

£5.2m

7.1%

£(0.6)m

(5.9)%

GAAP measures: operating proﬁt by region (AER)

FY2022 FY2021

Proﬁt/(loss)

(£m) Margin

Proﬁt/(loss)

(£m) Margin

7.7 9.1%

3.1 4.5%

Europe

2.8 3.5%

4.1 5.6%

Asia

7.1 12.8%

6.5 13.2%

USA

(0.3) (1.6)%

(0.6) (5.9)%

Central costs

(5.7) N/A

(4. 3) N/A

Total 11.6 5.3%

8.8 4.7%

1. After allocating separately disclosed items

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 57

Net ﬁnancing costs (at AER)

Interest costs have remained level at £1.0m (FY2021:

£1.0m) as average gross debt (including IFRS 16)

remained broadly in line at £44.4m (FY2021: £47.6m),

net marginal interest rates (net of commitment fees)

remain low and the Group’s main banking facilities

remainunchanged.

Taxation (at AER)

The underlying eective tax rate (ETR) is lower at 19.1%

(FY2021: underlying eective tax rate: 23.9%). The main

reason for the dierence is the year-on-year movement

inadjustments in respect of prior years.

Subject to future tax changes and excluding prior year

adjustments, our normalised underlying ETR is expected

to remain in the range of c.20-25% going forward.

The main reason for the dierence between our FY2022

ETR of 15.4% and the FY2021 ETR of 25.6% is due to a

patent box claim in Italy in addition to the adjustments

inrespect of prior years mentioned above.

Net debt (AER)

The Group’s adjusted net debt has increased by

£37.1mto£(23.8)m (FY2021: adjusted net cash of £13.3m),

predominantly reﬂecting £34.7m of net working capital

investments to support growth and ensure reliability

ofsupply.

Outside of working capital, £(5.8)m (net of cash acquired)

was used to fund the acquisition of Falcon (USA) on

31 August 2021 and supporting the Board’s ongoing

investments for organic growth, capital expenditure in

the period amounted to £5.2m (FY2021: £3.1m), including

£1.5m in relation to Project Atlas. Further details of these

strategic investments are provided on pages 34 to 37 and

pages 30 and 31 respectively.

Including the impact of IFRS 16 Leases, the Group’s net

debt position was £(37.5)m (FY2021: net cash of £0.5m).

Adjusted net debt bridge

£(30.0)m

£(20.0)m

£(10.0)m

£0.0m

£10.0m

£20.0m

£30.0m

Adjusted

net cash

FY2021

£13.3m

£(5.8)m

Acquisition

of subsidiary

(net of cash

received)

£17.7m

Operating

cash inﬂow

£(31.7)m

Increase

in stock

£(6.0)m

Increase

in debtors

£(5.0)m

Other

£(6.3)m

Capex

and Atlas

£(23.8)m

Adjusted

net debt

FY2022

1. Adjusted net debt is stated excluding the impact of IFRS 16 Leases. Including right-of-use lease liabilities, net debt increases by

£13.7m to £37.5m and operating cash inﬂow before changes in working capital increases by £3.0m (FY2021: net cash decreases by

£12.8m to £0.5m)

2. Including purchase of own shares, dividends paid, other working capital movements, tax, interest and FX

Strategic report

58 Trifast plcAnnual Report for the year ended 31 March 2022

Financial review continued

Return on capital employed (at AER)

As at 31 March 2022, the Group’s shareholders’ equity

increased to £139.1m (FY2021: £131.8m). The £7.3m uplift

reﬂects retained earnings of £6.8m (FY2021: £4.3m),

an investment in own shares of £(3.0)m, other share

movements of £0.7m and a foreign exchange reserve

gainof £2.8m.

Over this increased asset base and given the strong

growth in proﬁts, our ROCE has increased 150bps from

31 March 2021 to 8.3% (FY2021: 6.8%).

At 31 March 2022, the number of ordinary shares held by

the Employee Beneﬁt Trust (EBT) to honour future equity

award commitments had increased to 2,194,470 shares

(FY2021: 329,087 shares).

Project Atlas

Full details of our progress and plans for Project Atlas are

provided on pages 30 and 31.

The ﬁnancial impact of the work undertaken to date

on this project is as follows. We have incurred direct

costs of£2.6m in FY2022 (cumulatively £14.9m),

largelyrelatingto project team, consultancy and training

costs. We have excluded £1.0m of these costs from our

underlying results (see note 2), to reﬂect the unusual scale

and one-o nature of this project. In line with accounting

standards, we have also recognised the remaining £1.6m

(cumulatively £7.2m) as ﬁxed assets on the balance sheet

at 31 March 2022.

Outlook

In FY2022, the Group saw a year of both strong recovery

and robust growth. Trading has increased across all of

our regions and sectors, despite ongoing supply chain

shortages, most noticeably in the light vehicle sector and

even as set against record health & home sector trading

in FY2021. There can be no doubt that this has also been

a very challenging year, with macro level supply chain

issues, inﬂationary cost pressures and historically high

lead times. To allow us to continue to meet customers’

needs, signiﬁcant investments have been made in

inventory in FY2022, a position that we expect to start

toreverse as the macroeconomic environment settles.

Phase one of our price increase programme negotiations

is complete, returning gross margins in March 2022 much

closer to historic levels. However, to protect margins as

inﬂationary cost increases continue, we do expect price

increase negotiations to form an important ongoing

part of doing business in the current macroenvironment.

The pass-through of these additional costs is a better

understood process as we head into FY2023, than it

was a year ago, but the successful outcomes of those

conversations will remain key. Consistent with many

businesses, in the ﬁrst quarter of FY2023, we have

seena further uplift in certain key input costs, including

energy. As a result of this, in the short term we expect

tosee a period of cost recovery deferral across our

non-transactional business and therefore a greater degree

of the Group’s FY2023 proﬁtability weighted towards the

second half the year.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 59

In a changing world,

thecombination of our Trusted

Reliability, our established

customer relationships,

ourexpertise in engineering and

innovation, and our strategies

for ambitious growth put us in a

great position to make the most

of the organic and acquisition

opportunities in front of us

Our cost base in FY2022 has normalised after the

temporary savings that we were able to make in FY2021

and we have made further investments in a number of

key areas, including sourcing, sales and Group services.

We expect to continue to make targeted investments

into FY2023, to support our ongoing growth journey

and develop the foundations for the future. FY2023

andFY2024 are also key roll-out years for Project

Atlas(see pages 30 and 31).

Looking ahead, there can be no doubt that the

macroeconomic and geopolitical environment will

continue to present challenges. However, notwithstanding

this, over the last two years Trifast has proved itself more

than able to deal with macro-level issues, while continuing

to invest for growth for the medium term. As a result, the

Board remains conﬁdent in the Group’s strategic journey

and medium-term proﬁtable growth aspirations.

Clare Foster

Chief Financial Ocer

Strategic report

60 Trifast plcAnnual Report for the year ended 31 March 2022

Risk management

How the business manages risk to achieve our

strategic objectives

The Group is committed to conducting business in

compliance with all applicable laws and regulations and

in a manner consistent with its values and Global Code

ofEthics.

Risk appetite

Trifast recognises that the management of risk requires

a level of commerciality to enable the business to meet

its joint strategic objectives of protecting stakeholder

interests whilst creating stakeholder value. The Board

therefore takes responsibility for determining the nature

and extent of the principal risks it is willing to take in

achieving its strategic objectives.

Activities in the year

Annual risk review process Compliance with laws and regulations

On an annual basis, the Board, Operational Executive

Board and operational management teams are involved

in a risk assessment of the Group’s strategic plans. This

process focuses primarily on those risks associated with

the execution of the Group’s strategy and the results are

reported to the Audit & Risk Committee and the Board

for consideration and approval

Twice a year the Group reviews its key policies to

ensure ongoing compliance with all relevant laws and

regulations, including anti-bribery, whistleblowing and

share dealing. The results of this review are reported

to the Audit & Risk Committee for consideration and

approval and reported to the Board where appropriate

Internal audit Cross-functional reviews

Relevant subject matter experts carry out internal

audits for each quality accreditation standard (ISO

9001, IATF 16949, ISO 14001, ISO 27001, EN 9120)

and results of these audits are reported through top

management review

Group Finance carry out health checks for both

operational and ﬁnancial controls. Results of the health

checks are reported to the Audit & Risk Committee

for consideration and reported to the Board and OEB

where appropriate

A series of functional reviews are carried out on a

rotational basis across all business units, including

quality, supply, IT/cyber security and HR. All such

reviews are conducted by senior Group functional

personnel and the outcomes of these reviews

are reported to the Board, OEB and Audit & Risk

Committee for consideration as appropriate

Risks

Trifast’s risk management framework is designed to eectively

identify and manage risk, improving the likelihood of achieving our

strategic objectives and protecting our assets and the interests of

ourstakeholders

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 61

Risk management framework

Ensures that risk is

appropriately managed across

the business

Deﬁnes the Group’s appetite

for risk

Reviews the Group’s principal

risks and opportunities,

including adequacy of related

mitigation strategies

Assesses the Group’s principal and strategic

business risks and opportunities and proposes

adequate mitigation strategies

Inputs into the Board’s process for setting

riskappetite

Leads operational management’s approach to risk

Creates an environment where risk management

is embraced and the responsibility for risk

management is accepted by all employees

Implements and maintains risk management

processes, including the maintenance and

monitoring of operational risk registers and

mitigating processes

Monitors and reviews the eectiveness of the

Group’s risk management framework

Reviews, updates and submits the Group’s

principal risks and uncertainties to the Board

Monitors and reviews the Group’s ongoing

compliance with relevant laws and regulations

(set up on 1 April 2021, see Audit & Risk Committee report on page 104)

Oversees the Group’s risk management framework

and its ongoing development

Consolidates documentation of the Group’s risk

management activities

Supports the Operational Executive Board, Trifast

plc Board and the Audit & Risk Committee in their

risk management activities

Promotes and embeds a risk management culture

across all levels of the business

Active in:

Identifying and documenting operational risks

Carrying out risk assessments

Managing risk through operational governance

Mitigating risk through operational processes

Trifast plc Board

Audit & Risk Committee

Employees

Operational Executive Board (OEB)

Risk department

Operational management

Strategic report

62 Trifast plcAnnual Report for the year ended 31 March 2022

Risks continued

Macroeconomic environment

A more protracted global economic downturn (following

the global pandemic and/or ongoing hostilities in Ukraine)

could impact negatively on our ability to continue to grow

and invest as a business. In addition, increased trading

levels and uncertain market conditions can lead to higher

debtor balances, raising our exposure to customer failure

and bad debt write downs

Current mitigation

As a business, we operate in a very broad range of

sectorsand geographies. This means that we are not overly

dependent on any one customer, market or sector for our

ongoing success, which greatly increases our business

sustainability, even in less certain times

As customers move, or expand, we have the capability and

ﬂexibility to move with them, whilst our ﬁrst-class customer

service works to protect us from rapid supplier changeover.

For the majority of customers we still only represent a

relatively small proportion of their global fastening spend;

even in a time of volume reduction, we would continue

to expect to have the opportunity to secure growth via

customer-speciﬁc market share increases

We maintain strong credit control procedures from new

customer set up, through to regular monitoring as trade

develops. We are working closely with customers across

all of our businesses in these uncertain times to ensure

we continue to eectively manage working capital levels,

including enhanced credit control procedures

We also maintain an evolving list of cash and proﬁt

conservation initiatives that, in a downturn, we can draw on

to safeguard the short and long-term future of the business

Risk update

We are seeing evidence of demand and a return to growth

across all sectors and regions post-pandemic. However,

the speed and consistency of this is dierent, particularly

across the various regions that we operate in. In addition to

heightened global macro recessionary concerns, the ongoing

hostilities in Ukraine are already starting to impact negatively

on global trade, especially in Europe. Expectations vary, but

we consider it likely that the unsettled macroenvironment will

slow GDP growth, at least in the shorter term

Despite the current uncertain market conditions, we

haveonly received a relatively small number of credit term/

payment plan requests from speciﬁc customers, none of

which have led to signiﬁcant recovery issues to date.

The Group has not in recent years experienced any

substantial credit issues, and attrition of our key

multinational OEMs/Tier 1s remains very low

Trend Link to strategy

Supply chain challenges

he Group sources products both internally and externally

for customers around the world. If we were unable to

supply a customer in line with their ongoing manufacturing

requirements, the risk both to our reputation and in terms of

potential stoppage penalties could be substantial

Customer manufacturing volumes are dependent on

the uninterrupted supply of other component parts, e.g.

semi-conductors, creating high demand volatility. Supply

shortages fuel inﬂationary cost pressures, which can reduce

proﬁtability if we are not able to appropriately pass these

through to customers

Current mitigation

We have robust demand planning and forecasting processes

in place globally to manage supply chain risk, which Project

Atlas will further enhance (see page 30). We have also

been working closely with our suppliers and freight carriers

during these unprecedented times to ensure that we can

successfully keep all supply routes open for our customers

The signiﬁcant investment we have made into inventory

over FY2022 (see ﬁnancial review on page 53) is focused on

ensuring we can maintain reliability of supply. In addition, as

a supplier of relatively small products, we are able to make

use of air freight options, where required, to ensure we can

always meet customers’ demands, albeit at a heightened cost

The majority of our price increase programme’s ﬁrst phase

negotiations, which were designed to pass on the signiﬁcant

cost increases that we saw in FY2022, have now been

successfully completed

Risk update

Supply chain challenges remain and although raw material

and freight costs, as well as lead times, are now stabilising

across most of the world, these continue to stand at

historically high levels

We do expect ongoing shortages and supply challenges

to remain a part of doing business, especially given the

ongoing hostilities in Ukraine and the impact that this is

having on the global supply chain, including via rapidly

increasing energy costs

As a result of this, managing our supply chain will continue

to be extremely challenging for the business in the short

term and successful price negotiations will form an

important ongoing part of doing business as inﬂationary

pressures persist

Our strategic report (on pages 29 and 35) provides additional

detail about how we intend to help mitigate the above, via an

increased focus on onshoring in the medium term. Wealso

note the impact that these challenges have had to the roll-out

of Project Atlas in FY2022, as detailed on page 31

Trend Link to strategy

1 2

Principal risks

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 63

Cyber risk

A signiﬁcant cyberattack, or data security breach, could

incur penalties and have a serious impact on the Group’s

ability to trade in the short term, with longer-term negative

implications to our reputation in the marketplace and

therefore our ability to meet our growth targets in the

medium term

Current mitigation

We have made substantial additional investments to our

cyber security, including our back-up data storage and

power systems, in recent years and have global IT policies

in place that are managed by a dedicated in-house team.

Comprehensive IT risk reviews and penetration tests are

routinely carried out across all our sites and we hold ISO/

IEC 27001:2013 accreditation in our Group IT function. We

also maintain global cyber insurance which is underwritten

with ﬁrst class security in the London insurance market

Following the introduction of GDPR in 2018, we appointed a

Group Chief Privacy Ocer and implemented a framework

of activities to ensure the Group’s compliance with

thislegislation

Risk update

To date, the Group has not experienced any signiﬁcant

cyber security threats or data breaches, although we note

on a macro level that this risk is increasing. We intend

to continue investing in our cyber security (including

via Project Atlas) in response to this and will perform

afurtherdetailed review in FY2023

Trend Link to strategy

1 2

Personnel and resources

Without adequate resource, appropriate investment in

our people, succession planning and change management

across all levels of the business from the Board down, we

may not be able to deliver our future strategic plans and

long-term success

Current mitigation

Our succession planning and gap analysis processes

identify key employees and roles within the business

and are designed to broaden and transfer our specialist

knowledge and skills base. We invest in our people via

ongoing training and our Group-wide performance

development programme to ensure there is adequate

opportunity to allow our people to ‘move up’ within TR.

Rewards are reviewed annually to ensure they remain at

levels that are competitive within the marketplace

We recognise that the ongoing supply chain challenges

have led to operational disruption and additional

workload across all of our global businesses and capacity

management programmes are in progress to help manage

this. In addition, as we look to further integrate and

globalise the business (see pages 74 and 75), change

management and training are being prioritised to ensure

that we are able to appropriately support our people

through this process

Risk update

The Group enjoys extremely high retention levels, with

over 50% of sta having been in the Group for more than

ten years and the average length of service being 11 years.

Wewill continue to focus on investing in and looking after

our people, especially in such a period of change and

macro-uncertainty

Trend Link to strategy

1 2

Key to strategy

1 Investment for organic growth

2 Project Atlas

3 Engineering-led innovation

4 Accelerated acquisition journey

Organic

Acquisitive

Climate-related risks have been reviewed as

part of our TCFD disclosures on pages 86

to 88

Strategic report

64 Trifast plcAnnual Report for the year ended 31 March 2022

Risks continued

Key to strategy

1 Investment for organic growth

2 Project Atlas

3 Engineering-led innovation

4 Accelerated acquisition journey

Organic

Acquisitive

Inventory obsolescence

The Group holds substantial inventory balances across

the world. As the business grows, or as volumes ﬂuctuate

in a period of uncertainty, these levels can increase

in the short term, which can increase our exposure

toobsoleteinventory

Current mitigation

We work closely with all our businesses, customers and

suppliers to continue to manage working capital levels

eectively. Enhanced demand planning and forecasting

and wider stock management processes remain a key

partof the Group’s internal controls

Risk update

Volatile ordering levels and the push out of lead times have

necessitated a signiﬁcant increase in the amount of stock

held to allow us to maintain reliability of supply. Our supply

chain and purchasing teams have been working hard to

manage this increase as far as possible in FY2022. However,

we are exiting the year with 34 gross stock weeks, against a

long-term average of 23-25 weeks

Given the nature of this increase, and the fact that the

stock held largely relates to ongoing platform builds, we

donot consider that this position signiﬁcantly increases our

obsolescence risk. However, we will be looking to normalise

our stock holding as soon as the macroenvironment settles

Trend Link to strategy

Viability statement

In line with Provision 31 of the Code, the Directors

have assessed the prospects of the Company, taking

into account the current position and principal risks,

todetermine whether there is a reasonable expectation

that the Group will be able to meet its liabilities as they

falldue over a speciﬁed period of time.

The Group’s business activities and strategy are

centralto assessing its future prospects. These, together

with factors likely to aect its future development,

performance and position, are set out in the strategic

report on pages 02 to 89. The ﬁnancial position of

the Group, its cash ﬂows and liquidity are highlighted

in the ﬁnancial review on pages 52 to 59, the Group’s

assessment on Going Concern is detailed on page 99 and

the Group’s principal risks are detailed on pages 60 to 65.

The assessment period

The Directors have carried out this longer-term viability

assessment over a period of three years as this aligns with

the Group’s detailed forecasts. Three years is considered

an appropriate period of time for the Group as it strikes

the right balance between the need to plan for the long

term whilst considering the uncertainty that arises in

relation to assumptions the further you look ahead.

These ﬁnancial projections are based on a bottom-up

budgeting exercise for FY2023 and FY2024 which has

been approved by the Board and a more top-down view

aligned to the Group’s strategic objectives for FY2025.

Banking facilities

In assessing the prospects of the Group over the

three-year period, the Directors have also considered the

Group’s current ﬁnancial position, as well as its ﬁnancial

projections in the context of the Group’s cash and debt

facilities and associated covenants. The Group manages

its ﬁnancing by maintaining adequate facilities with

appropriate maturities and sucient levels of standby

liquidity to support its ongoing viability and growth

(seecapital allocation on pages 40 and 41).

The Group’s main £80m revolving credit facilities

willmature during the three-year period, in April 2024.

Discussions are already underway with the Group’s three

syndicated banks to put in place increased facilities

with a longer maturity date during FY2023. The primary

reason for doing this is to continue to support the Group’s

accelerated acquisition journey, however it will also act

to provide additional viability headroom. The Group’s

base projections indicate that the current cash and debt

facilities and expected future facility headroom remain

more than adequate to support the Group over the next

three years.

Principal risks continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 65

Principal risks and uncertainties

In conducting the assessment, the Directors have

considered the principal risks outlined so as to determine

the impact on the ﬁnancial position and performance of

the Group. These risks have been identiﬁed by the Board,

and are actively monitored on an ongoing basis, the most

signiﬁcant of which are considered in more detail below:

1. Macroeconomic environment, including a more

protracted global economic downturn (following the

global pandemic and/or ongoing hostilities in Ukraine),

could impact negatively on our ability to continue to

grow and invest as a business. In addition, increased

trading levels and uncertain market conditions can

lead to higher debtor balances, raising our exposure

tocustomer failure and bad debt write downs

2. Supply chain challenges. The Group sources products

both internally and externally for customers around

the world. If we were unable to supply a customer in

line with their ongoing manufacturing requirements,

the risk both to our reputation and in terms of

potential stoppage penalties could be substantial.

Ourcustomers’ manufacturing volumes are also

dependent on the uninterrupted supply of other

component parts, e.g. semi-conductors, meaning that

trading levels can be impacted by factors outside of

our control. Ongoing supply shortages are also creating

inﬂationary pressures, which risk reducing the Group’s

proﬁtability if we are not able to appropriately pass

these through to customers

3. Cyber risk. A signiﬁcant cyberattack, or data security

breach, could incur penalties and have a serious impact

on the Group’s ability to trade in the short term, with

longer-term negative implications to our reputation in

the marketplace and therefore our ability to meet our

growth targets in the medium term

Speciﬁc scenario modelling undertaken

Impact Related principal risk

1. Reduced volume/loss

of a key customer (up to

33% reduction of speciﬁc

revenue stream)

Macroeconomic

environment

2. Impact of extended

component shortages

(e.g. semi-conductor

chips) (reduced speciﬁc

sector recoveries of up

to 33%)

Supply chain challenges

3. Slower pass-through

ofcost inﬂation into sales

prices (pass-through

restricted to 50%)

Macroeconomic

environment/supply chain

challenges

4. Increased

irrecoverable air freight

costs (100% year-on-year

increase)

Supply chain challenges

5. Likely impact of

a cyberattack/data

security breach

Cyber risk

The scenarios above are hypothetical and purposefully

severe for the purpose of creating outcomes that

have the ability to threaten the viability of the Group.

It is considered unlikely, but not impossible, that the

crystallisation of a single risk would test the future

viability of the Group. However, as with many companies,

it is possible to construct scenarios where either multiple

occurrences of the same risk, or single occurrences of

dierent risks, could put pressure on the Group’s ability to

meet its ﬁnancial covenants. In the case of these scenarios

arising, various options are available to the Group in order

to maintain liquidity so as to continue in operation, such

as accessing new external funding early, more radical

short-term cost reduction actions and reducing capital

expenditure. None of these actions are assumed in our

current scenario modelling.

Conclusion

After considering the risks identiﬁed and on the basis

ofthe assessments completed, the Directors believe that

there is a reasonable expectation that the Company will

be able to continue to operate and meet its liabilities as

they fall due over the next three years.

Strategic report

66 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

Sustainability

The Board acknowledges that there is a legal requirement

for the Company to report on how the Boardand its

Committees have considered the requirements ofSection

172 of the Companies Act 2006in their decision-making

Stakeholders

Section 172 statement

Businesses do not operate in isolation. Without a good

understanding of who the key stakeholders are and how

they impact upon and are impacted by their organisation,

a business will fail to deliver sustainable value to

shareholders and other stakeholders.

The Board considers its key stakeholders to be its people,

investors, customers, suppliers, the communities in which

we operate, as well as regulators and governments. We

actively engage with our key stakeholders to understand

their views and build eective relationships, and our

engagement approach for each stakeholder group

issetout on the following pages.

In addition to having regard to stakeholder considerations,

the Board acknowledges its responsibility to consider

long-term impacts and the Company’s impact both upon

and from wider society and the environment.

The Board delegates day-to-day management,

riskanddecision-making to its Operational Executive

Board (OEB), but it maintains oversight of the Company’s

performance, and reserves to itself speciﬁc matters for

approval, including the strategic direction of the Group,

acquisitions and disposals, and entering into material

contracts and purchase of ﬁxed assets above set limits.

The Board monitors performance against strategy, and

that decision-making is appropriate, by receiving regular

updates, both in Board and Committee meetings and

through monthly Board reports from the CEO, CFO, OEB

members and other senior managers, all of which enable

it to make well-informed decisions for the long-term

success of the Company and its various stakeholders.

To aid eective decision-making, the Directors and the

Senior Management team take into account the Group’s

policies, including the Group Code of Conduct and

supporting corporate policies set out on page 89.

Section 172(1) Companies Act 2006 ‘Duty to

promote the success of the company’

1) A director of a company must act in the way he

considers, in good faith, would be most likely to

promote the success of the company for the beneﬁt

of its members as a whole, and in doing so have

regard (amongst other matters) to:

a) the likely consequences of any decision in the

long term;

b) the interests of the company’s employees;

c) the need to foster the company’s business

relationships with suppliers, customers

andothers;

d) the impact of the company’s operations on the

community and the environment;

e) the desirability of the company maintaining

a reputation for high standards of business

conduct; and

f) the need to act fairly as between members of

thecompany

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 67

Governance Financial statements Additional information

Principal decisions

We deﬁne principal decisions as both those that are

material to the Group, but also those that are signiﬁcant

to any of our key stakeholder groups.

In making the following principal decisions, the Board

considered the outcome from its stakeholder engagement

as well as the need to maintain a reputation for high

standards of business conduct and the need to act

fairlybetween the members of the Company:

Capital allocation to deliver strategy

During the year, the Board, OEB and other senior

managers met to discuss the Group’s medium-term

strategic roadmap approved during FY2021. As set

out on page 02, the Group’s core strategy includes

delivering both organic and acquisitional growth. A key

consideration for the long-term success of the business

was the appropriate allocation of capital to deliver the

strategy.

Further to the approval of the annual budgets, the Board

discussed and updated the Group’s acquisition criteria to

ensure they are still relevant and approve next steps when

key stage gates have been achieved.

The Board was pleased to announce the acquisition of

North American specialist fastenings distributor, Falcon

Fastening Solutions Inc on 31 August 2021, as the ﬁrst step

on the Group’s acquisition-led North America expansion

strategy. The acquisition will extend Trifast’s global OEM

customer base and presence in non-automotive focus

sectors as well as opening up growth opportunities with

its global customers in key target states. All employees,

including Falcon’s President, Giovanni Cespedes,

remained with the business. More details can be

foundonpages 36 and 37.

During FY2022 the Board approved investment in

newlarger premises to facilitate future growth for two

of our fast-growing sites. We are pleased to report that

the ﬁrst of these sites, TR Hungary, has now opened its

new purpose built sustainable building, and plans for

the second site are progressing well. Employees have

been engaged throughout the process with the impact

on individuals being considered by the Board, with

both newpremises only being a short distance from the

existing sites it was felt that any negative impact would

below, and the better facilities would be welcomed.

Covid-19 response

The pandemic has had a dramatic impact over the last

couple of years and has remained a consideration for the

Board. The safety and wellbeing of the workforce and the

continuation of the Group’s operations and supply chain

have been the main concerns.

The Board enacted the business continuity plan and

introduced new working practices to limit the risk to

our teams. This entailed the transition to home working

and the implementation of Covid-19 secure workplace

practices for all sites.

Employee wellbeing

Employee mental health has been a particular area

of focus over the last couple of years. During FY2022

weimplemented our Employee Assistance Programme

– LifeWorks. This platform is now available to all

global employees, oering 24/7 mental health and

wellbeing support. Full details can be found in our

sustainabilityreport.

Russia/Ukraine

As a Group, we operate with a limited number of

customers in Russia and Ukraine (less than 1% of Group

revenue) and therefore the direct impact of the conﬂict

has been minimal. Our Group sanctions policy has been

designed to ensure that we remain compliant with any

requirements and we have taken independent legal advice

as appropriate.

Strategic report

68 Trifast plcAnnual Report for the year ended 31 March 2022

Strategic report

People

Key metrics

• Employee voluntary turnover rate

• Employee engagement survey score

• Total employee pay and beneﬁts inﬂation against

industrybenchmark

Why it’s important to engage

The Company’s long-term success depends on a skilled

andmotivated workforce, an innovative and entrepreneurial

approach, and a safe and inclusive working environment

Key topics

• Feeling valued and engaged in the business

• A safe and healthy working environment

• Training and professional development

• Desire to have a positive impact

• Fair pay, beneﬁts and treatment

• Diversity and inclusion

How we engage

We engage with our workforce to co-create a supportive

working environment that fosters professional development

and employee wellbeing, and that also aligns our sta with our

strategic goals and culture, driving innovation and productivity

The Board has decided that one aspect of our approach to

engage with our sta is through a designated Non-Executive

Director for sta engagement, our Chair Jonathan Shearman.

He is supported by Claire Balmforth (NED and Remuneration

Committee Chair) and Global HR and Sustainability Director

Helen Toole

We conduct employee culture surveys twice a year as part

ofaprogramme. We also operate an ongoing employee voice

24/7 survey. The Board discussed the ﬁndings and incorporated

sta feedback into our refresh of Company values and culture

this year

We have typically rotated the location of Board meetings so

that sta have a chance to meet with Board members. Although

the pandemic has prevented site visits from happening over

the last two years, since the relaxation of rules, Board and

Committee meetings have once again been held at our Head

Oce and the plan is to return to holding meetings at other

locations. In addition to Board visits, Jonathan Shearman, Chair,

has instigated a regular employee engagement programme

aimed at interacting with sta across our locations

We hold regular events including sta inductions, leadership

brieﬁngs and regular communications. We also communicate

with sta through our intranet and sta newsletters and

provide regular, structured performance reviews for sta.

Where sta are members of unions, engagement is conducted

at the site level

Engagement in FY2022

As part of the employee engagement programme, and following the lifting of many Covid-19 restrictions in the UK,

JonathanShearman (designated NED) completed three on-site sessions where employees were encouraged to speak

openlywithhim

In addition, Jonathan was joined by our Senior Independent Non-Executive Director Clive Watson for the visits to our site in the

North East of England, with additional visits planned for FY2023

Full culture surveys were carried out in both April and November 2021

The LifeWorks Employee Assistance Programme was rolled out in February 2022 to all sites globally, providing health and

wellbeing support

The Board and Nomination Committee have continued to receive updates on talent and succession plans; further details can be

found on pages 101 to 103

Sustainability continued

Stakeholders continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 69

Governance Financial statements Additional information

Investors

Key metrics

• Earnings per share

• Cash conversion

• Total shareholder return

• ESG ratings

Why it’s important to engage

Continued access to capital is important to the long-term

success of our business. We ensure that we provide fair,

balanced and understandable information to investors and

analysts to ensure they have a clear understanding of our

strategy, performance, culture and ambition. In addition,

understanding the views of our shareholders helps us

underpinthe direction we take

Key topics

• Share price performance

• Year-on-year results improvements and medium-term

aspirations

• No prosecutions or negative press

• Sustainable business model for the future

How we engage

We operate a structured programme through the year to

engage with equity investors and analysts. We seek to obtain

support for our strategic objectives and our approach to

executing them

The key mechanisms of engagement include:

• Annual General Meetings

• Investor presentations and roadshows

• One-on-one meetings with relevant information being

distributed to all investors through:

• Regulatory news releases

• Corporate website

• Annual reports

• Investors ESG questionnaires

• Private clients via the Investor Meet Company platform

Feedback from formal investor engagement is reported to

theBoard and used to inform the approach for future events

and consultations

Engagement in FY2022

Over the last ﬁnancial year, we have operated a structured programme, albeit virtually, in the form of presentations with

conference dial-in facilities, which were open to all of the investment community. In addition, we introduced the Investor Meet

Company oering which allowed private investors to listen to, and enter dialogue with, management. These recordings are also

available on our website www.trifast.com.

Annual results

Our annual results were presented by our CEO and CFO on a virtual third-party hosted platform. This enabled analysts,

shareholders, banks and other stakeholders to raise any questions. Subsequent individual investor meetings were held in

thefollowing weeks by our CEO and CFO

Annual General Meeting

The AGM presents an opportunity for shareholders to question the Directors about our activities and prospects. The 2021

AGMwas held in July as a hybrid meeting for the ﬁrst time. Shareholders were able to choose to attend in person or via a

virtualthird-party hosted platform which also enabled shareholders to vote and ask questions. All resolutions were passed

Half-year results

The interim results were announced on 23 November 2021

As with the year-end results, our CEO and CFO presented the interim results roadshow via a virtual third-party hosted platform.

This enabled analysts, shareholders, banks and other stakeholders to raise any questions. Subsequent individual investor meetings

were held in the following weeks by our CEO and CFO

Investor feedback

All formal feedback received from the investor perception audit undertaken in the year and both the interim and preliminary

investor roadshows was shared with the Board and discussed

Strategic report

70 Trifast plcAnnual Report for the year ended 31 March 2022

Sustainability continued

Strategic report

Customers

Key metrics

• Orders

• Pipeline value

• Sales conversion rate

• Business reviews and feedback

• Sustainability scores – fulﬁlling customers’ objectives

• Number of customers by region

• Number of traded parts

Why it’s important to engage

Understanding our customers’ needs and behaviours allows us

to deliver relevant products and services, retain customers and

attract new ones. It also identiﬁes opportunities for growth and

market dierentiation. Customers have increasing sustainability

expectations and obligations; engaging with them helps us to

demonstrate how we deliver on these

We engage with our customers to build strong, trusting

relationships that generate mutual value. We are seeing

increased demand to advise on our status on this subject

Key topics

• Product performance and eciency

• Innovation and collaboration in problem solving

• Safety, quality and reliability

• Competitiveness

• Our environmental and social practices

• Our availability and responsiveness

• Building relationships with deeper involvement

• Compliance

• Being a ﬂexible supplier

• Our range of products

• Agility of supply chain solutions

How we engage

Trifast prides itself on its long-standing partnerships with all

its customers. We work closely with our customers to provide

technical and logistics input, often developing innovative

solutions that meet the needs for emerging technologies

andlegislation

We engage with our customers through a wide range of online

platforms including digital marketing, social media and through

our websites www.trifast.com/www.trfastenings.com

We have developed virtual training support to help customers

understand our range of products and to select the right

fastener for each application. This includes a video library

for speciﬁc products and industries. Since the launch of our

product installation animations on the TR Fastenings website

inNovember 2019, there have been over 33,000 views

We also complete customers’ questionnaires on environmental

and social practices and performance, including the exacting

requirements of SAQ.4 (automotive), JOSCAR (aerospace and

defence) and the enhanced requirements of EcoVadis and CDP

supply chain questionnaires

The Board has delegated responsibility for managing customer

relationships to the OEB and receives updates on key issues

throughout the year

Engagement in FY2022

• Presentations

• Virtual sales and logistics presentations

• Virtual and in-person quarterly business reviews (QBRs) with major accounts

• Completion of online sustainability questionnaires within portals

• Maintaining customers’ key data requirements including ﬁnancials

• Engineering workshops (virtual and in-person), ‘lunch and learn’ events and technical reviews

• Timeline discussions on changing legislation and new business introduction

• Product availability and oering alternative solutions

Stakeholders continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 71

Governance Financial statements Additional information

Suppliers

Key metrics

• Robust vendor selection process

• Meeting commercial terms

• Supplier scorecards

• Quality and sustainability agreement acceptance

• Spend as a % of total spend for preferred supplier

grouping(AVL)

• Total number of suppliers

• Regional spend vs. imported spend

Why it’s important to engage

Engaging with our suppliers builds strong relationships,

ensuring appropriate cost and quality levels of goods and

services, quality, security of supply and speed to market.

We rely on the high standards of our suppliers to ensure

compliance, drive innovation and deliver improvements

inouroverall sustainability performance

Key topics

• Fair treatment and on-time payments

• Quality and sustainability management

• Total cost of acquisition

• Compliance with local legal requirements, including

modernslavery

• Building long-term relationships

• Responsible procurement, trust and ethics

• Shared technological advances and innovation

How we engage

The Board has established a Supplier Code of Conduct

whichcovers quality, sustainability and compliance criteria.

Weexpect all approved suppliers to sign up to this Code

We conduct in-person and virtual supplier meetings and

conferences on speciﬁc issues, including compliance, quality

and eciency. This includes the Modern Slavery Act, GDPR

andESG as a broad subject

We conduct audits and regular performance reviews of our key

suppliers utilising our SQE (Supplier Quality Engineers) globally

Engagement in FY2022

Constant contact and reviews with suppliers

Managing the supply situation was critical as lead times increased, freight routes became congested, legislation drove EU

anti-dumping duties for speciﬁc products and Covid-19 continued to impact the world

We conducted supplier audits both physically and remotely, taking into account local Covid-19 regulations

During the year, we have continued to engage with suppliers on recent and new legislation, while building a near-shoring supply

chain capacity and competence in the Americas and Eastern Europe through face-to-face reviews, audits and the awarding of

new business

Strategic report

72 Trifast plcAnnual Report for the year ended 31 March 2022

Community

Key metrics

• Charitable donations

• Number of activities

Why it’s important to engage

Trifast has the capacity to create signiﬁcant positive beneﬁts

within the communities we operate in, but recognises our

operations can also have a negative impact. We are committed

to engaging with our communities to ensure we interact

responsibly and maximise potential beneﬁts

Key topics

• Fair treatment

• Good environmental management, especially minimising

noise and nuisance

• Support for community organisations and initiatives

• Jobs and economic beneﬁts

How we engage

We have good relationships with our neighbours and

conductregular reviews at each site to ensure we avoid

causingnuisance from noise, dust, light and waste

controlissues

Community communication and complaints are managed by

our ISO 14001 environmental management system

Our supply chain includes a large number of small and specialist

suppliers. We are keen to support small businesses in our

industry and the local economies in which we operate, and so

we engage with smaller suppliers where needed to build skills

and knowledge, especially in relation to compliance, eciency

and quality

We encourage sta to undertake fundraising to support local

good causes and will be introducing an employee volunteering

policy in the coming year

Engagement in FY2022

Trifast is committed to supporting and sponsoring various events and activities within the communities local to each of

ourlocations

For more information on stories that have happened in FY2022, refer to our community on pages 80 and 81

Sustainability continued

Strategic report

Stakeholders continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 73

Regulators/governments

Key metrics

• Compliance performance

Why it’s important to engage

Policies and regulatory changes, including changes to the

global political landscape and laws and regulations aecting

terms of trade, may provide opportunities and pose risk to

ouroperations

Key topics

• Ongoing regulatory compliance

• Third-party audit scores

• Brexit

How we engage

We primarily engage with regulators through public disclosures

(including the Annual Report and AGM) and speciﬁc

submissions (such as those relating to packaging and controlled

materials within our products)

Where necessary, we actively engage with government

departments, such as the Department of Trade and Industry

inrelation to Brexit

Engagement in FY2022

During the course of the year we continued to make all necessary compliance declarations and submissions. This includes market

announcements as well as compliance disclosures related to packaging materials, greenhouse gas emissions, and controlled

materials within our products (including SCIP, RoHS and REACH)

This year saw the introduction of the requirement for the Company to report on Task Force on Climate-related Financial

Disclosures (TCFD) – for full details, please see pages 86 to 88

Sanction reviews in relation to Russia/Ukraine

Governance Financial statements Additional information

Strategic report

74 Trifast plcAnnual Report for the year ended 31 March 2022

Sustainability continued

Our people

Introduction

At Trifast, we pride ourselves on being a people-centred

business and we are focused on being a responsible and

responsive employer. We promote an environment that

is safe and fair, which motivates, develops and maximises

the contribution and potential of all employees, wherever

they work for us.

It remains really important for us to attract and retain

the best people. This has become increasingly important

in the current macroenvironment and the challenges it

poses. We have continued to roll out our HR system (D365

Human Resources) globally and all sites are now live and

using the system as of July 2022. This has allowed much

more ecient and eective reporting and an increased

ability to be able to resolve any emerging themes more

quickly and easily. The new system allows employees to

engage in a comprehensive performance review process

incorporating a skills analysis which in turn feeds into our

ongoing training needs analysis process.

We are committed to looking after our people. We have

excellent health, safety and employee wellbeing practices

in place, all of which have been enhanced this year

through the successful roll-out of new systems. We have a

new environment, health and safety management system

and in February 2022 we launched a new Employee

Assistance Programme (EAP) globally. The EAP system

allows access to a wide range of wellbeing support

tools to all our employees in the language that is most

appropriate for them. We continue to oer our employees

competitive beneﬁts, and engage with our workforce on

an ongoing basis.

Policies

Our sustainability practices are governed by our

comprehensive Corporate Code of Conduct which sets

out our vision, mission and core values, alongside the

policies that ensure ethical business practices. The Code

of Conduct is supported by a suite of corporate policies

and guidance:

• Business Ethics and Responsible Behaviour Policy

• Anti-Bribery Statement and Policy

• Modern Slavery Statement

• Environmental Policy

• Health and Safety Policy

• Product Quality Procedures

• Equal Opportunities Policy

• Equal Pay Policy

• Dignity at Work Policy

• Whistleblowing Policy

• Charitable and Political Donations Policy

• Fair Competition and Anti-Trust Policy

• Freedom of Association and Collective

BargainingPolicy

• Working Conditions and Human Rights Policy

• Sanctions Policy

We expect all our employees to understand and comply

with these policies and the Code of Conduct also helps

our customers, suppliers and distributors around the

world understand our requirement for them to observe

allrelevant laws and regulations.

Adherence to the policies within the Code are audited

aspart of the Group HR audit process.

Our approach

Global HR strategy

The HR strategy is on track, with many of our strategic

projects either completed or nearing completion. Now

that all of our people information is in one system, we are

able to monitor our global HR KPIs more easily and react

appropriately in a timely manner.

The culture of our business is important to us and we

continue to work on ways to further embed our values

within our workplaces, both in how we interact with each

other and with our wider stakeholder groups.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 75

Governance Financial statements Additional information

Employee engagement

We have continued our cultural survey programme

with two full cultural surveys – one in November 2021

and the other in April 2022. The results have remained

encouragingly stable and each location and department

head has received the breakdown of the results for their

team, with suggested actions to improve any low scores.

Our ‘Employee Voice’ anonymous survey programme

continues to provide all employees with the opportunity

to contact us 24/7 365 days per year to tell us how they

feel and why they feel that way. The Employee Voice

system is regularly monitored so that we can act swiftly

and appropriately.

Our ongoing programme of surveys will see regular

engagement with our employees on a number of thematic

topics to ensure that we are focusing our activity in the

areas that will make a real dierence to the working lives

of our employees. This, in turn, will aid the retention

of our people. This includes keeping under review our

performance based component to our pay structures

and our non-compensation beneﬁts including pension

and retirement, which will be relevant to the country of

employment.

The Designated NED for sta engagement, who is also our

Chair, undertakes regular visits to our sites to engage with

our employees. This gives our employees the opportunity

to have an open dialogue about things that might be

aecting them at work. On a number of visits, the Chair

is accompanied by other Non-Executive Directors. This is

seen as a very positive step and during location visits has

been very well received by our employees. Anonymised

feedback is then given to the Group HR team so that the

appropriate actions can be putin place. This process will

continue during FY2023.

Succession planning

We are continuing to develop our succession

planning process. This allows us to identify senior and

business-critical roles and ensure that we have plans in

place to mitigate any risks associated with these roles.

Wehave been able to identify whether these positions

have an immediate internal successor, whetheran

individual within the business would be able to take

the role with further development, or whether an

external recruitment process would need to take place.

Thetraining and development needs identiﬁed during

thisprocess are being used to build out our global

training strategy.

Training and development

Talent management is a key driver of our success,

and our learning and development programme is

crucial to upskilling our people, retaining top talent

and attracting new candidates in an increasingly

competitive marketplace. We are totally committed to

the development of all our employees across the globe,

oering them formal and informal learning, as well as the

opportunity to gain industry-recognised qualiﬁcations.

Our online training system has provided us with the

chance to roll out relevant training to all our employees

in their own chosen language. Within the last year we

have recruited a new Global Training and Development

Manager, Karin Manning (as pictured bottom left) who

has been instrumental in developing our new Learning

Management System. This system oers an individualised

learning plan that is tailored to an employee’s role.

Thesystem uses artiﬁcial intelligence (AI) to aggregate

personalised content, allowing employees to identify

which skills they might need to develop to enhance their

career. Within this system there is also a social learning

platform which fosters an informal approach; encouraging

a collaborative workspace where subject matter experts

can answer questions, share best practice and exchange

ideas across our global network.

We have also implemented a new induction programme,

allowing the business to interact more easily with new

recruits before they start their role. This system includes

introductory videos and messages as well as checklists for

managers to ensure that all new employees have the best

possible start.

Within the UK we are making great use of our

Apprenticeship Levy funds, with eight employees

currently undertaking apprenticeships that will provide

them with professional qualiﬁcations – a further example

of our desire to provide our employees with meaningful

development opportunities.

Strategic report

76 Trifast plcAnnual Report for the year ended 31 March 2022

Sustainability continued

Our approach continued

STEM careers

We are committed to playing our part in widening

engagement in STEM subjects through our partnerships

with schools and universities. These partnerships provide

us with the opportunity to educate young people through

talks and interactive presentations about what it is like

to be part of a global engineering and manufacturing

business. The links with the universities aord us access

to students on placements who can join us to assist with

speciﬁc projects but also provide access to graduates

who would be interested in working within our industry.

We are committed to increasing our STEM activity and are

increasing our connection with schools and universities in

this regard.

Early career support, student opportunities

andapprenticeships

We remain dedicated to providing opportunities for

young people to understand how a global organisation

operates. We hope to have university placement students

again in the coming year.

Both Helen Toole, Global HR and Sustainability Director,

and Warren Dipper, Group HR Manager, continue as

Enterprise Advisers, providing a connection between

schools and the local business community.

We are proud that we continue to provide apprenticeships

throughout our locations.

Health, safety and wellbeing

The wellbeing of employees is paramount. This includes

not only their physical health but also their mental health.

We operate an eective health and safety management

system across all our operations, with a focus on risk

management and prevention. We manage health and

safety issues alongside environmental issues within an

integrated environment, health and safety (EHS) system.

Health and safety

Our CEO has overall responsibility for health and safety

and is supported by the new EHS business partners. This

Business Partner network has been set up to allow best

practice to be shared across the Group.

Our key areas of risk are:

• Musculoskeletal injury related to both moving and

handling, and sedentary roles within our workforce

• Inherent risks associated with working with heavy

dutymachinery

Through our Health and Safety Policy, Trifast commits to:

• Provide safe and healthy working conditions which aim

for the prevention of work-related injury or ill health

• Eliminate hazards, so far as is reasonably practicable,

and reduce occupational health and safety risks

• Conduct its activities in full knowledge of, and in

compliance with, the requirements of applicable

legislation, approved Codes of Practice and other

requirements agreed by top management

We are working towards gaining formal recognition

of our health and safety management approach by

achieving certiﬁcation to ISO 45001. To aid us with

the accreditation, the EHS system will assist us in the

eective management of incidents, risk assessments,

non-conformity management and strengthening our

auditing methods.

Mental health

A number of managers have been trained in mental health

awareness and we have introduced our ﬁrst mental health

ﬁrst aiders.

Human and labour rights

Trifast recognises human rights as set out in the Universal

Declaration of Human Rights and enshrined in EU and UK

law through the European Convention on Human Rights

and the Human Rights Act 1998. Our workplace practices

are governed by our Corporate Code of Conduct, our

HR policies, and our Business Ethics and Responsible

Behaviour Policy, which commits Trifast to the highest

standards in human and labour rights, employee conduct

and compliance with all applicable legislation. It also sets

out our commitment to ensuring employees have the

freedom to associate or collectively bargain without fear

of discrimination against the exercise of such freedoms.

Our people continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 77

Governance Financial statements Additional information

Modern slavery

We comply with the requirements of the UK Modern

Slavery Act 2015 and the California Transparency in

Supply Chains Act 2010.

Our suppliers are expected to meet the same standard on

labour and human rights with no forced or inappropriate

child labour, safe working conditions, reasonable working

hours, freedom of association, and wages that comply

with minimum wage legislation in the appropriate

jurisdiction. We require slavery and human tracking

to be eradicated from our direct supply chain for the

products we sell. Trifast’s full statement on modern

slavery and human tracking can be found on the

Company’s website at www.trifast.com.

We monitor suppliers by performing regular assessments

to assure ourselves of each supplier’s commitment in

this area. Given our supply chain includes a wide range

of manufacturing activities across a number of emerging

economies, the business ethics of suppliers are assessed

as part of the procurement process and through

siteaudits.

Training on modern slavery is provided to all members of

sta who work in our supply chain function.

Bribery and corruption

We have a zero-tolerance approach to all forms of bribery

and corruption. Trifast plc is bound by the laws of the UK,

including the Bribery Act 2010, in respect of its conduct

both at home and abroad. In addition, we will uphold

all laws relevant to countering bribery and corruption

in all jurisdictions in which we operate, including the US

Foreign Corrupt Practices Act.

Anti-bribery training will be included in our new online

training provision and we will determine the employees

who will be required to receive it.

Whistleblowing

All employees are aware of the global Whistleblowing

Hotline that is available to them in their own language.

The hotline is hosted by a third-party company and

is available for employees to anonymously report any

activity or behaviour that they do not feel is appropriate.

Every eort is made to protect the conﬁdentiality of

those who raise concerns and employees may come

forward without fear for their position. During the year

being reported and up to the date of this publication,

noreportshave been submitted to the hotline.

Diversity and inclusion

We are, as a global business, committed to treating

everyone fairly and we recognise the strengths that a

diverse workforce can bring. As an organisation we make

every eort to eliminate discrimination, create equal

opportunities and develop good working relationships

between our teams. Our people represent a mix of

cultures spanning 34 locations in 18 countries and this

provides us with many opportunities to understand and

value those cultures.

We are working on an updated diversity and inclusion

strategy that will positively help to increase employee

satisfaction and engagement, overall creativity and a sense

of belonging. We will be taking targeted action, across

our locations in all countries, to ensure that all legislative

requirements are met and that as a business we go beyond

our legal obligations to further build an environment that is

totally inclusive.

The engineering sector faces a considerable challenge on

diversity, especially in relation to attracting women into

technical roles. According to the Women’s Engineering

Society, only around 14.5% of engineers in the UK are

women and only a quarter of girls aged 16-18 would

consider a career in engineering, compared to more

thanhalf of boys.

Through our work on STEM initiatives with schools and

programmes to support young people to get experience

inengineering, we are making concerted eorts to address

these challenges.

As part of our sustainability strategy review in

FY2023,wewill review our performance and practices

on diversity and inclusion, further develop our diversity

and inclusion strategy and identify opportunities to make

furtherimprovements.

Strategic report

78 Trifast plcAnnual Report for the year ended 31 March 2022

Our people continued

Diversity and inclusion continued

Gender pay gap

The Equality Act 2010 (Gender Pay Gap Information)

Regulations 2017 brought into eect a requirement

for large UK employers, such as our largest UK trading

subsidiary, TR Fastenings Ltd, to report publicly each year

on the dierences in the aggregate pay and bonuses for

men and women.

The Regulations mandate how organisations in England,

Scotland and Wales with 250 or more employees must

calculate a standard set of key metrics on their gender

pay and gender bonus gaps and the format and medium

in which they must report them.

Our gender pay reporting continues to provide reassuring

data that supports our reward and recruitment strategies.

The full gender pay gap statement for the reporting

period is included below.

In brief

The table below shows our overall median and mean

gender pay and bonus gap based on hourly rates of pay

and bonuses paid, as at the snapshot date 5 April 2021.

Pay and bonuses

(female compared to male)

Median Mean

Hourly pay +7.0% -3.0%

Bonus pay 0.0% +6.0%

The table shows that based on a median average,

our female employees are paid 7.0% more than our

male employees. The mean average displays our male

employees as being 3.0% higher paid than our female

employees. This result represents a change in the mean

average from -3.9% in FY2020 and the median average

is now +7.0% compared to +3.9% in favour of female

employees from FY2020.

These results compare very favourably when compared

with the national average of male employees being paid

15.4% more than female employees. Note that interpreting

average earnings data is dicult currently, due to how

Covid-19 has impacted the average weekly earnings data,

including furlough, etc, which explains the complexities

of interpreting earnings data in the current climate. This

means that comparisons with 2020 need to be treated

with caution, and the focus needs to be on longer-term

trends rather than year-on-year changes.

The bonus dierence mean ﬁgure in the table highlights

a 6% dierence in favour of female employees; this was

-10.5% in FY2020.

Gender diversity

Male | 67%

Female | 33%

Male | 70%

Female | 30%

Male | 77%

Female | 23%

Male | 69%

Female | 31%

874

386

Sustainability continued

Board OEB

Entity

Directors &

Senior

Managers

All

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 79

Proportion of colleagues awarded a bonus in FY2021

Received a

bonus | 94%

Did not receive a

bonus | 6%

Received a

bonus | 95%

Did not receive a

bonus | 5%

These charts illustrate that the number of men and women paid a bonus are primarily in line. As a Company we

continue to reward all our employees. The only reason the statistics do not show 100% is due to eligibility criteria

based on start and ﬁnish dates of employees.

Quartiles

The following charts illustrate the construction of each quartile.

Male | 84%

Female | 16%

Male | 63%

Female | 37%

Male | 55%

Female | 45%

Male | 73%

Female | 27%

This is our ﬁfth year of reporting and we continue to see improved results, and parity across the UK business. All of our

decisions about recruitment, promotion, training and development are made within our framework ofequality. Going

forward, we will continue to ensure that all our employees reﬂect our Company values.

TR Fastenings, as with all of the entities within the Trifast Group, demonstrates its absolute commitment to all aspects

of equality and fairness in the workplace.

Diversity on our Board

Two women serve on our Board of six (33% female representation).

Read more about diversity on our Board in

the Sustainability Report

Lower

quartile

Lower middle

quartile

Upper middle

quartile

Upper

quartile

Proportion of

males

who received

a bonus

Proportion of

females

who received

a bonus

Strategic report

80 Trifast plcAnnual Report for the year ended 31 March 2022

Sta at TR’s West Midlands

location show their continued

support and donate to

multiple charities at Christmas

The team raised an impressive

total of £430; £210 was donated

toThe Salvation Army and £220 to

the local Black Country Foodbank,

who issue food vouchers to local

organisations that encounter

people in hardship

TR Scotland support East

Kilbride Football Club

TR North East sponsor

Whickham Fellside YFC Girls

Under 13 & 14s football teams

for the 2021/22 season

The semi-professional team

currently playing in the Scottish

Lowland Football League (SLFL),

in their short history, has won

the SLFL title twice and reached

the last 16 in the 2016 Scottish

Cup before losing narrowly to

themighty Celtic FC

The club has 33 teams playing

in distinctive yellow and green

colours, from Under 7s to Under

23s. They also have a development

group for boys aged 5-7 and a

wildcats group for girls aged 6

andupwards

Sustainability continued

Strategic report

Our community

As a responsible employer, we are very

proud of the interactions that we have

with the communities in which we operate

across the world. Our teams are always

keen to help where possible, either through

sponsorship, providing time and support,

orcarrying outfundraising activities

Helen Toole

Global HR and Sustainability Director

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 81

‘Tee-riﬁc’ support from TR

Fastenings Ireland!

TR’s head oce donates to

local hospices

TR Fastenings Inc. donate to

Toys for Tots at Christmas

Dara Horgan, Entity Director,

and Chuck Crowley, Business

Development Manager, from TR’s

Cork location attended the annual

Ballygarvan Camogie Club Golf

Classic at Raeen Creek Golf Club,

for the fourth year running

TR Uckﬁeld donated money in

March 2021 to the St Peter and

StJames Hospice and St Wilfrid’s

Hospice. This was to assist them

with much-needed funding during

dicult times

The TR team in the USA once

again had a toy drive for the

winter holidays, and employees

participated by donating a

range of toys. Established

in1947, Toys for Tots collects

newtoys to be distributed to

the less fortunate at Christmas.

The charity has distributed an

incredible 627milliontoys to date,

supporting281 million children

TR Scotland provide

ongoingsupport to

theKilbryde Hospice

TR PSEP continues support

of environment campaign

collection in Malaysia

Continued support

forlocalteam, Uckﬁeld

Grasshoppers JFC

Kilbryde Hospice is a voluntary

independent hospice which

exists to provide compassionate,

specialist palliative care to people

with life-limiting progressive

illnesses and to their relatives and

carers. TR Scotland includes an

advert in the annual Light up a Life

order of service, a remembrance

service where anyone who has lost

a loved one can come together

In December 2021 and

January2022, TR PSEP in Malaysia

collected a range of recyclable

materials including glass and

plastic bottles, tins and cans,

used books, paper and cardboard

to be donated to the campaign.

Allmaterial is given to XPM

Welfare Society Malaysia which

sells the items to raise money for

people in need

TR is proud to continue

itssponsorship of Uckﬁeld

Grasshoppers JFC. The club

was set up in 1981 by a group of

local parents, since when it has

grown into a club with over 250

registered members oering boys

and girls football from ﬁve years

old all the way to under 18s

Governance Financial statements Additional information

Strategic report

82 Trifast plcAnnual Report for the year ended 31 March 2022

Sustainability continued

We actively manage environmental issues through our

ISO14001 certiﬁed environmental management system.

Our approach seeks to reduce the direct impacts from

our own operations as well as across the life cycle of

ourproducts.

We work closely with our customers to deliver innovation

that reduces environmental impact and accelerates

electric vehicles and renewable energy. We are pleased

toreport that there have been no environmental incidents

during FY2022.

ESOS

The Company is required to comply with the Energy

Savings Opportunities Scheme (ESOS); we have had

assessments completed by competent third parties

on our business premises, to meet our

ESOSrequirements.

We are now assessing the recommendations from

those reports to best align them with our upcoming

sustainability roadmap.

Carbon emissions

Trifast is committed to acting to combat climate change

and reporting on its approach and performance. For

FY2022 we have utilised the Carbon Trust “Footprint

Manager” software for the ﬁrst time, to streamline our

reporting process. Our total carbon emissions have

increased from FY2021, however in comparison with

our turnover they have reduced from 33.34 kg CO

per£1,000 turnover to 31.69 kg CO

e per £1,000.

Our main area of energy use is within our manufacturing

facilities, followed by fuel use for distribution. Last year

we began to look at our scope 3 data and are pleased

to be able to report our scope 3 business travel data

forFY2022.

In line with our Sustainability strategy we will be setting

our net-zero strategy and emissions targets in FY2023.

We have continued to see increased requests from

customers on our carbon emissions and management

approach over this year. We have completed CDP

(supplier and investor) and EcoVadis submissions

duringFY2022 and will continue to do so annually.

Act on environment and climate change

Trifast is committed to good environmental management

across our operations and supply chain, and in the way

we design products

FY2022 FY2021

Total scope 1 emissions 1,958.49

1,761.44

Purchased fuels

1,322.17

1,269.90

Company vehicle use

636.32

491.54

Fugitive emissions

0.00

1.11

Total scope 2 emissions 4,722.32

4,498.65

Purchased electricity

4,722.32

4,498.65

Total scope 3 business travel 227.73

3.13

Air

202.92

3.13

Road

24.81

0.00

Total emissions 6,908.54

6,263.22

Fugitive emissions discounted from scope 1 footprint

Some numbers have been rounded up from decimals, actual total

tonnes CO

e for Trifast Plc is 6,908.54

For more information on our sustainability

KSIs, KPIs and water use, please see the

separate Sustainability Report2022

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 83

kgs CO

e per £1k turnover

FY2022

FY2021 % Change

Trifast plc +31.69

+33.34 -4.95

Asia

+77.30

+77.1 2 +0.23

USA

+3.66

+5.68 -35.56

Europe

+29.25

+28.71 +1.88

+13.96

+13.97 -0.07

Trifast plc

6,909 tonnes

(FY2021:

6,644 tonnes)

19,349,664 kWh

(FY2021:

18,565,372 kWh)

Total manufacturing

5,450 tonnes

(FY2021: 5,137 tonnes)

16,399,437 kWh

(FY2021: 15,171,888 kWh)

Asia manufacturing

3,405 tonnes

(FY2021: 3,202 tonnes)

6,832,099 kWh

(FY2021: 6,444,704 kWh)

Europe manufacturing

1,957 tonnes

(FY2021: 1,846 tonnes)

9,131,966 kWh

(FY2021: 8,313,338 kWh)

UK manufacturing

88 tonnes

(FY2021: 89 tonnes)

435,372 kWh

(FY2021: 413,846 kWh)

Total distribution

1,459 tonnes

(FY2021: 1,128 tonnes)

2,950,227 kWh

(FY2021: 3,393,484 kWh)

UK distribution

987 tonnes

(FY2021: 807 tonnes)

2,337,482 kWh

(FY2021: 2,461,598 kWh)

Asia distribution

69 tonnes

(FY2021: 40 tonnes)

14,781 kWh

(FY2021: 65,476 kWh)

Europe distribution

339 tonnes

(FY2021: 226 tonnes)

434,635 kWh

(FY2021: 734,958 kWh)

USA distribution

64 tonnes

(FY2021: 54 tonnes)

163,329 kWh

(FY2021: 131,451 kWh)

Note: Our emissions data includes all material emissions of the six Kyoto gases from direct sources and from purchased electricity,

heatand steam and cooling where applicable. No direct source material emissions have been omitted.

Figures are reported in tonnes of CO

e (carbon dioxide equivalent). Reports are calculated in the following ways:

• Tonnes of CO

e per FTE (full-time equivalent)

• Tonnes of CO

e per SQM (square metres of ﬂoor space occupied by the Company)

Our main source of emission factors is BEIS (2021), with other data selected to ﬁll gaps or because it is deemed to be more accurate.

IEA (2021) data is used for calculating emissions of non-UK, location-based electricity. For market-based electricity, a mix of AIB (2021),

BEIS (2021) and EPA (2021) are used to calculate emissions for the residual mix. Where there is no residual mix factors available, the

location-based factors from IEA are used.

Strategic report

84 Trifast plcAnnual Report for the year ended 31 March 2022

Sustainable supply chain

We actively manage and audit our key suppliers to

ensure high standards in environmental management,

social practices and corporate governance. This gives

usconﬁdence around compliance with legislation

and our quality and sustainability agreement, and

builds closeworking relationships that support

goodpracticeand innovation.

Our supply chain

Our goal is to help develop our key suppliers and improve

the current programme and processes; 85% of spend is

with 300 of our key suppliers.

The objective of our sustainable supply chain approach

is to ensure our products and suppliers comply

with high standards of environmental management,

social practices, corporate governance and business

ethics set out in legislation and our supplier quality

and sustainability agreement. We also aim to build

close working relationships with suppliers to reduce

the overallenvironmental impact of our products,

sharegoodpractice and drive innovation.

Sustainable supply chain approach

Our sustainable supply chain approach comprises

threekey themes. Our supplier quality and sustainability

agreement sets out our expectations for suppliers.

We review the practices and policies of prospective

key suppliers before we work with them and conduct

performance reviews and audits on an ongoing basis to

monitor compliance and foster a strong relationship that

drives improvement and innovation.

Standards

Pre-contract

review

Ongoing

management

1. Quality and

sustainability

agreement

2. Supplier

assessment

andapproval

3. Supplier

reviews and

audits

Set clear

expectations on

how suppliers

should manage

quality,

environmental,

social and

corporate

governance

issues

Review potential

key suppliers’

ESG practices

to ensure

they meet

ourstandards

Conduct

performance

reviews and

site audits to

ensure suppliers

continue to

meet our

expected

standards and

to build strong,

collaborative

relationships

1. Supplier quality and sustainability agreement

In 2008 we created an internal standard for suppliers

called the ‘quality and sustainability agreement’.

Werequire all our Approved Vendor List (AVL)

suppliersto implement this agreement and provide

us with declarations of compliance as part of the

assessmentprocess.

2. Supplier assessment and approval

Our supplier quality team carry out initial desktop reviews

and on-site audits on any potential new AVL supplier.

These assessments include quality and sustainability

practices. Only suppliers who can demonstrate they meet

our requirements will be approved. Once approved, AVL

suppliers are re-audited every two years.

3. Supplier reviews and audits

We conduct regular proactive audits of suppliers to an

annual audit schedule and initiate supplier improvement

development plans. In FY2022 we completed 57 site

audits and 98 follow-up audits and new supplier desktop

audits. This represents 90 key suppliers on the AVL and

covers 47% of key supplier spend. Travel restrictions

hampered the number of audits possible.

Find out more in

ourSustainability

Report 2022

Sustainability continued

Build a sustainable supply chain

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 85

Enable sustainable innovation

Materials and circular economy

Controlled materials

Due to the nature of the materials we use in some of our

products and how they are used by our customers, Trifast

is subject to a range of legislation related to controlled

or hazardous materials. Trifast has a dedicated material

compliance team to ensure we manage our obligations

eectively and can provide our customers with the

necessary documentation.

Fasteners enable a more circular economy as they

allow products to be opened up and repaired rather

than thrown away. In developing our new sustainability

strategy, we will explore the impacts, risks and

opportunities related to material use and the circular

economy across our entire value chain.

Early engagement of Trifast engineers within the design

curve allows to fully integrate fastener solutions with

the lowest environmental impact. To achieve this, the

engineering team works closely with both the customer

and the supply chain to ﬁnd an optimum balance between

performance, commercial and environmental cost.

Disrupting technologies requiring novel solutions

to problems previously not encountered are a key

growth area for the Group. These areas require both

the manufacturer and customer to align requirements

and wishes with the actual capability and potential

of the available manufacturing methods. Product

simpliﬁcation and requirement review allows improved

manufacturability while maintaining ﬁt for function

and reducing environmental impact. Examples are

components speciﬁcto the ongoing electriﬁcation.

Similarly, this process can be applied during running

programmes through VA/VE (Value Analysis and

Value Engineering), whereby applications are

reviewedretrospectively.

Design for recyclability

Fasteners generally account for less than 2% of

thecomplete product weight. Recycling value streams

aretherefore formulated around the materials with the

highest content, are the most valuable or are easiest to

recover. Fasteners can play a major role in the eciency

of recovery of materials by either aiding removability or

the potential of separation, for example:

• Products manufactured of homogeneous

plasticscanbeground to provide raw material for the

remanufacture of plastic components. The use of steel

fasteners will allow these to be magnetically separated

from the ground material, allowing both plastic and

steel to be recycled

• Using fasteners of similar materials as the main

structure allows these to become part of the recyclate.

Where appropriate, for example on aluminium or steel

fasteners, selecting a coating, which is thermically

removed during the melting process or can become

part of the newly cast alloy, increases the overall

recyclability of the design and product

Design for manufacture

Within our seven manufacturing locations, TR has a

wealth of engineering experience which customers

can utilise. Our engineers work on reﬁning tool design,

production processes and eciencies. This ensures the

part is manufactured to the correct speciﬁcation at the

lowest possible cost. Feasibility engineers make sure we

comply with customers’ drawings and requirements to

help identify any areas of concern or risk. Drawing on

our expertise in developing products for high-volume

production, we can provide advice on design and

speciﬁcation suited for most economical manufacture.

Design for assembly

Our fastener engineers can provide support and

guidance when taking a design from prototype into

serial production. Selecting a common drive system

provides tool ﬂexibility within the assembly line, but also

enables remote maintenance or disassembly units to use

universaltools.

Alternative drive systems or drive sizes can be applied to

fulﬁl Poke-Yoke requirements during assembly or repair

and maintenance. Similar product line optimisation and

automation often requires modiﬁcations on existing

fasteners. Our widespread experience in multiple

applications and markets allows us to support

customers making the right design decisions.

End-to-end design

Our engineering team forms an integral part within the

Trifast structure, working closely with all other teams to

ensure a smooth transition from ideation and concept

creation to prototyping and serial production. Sustainable

design development criteria also refer to the inherent

and consistent process and product quality and its

documentation, such as PPAP or other approvals.

Find out more in

ourSustainability

Report 2022

Strategic report

86 Trifast plcAnnual Report for the year ended 31 March 2022

Task Force on Climate-related Financial

Disclosures (TCFD)

Climate change poses signiﬁcant risks to people,

ecosystems and economies across the world and

decisiveaction is needed to address the climate

emergency. The impacts of climate change are already

being felt and will increase if unchecked, creating new

risks and opportunities for companies.

We are committed to taking action to reduce emissions

and limit climate change to less than 1.5°C and are

formalising our science-based net zero emissions targets.

We also recognise the scale of transformation required

globally to avoid catastrophic climate change and the

rolewe can play in increasing resilience.

For Trifast, this means fully embedding climate change

considerations into the way we operate and manage risks.

We will need to collaborate closely with suppliers and

customers, and explore new materials, processes and

ideas to prosper whilst delivering a sustainable future.

Trifast operates globally and our manufacturing

operations and those of our suppliers and customers are

in regions that will be aected by climate-related extreme

weather. Our business and raw materials will be impacted

by carbon taxes and legislation, and the markets we

serve will likely evolve. Our global reach, collaborative

approach, and eective governance structures position

uswell to seize opportunities and grow.

In accordance with the requirements of Listing Rule

9.8.6R, Trifast has provided disclosures against 10 of the

11 disclosure recommendations that span four key areas

of governance, strategy and climate change scenario

analysis, risk management, and metrics and targets.

We are currently working on setting targets to manage

climate-related risks and opportunities which we plan

toissue in 2023.

Governance and risk management

During 2021 we completed a detailed review the

potentialimpact of climate change impact on the

business. The Board considers sustainability issues

(including climate change) throughout the year and

oversees the consideration of climate-related risks and

opportunities under the TCFD disclosure requirements.

Having established climate scenarios, we ran a climate

change risk workshop with senior managers from

across the business in January to consider the most

signiﬁcant climate risks and opportunities. The ﬁndings

have been considered as part of our business risk and

ﬁnancial planning processes and are being reviewed on

an on-going basis by the Audit Committee and its Risk

Sub-Committee.

Climate change is a standard discussion point at

all BoardSustainability Committee and Executive

Sustainability Committee meetings. The Executive

Sustainability Committee provide support to the relevant

business owners by enabling conversations that help them

identify and monitor risks, which they are then responsible

for actioning.

Strategy

We recognise the scale of the impact that climate change

will have worldwide, and we have carefully considered the

risk and opportunities it may have for our business over a

variety of climate scenarios and time horizons.

Our review included physical risks, such as more frequent

extreme weather events, and transition risks, such as

changes in legislation or market conditions. We also

explored opportunities associated with a changed

climateor adaptation.

For the purpose of evaluating climate change-related

impacts, the Group has deﬁned the following

timehorizons:

Short term

0-2 years

Medium term

2-10 years

Long term

10+ years

Two risks were identiﬁed as having the greatest impact

onthe business in the short to medium term:

• Disruption across our value chain due to

extremeweather

• Additional costs from carbon taxes, expanded

legislation and transition to new materials

Sustainability continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 87

The key risks Trifast has identiﬁed are as follows:

Physical risks

Acute

Climate change is likely to bring increased intensity

andfrequency of storms, concentrated rainfall events,

and wildﬁres. Extreme weather events are likely to cause

disruption to our operations and those of our suppliers

and customers.

In the medium to long term, risks include damage to our

buildings and infrastructure, lost time and productivity,

and any associated increased cost of insurance.

Additionally, a major supplier disruption event is a

possible key risk, causing an outage for a period of time

which may cause possible delays to customer shipments,

the timing of revenue recognition and the potential

for penalty for late delivery to customers. Similarly,

disruption to our customers’ operations or supply chain

may cause delays in manufacturing, leading to reduced

ordeferredrevenue.

We have mitigation plans for each of these risks identiﬁed,

which have been developed as part of longstanding

business continuity and disaster recovery plans.

Our manufacturing centres are situated in various

dierent locations allowing a level of ﬂexibility and agility

should one site become aected. We endeavour to dual

source key components wherever possible. Additionally,

the Group has appropriate business interruption insurance

in place

Chronic

Climate change will likely lead to higher temperatures

in the areas we operate in. Higher peak and average

temperatures are likely to result in increased energy

demand and cooling capacity required for manufacturing

site and oces, and have the potential to impact on the

product lifecycle of temperature sensitive components.

This could lead to increased capital expenditure to

expand or upgrade cooling equipment across multiple

sites. In addition, increased heatwaves and droughts

could have an impact on the health of more vulnerable

employees and their families possibly resulting in higher

sta absence levels. Some areas we operate may be

aected by sea level rise, and maybe to subject to costs

to support more resilient civic infrastructure or suer

ﬂooding incidents more frequently.

Transitional risks

Action by policy makers to avoid climate disaster will

likely create a large and radical change in global markets,

with a drive to shift quickly towards renewables and zero

emissions vehicles, and away from fossil fuels.

We expect the introduction of carbon taxes and greater

carbon-related regulation across all regions in the short

and medium term. We anticipate an increase in the

cost of energy, raw materials (steel in particular), and

manufactured products. Expanded legislation which

will likely impose additional compliance costs for us and

suppliers. The shift towards a low-carbon economy will

also require investment in new materials and technologies,

and some market segments decline (including those

related to the internal combustion engine).

To ensure greater resilience to climate risks, it may be

a requirement to hold greater inventory as a failure to

deliver on our promise to our customers may damage

ourreputation and incur ﬁnancial penalties.

Opportunities

A focus on carbon reductions and on-site generation will

deliver cost savings and greater resilience. Our ability to

manage the increased regulatory burden may provide

competitive advantage and growth opportunities,

especially where regional or less-well managed

competitors cease to operate.

We expect to see the growth of new segments, especially

in renewable energy and low carbon vehicles. Our ability

to innovate and partner with customers ensures we

are well positioned. We also anticipate an opportunity

to provide premium services to help customers

hedge against climate risks and develop innovative,

low-carbonproducts.

Strategic report

88 Trifast plcAnnual Report for the year ended 31 March 2022

Strategy continued

Scenario analysis

The impact of each of the risks identiﬁed above has

been assessed, quantiﬁed and considered in two climate

change related scenarios:

• Aggressive mitigation – emissions halved by 2050,

average temperature increase of 1.5°C; and

• Strong mitigation – emissions stabilised at half of

today’s emissions by 2080, average temperature

increase of 2.4°C

In terms of modelling horizon, we have considered the

impacts over the short, medium and long term, and

with regard to the occurrence of the risks identiﬁed

and also in comparing with the horizons adopted by

peers, the most appropriate time horizon to model is

3 years in line with our viability statement. The most

recent strategic three-year plans have been extrapolated

to form the base case long-term plans from which to

sensitise, usinggrowth rates and assumptions consistent

with otherforward-looking ﬁnancial statement and

assumptions items.

Given the modelling horizon, there is not likely to be

a signiﬁcant dierence between the two scenarios in

relation to our exposure to physical risks – a change of

1.5°C is expected by 2030 under all scenarios, with the

same likelihood and distribution of extreme weather

events and chronic changes in weather patterns and

temperatures. The major dierences appear between

2040 and 2080 which falls outside of the scope of our

long-term plans and provides sucient time for the

business to adapt if required. In terms of transitional risk,

we do expect a dierence between the two scenarios,

most notably in the size of increases to energy costs and

the size of anticipated carbon taris across all regions.

Based on the modelling we have performed and given the

signiﬁcant ﬁnancial headroom Trifast has, the growth in

the long-range plans, the relative magnitude of the impact

the risks present, the mitigation plans, and the insurance

cover in place, it is not anticipated that the climate-related

risks identiﬁed will have a signiﬁcant impact on the

organisation’s strategy. Therefore, Trifast is considered

resilient to climate change-related scenarios

Metrics and targets

We monitor carbon emissions sources that fall within

Scopes 1 and 2, and are increasing our ability to report

on Scope 3 emissions. We report our carbon emissions

annually within the Annual Report and Sustainability

Report, see page 82.

We have committed to setting a science-based net zero

target for Scope 1 and 2 emissions by 2023, and extending

this to include Scope 3 emissions by 2026.

We have considered whether the existing

metricsandtargets support the ongoing assessment

of climate-related risks and opportunities and have

determined that no additional metrics or targets

arerequired at this time. We will continue to evaluate

whetheradditional metrics and targets are required

as part of our existing business strategy and risk

management processes.

Task Force on Climate-related Financial

Disclosures (TCFD) continued

Sustainability continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 89

Non-ﬁnancial reporting

compliancestatement

We aim to comply with the non-ﬁnancial reporting requirements contained in Sections 414CA and 414CB of the

Companies Act 2006. The table below, and the information it refers to, is intended to help stakeholders understand

our position on key non-ﬁnancial matters. This builds on existing reporting that we already do under the Guidance

on the Strategic Report (UK Financial Reporting Council).

Non-ﬁnancial reporting matter Policy/code Reference

Environmental issues • Environmental Policy Sustainability

pages 82

and83

Employees • Code of Business Conduct

• Business Ethics Policy

• Whistleblowing Policy

• Health and Safety Policy

• GDPR privacy notice

• Freedom of association

Sustainability

pages 74 to 79

Human rights • Modern Slavery Statement

• Supplier Code of Conduct

• Working Conditions and Human

RightsPolicy

Sustainability

pages 76 and 77

Social matters • Supporting charities

• Charitable and Political Donations Policy

Sustainability

pages 80 and 81

Anti-corruption and anti-bribery • Anti-Bribery Policy

• Fair Competition and Anti-Trust Policy

• Whistleblowing Policy

Sustainability

page 77

Policy embedding, due diligence and outcomes Page 74

Description of principal risks and impact of business activities Pages 62 to 64

Description of business model Pages 10 and 11

Non-ﬁnancial key performance indicators Page 15

The Strategic Report was approved by the Board

ofDirectors on 25 July and signed on its behalf by:

Jonathan Shearman

Non-Executive Chair

Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex

TN22 1QW

Company registration number: 01919797

90 Trifast plcAnnual Report for the year ended 31 March 2022

Governance

At Trifast, we consider that

good governance forms the

bedrock to the success of

our global business

Introduction

On behalf of the Board I am delighted to present the

Company’s corporate governance report for the year

ended 31 March 2022. As Chair, one of the key aspects

of my role is to ensure that the Group’s governance is

appropriately robust, and that there is a clear division

ofresponsibilities between the Chair, Executive Directors,

Non-Executive Directors and Operational Executive

Boardmembers.

As a Board, we know that eective governance is not

purely a matter of regulatory compliance and another

12months of pandemic has further highlightedthe critical

importance of a company’s purpose and its alignment

with the strategy and company culture. We have

continued to establish a structure which aligns with these,

and the principles of the Code, to support long-term value

creation for our stakeholders.

Progress during the year

When writing last year, I highlighted two areas of future

focus. The ﬁrst, being consideration of the BEIS report,

alongside updated guidance from the FRC, this has been

hampered in that (at the time of writing) the necessary

papers are only now being published. Having made our

representations during the consultation period, we will

continue to study the proposals as sucient details are

released in a form that will allow meaningful decisions

to be made. Secondly, work on the KPI dashboard

continuedand indeed expanded. It is this work that

stands behind our medium-term aspirations as outlined

on pages 12 to 15.

During the year, the Board discussed learnings from

thepandemic as well as taking the opportunity to protect

andaccelerate certain aspects of our strategy. In addition,

we engaged with our workforce to consider new ways of

working and with our shareholders by way of an externally

moderated perception study.

To further underpin the Group’s ambition, and based on

our 2021 Board evaluations, the Board took the decision

to add to the Secretariat department and it is my pleasure

to welcome Christopher Morgan to the team from

4April 2022. Christopher brings a wealth of governance

experience, including as Company Secretary for a

FTSE250 business.

Chair’s

introduction

togovernance

Jonathan Shearman

Chair

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 91

Board succession and evaluation

We assess the eectiveness of our Board, its members

and Committees each year and, in respect of FY2022,

the review was undertaken by a series of surveys and

one-to-one meetings. This evaluation process was

enhanced based on our continued learnings and has

againenabled the Board to identify opportunities to

further improve our eectiveness. More details on the

areas of agreed focus are set out on page 103.

Scott Mac Meekin will have served as an independent

Non-Executive Director for nine years as of April 2022.

Hisindustry expertise is invaluable, and we have asked

Scott to serve for the remainder of FY2023, with his

retirement set for 31 March 2023. Further detail on this

decision and our recruitment process can be found in

theNomination Committee report (page 102).

I am conﬁdent that the corporate governance framework

in place will continue to support the Group in delivering

value for all stakeholders.

Our AGM will be held on 7September 2022 and we are

delighted that, this year, it seems likely we will be allowed

to meet in person. I hope that as shareholders in Trifast,

you will be able to attend to meet with Board members

and sta to discuss any matters you feel are important

tothe continued future success of the Group.

Jonathan Shearman

Chair

25 July 2022

Corporate Governance Code 2018

1 Board leadership and Company purpose Read more on pages 90 to 95

2 Division of responsibilities Read more on pages 96 to 100

3 Composition, succession and evaluation Read more on pages 101 to 103

4 Audit, risk and internal control Read more on pages 104 to 108

5 Remuneration Read more on pages 109 to 129

The UK Corporate Governance Code 2018

The Board is committed to the highest standards of

governance and supports the principles and provisions

set out in the UK Corporate Governance Code 2018

(the‘Code’), a copy of which is available at

www.frc.org.uk. The sections within this report,

asindicated below, explain where you can read about

how the ﬁve sections of the Code have been applied.

Compliance with the Code

Throughout the year ended 31 March 2022, with the

exception of Provision 38 which states that the pension

contribution rates for executive directors, or payments

in lieu, should be aligned with those available to the

workforce, the Company has been fully compliant with

all of the relevant principles and provisions set out in

the Code.

The Directors’ remuneration report contains further

information concerning the Company’s approach to

pension contribution rates for Executive Directors.

TheCommittee, in agreement with the Executive

Directors, approved the reduction of the Executive

Directors’ pension contribution rates to that available

to the majority of the workforce with eect from

1April2022. Read more on page 109.

The Company’s auditor, BDO, is required to review

whether this statement reﬂects the Company’s

compliance with those provisions of the Code speciﬁed

for their review by the Financial Conduct Authority’s

Listing Rules and to report if it does not reﬂect such

compliance. No such report has been made.

92 Trifast plcAnnual Report for the year ended 31 March 2022

Board leadership and Company purpose

Jonathan Shearman

Independent Non-Executive

Chair

Mark Belton

Chief Executive Ocer

Clare Foster

Chief Financial Ocer

Clive Watson

Senior Independent

Non-Executive Director

Length of service

13 years; appointed to the

Board in 2009 and as Chair

on 1 April 2020

Formerly Non-Executive

Director and Chair of the

Remuneration Committee

Length of service

23 years; appointed to the

Board in 2010and CEO on

1October 2015

Appointed Chair of the OEB

on 1April2020

Length of service

7 years; appointed to the

Board on 1October 2015

Appointed to the OEB on

1April 2020

Length of service

2 years; appointed to the

Board on 30 July 2020

Key areas of expertise

Experienced professional

in M&A, strategic planning

and forecasting, with

a successful career in

smaller companies fund

management, stockbroking

and investment banking.

Jonathan understands

and ﬁts within the culture

of Trifast at Board and

operational level, as

well aswithin the global

business teams

Key areas of expertise

Over his career with

Trifast, Mark has forged

a wealth of knowledge

and great understanding

of the industry, the TR

model, keysectors and

ourcustomer portfolio

Prior to becoming CEO,

Mark was Group Finance

Director for six years,

playing a pivotal role in

all aspects of strategic,

acquisitive and ﬁnancial

planning, as well as

stakeholder relations

Mark has added to his

responsibilities, having

taken on the mantle as

Chairof the ESG Committee

to develop our best-practice

sustainability strategy that

is aligned with the Group’s

growth aspirations

Key areas of expertise

Clare was ﬁrst introduced

to Trifast in 1999 (as part

of KPMG), since which

time she has developed an

in-depth understanding of

the business, its values and

the key drivers for success

During her career, she

has gained experience

in ﬁnancial and treasury

management, accounting

governance, tax compliance

and statutory reporting.

Her skills base and strategic

thinking support the

wider business in terms

of strategic planning,

organic investment

decisions and the Group’s

acquisitionactivities

Key areas of expertise

Chartered accountant

with extensive ﬁnancial

experience gained over his

career in industry both in

the UK and internationally.

Retired in 2019 as Group

Finance Director at Spectris

plc, a position held since

2006, and from his NED

role at Spirax-Sarco which

he held for ten years

Other directorships

Character Group

(appointed1 June 2022)

Other directorships

Senior Independent

Non-Executive Director at

Breedon Group plc (Audit &

Risk Chair), Non-Executive

Director at discoverIE

Group plc (Audit & Risk

Chair) and Kier Group plc

(Audit & Risk Chair)

The Board

Female | 33%

Male | 67%

0-3 years | 33%

3-6 years | 0%

6-9 years | 33%

9+ years | 34%

Board tenure

as at year end

Board gender

as at year end

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 93

40-49 | 17%

50-59 | 50%

60-69 | 33%

Board age

as at year end

Christopher Morgan

Christopher Morgan was

appointed asCompany

Secretary on4 April 2022

Scott Mac Meekin

Independent Non-Executive

Director

Claire Balmforth

Independent Non-Executive

Director

Compliance

The Board recognises

the importance of its

composition and diversity

and remains committed

to good corporate

governance. We believe

that a wide range of

knowledge, skills and

experience are among the

essential drivers of Board

eectiveness

Trifast believes the

structure of the Board

and its Committees brings

balance, wise counsel and

deep understanding of the

business at both Board and

operational levels

Committee

memberships

Nomination

Committee

Audit & Risk

Committee

Remuneration

Committee

Committee Chair

Lyndsey Case

Company Secretary

Length of service

9 years; appointed to the

Board on 25 April 2013

Length of service

2 years; appointed to the

Board on 1 April 2020

Length of service

22 years; appointed as

Company Secretary on

1April 2016

Key areas of expertise

30+ year career in both

commercial and corporate

structures across all

major continents and

cultures in ﬁnance,

M&A, global logistics,

technology, distribution

andmanufacturing

Key areas of expertise

Extensive operational

experience and also

signiﬁcant knowledge

of leadership,

customer-focused cultures

and human resources

including employee

engagement, having worked

in FTSE 250 companies

within the retail, B2B and

ﬁnancial services sectors

Key areas of expertise

Lyndsey began her TR

career within the UK

ﬁnance team in 2000

before moving to Group

Finance in 2006. She took

up the role of Company

Secretary in 2016 and has

extended her knowledge

and expertise within the

Secretariat function.

In2020 Lyndsey joined the

ESG Committee, which is

responsible for developing

the sustainability strategy.

She is an FCCA accountant

and experienced in ﬁnancial

accounting, legal&

regulatory reporting,

regulatory compliance

andcorporate governance

Other directorships

CEO at Circular Computing,

Member of Harvard Alumni

Association and National

University Singapore

Alumni Association

Other directorships

British Heart Foundation

(member of the RemCo and

Retail Committees), FRP

Advisory Group plc

(RemCo Chair)

94 Trifast plcAnnual Report for the year ended 31 March 2022

Board leadership and Company purpose

Helen Toole

Global HR and Sustainability

Director

Colin Coddington

Global IT Director

Dan Jack

Global Sales and

Commercial Director

Stevie Meiklem

Project Atlas Lead

Length of service

12 years; appointed to the

OEB on 1 April 2020

Length of service

26 years; appointed to the

OEB on 1 April 2020

Length of service

2 years; appointed to the

OEB on 8 June 2020

Length of service

30 years; appointed to the

OEB on 1 April 2020

Key areas of expertise

Helen has 30 years’

experience in the

management and strategic

development of human

resources functions. She

has worked in the public,

private and voluntary

sectors as well as running

her own HR consultancy

business for a number

ofyears

Helen has a great

deal of experience in

the development and

execution of HR strategy,

dispute resolution,

training, development

andlegalcompliance

Key areas of expertise

35 years’ experience as

an IT professional. Over

the last 26 years Colin has

developed an in-depth

understanding of the

business, its values and

key drivers for success.

Colin takes pride in leading

a strong IT function that

has excelled during these

challenging times with the

fast-changing technology

landscape thatis

remoteworking

Key areas of expertise

Over his 25-year career

within the local and global

industry, Dan has gained

extensive experience in

P&L ownership, commercial

supply chain management,

engineering, sales &

marketing, and business

development. Having

worked within the UK,

Europe and Asia in senior

management roles, he has

also developed skills and

knowledge in strategic and

ﬁnancial planning, M&A and

project management

Key areas of expertise

Stevie has over 20 years’

strong procurement and

supply knowledge (Level

4 CIPS qualiﬁcation),

aswell as having a good

commercial background.

Stevie was UK Operations

Director andManaging

Director of Hungary for

ten years and became

Project Atlas Lead due

to his understanding of

our end-to-end business

processes and knowledge

of our global locations and

executive strategies

Operational Executive Board

Mark Belton (as Chair) and Clare Foster sit

on the OEB. To read their biographies see

page 92

Mark Belton

Chief Executive Ocer

Clare Foster

Chief Financial Ocer

The Operational Executive Board has responsibility for

the development and implementation of the Group’s

corporate strategy, working together to drive the

successful conclusion of our strategic goals

Key terms of reference are to:

• Drive and deliver the Group’s proﬁtable growth

strategy both organically and by acquisitive means

• Motivate, nurture and develop the workforce

• Ensure the safety and wellbeing of all colleagues

• Commercially, identify and minimise risk within

thebusiness

• Realise the Project Atlas beneﬁts case, in conjunction

with the project team

• Enhance communications and collaboration within

theGroup

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 95

Glenda Roberts

Global Projects and

Marketing Director

Dave Fisk

UK & Ireland MD

Andy Nuttall

Europe MD

Endy Chin

Asia MD

Length of service

32 years; appointed to the

OEB on 1 April 2020

Length of service

29 years; appointed to the

OEB on 1 April 2020

Length of service

3 years; appointed to the

OEB on 1 April 2020

Length of service

27 years; appointed to the

OEB on 1 April 2020

Key areas of expertise

40 years’ experience within

the industrial fastenings

sector, highly skilled in

global sales & marketing,

global logistics and supply

chain sourcing. Glenda

currently has a dual role as

Director of TR Fastenings

Inc. and Global Projects

& Marketing Director.

Previously, as Global Sales

Director, she developed

the Global Account Team

strategy, recruiting GADs

and SAMs to oversee major

multinational accounts

and masterminded the

diversiﬁcation into Tier 1

supply in the automotive

sector. Glenda served

on the Trifast plc Board

between 2010 and 2020

Key areas of expertise

Dave has over 32 years’

experience in industry

and his expertise covers

strategic planning,

leadership development,

purchasing and supply

chain, continuous

improvement and digital

transformation. He has

previously implemented

several growth initiatives

and led parallel

restructuring programmes

post-merger andrecession

Key areas of expertise

With 38 years’ experience

in the fastenings industry,

Andy has held senior

roles in multinational

manufacturing and

distribution businesses.

Joining TR in 2019, he has

a wealth of experience in

manufacturing, key account

management, logistics and

end-to-end supply chain.

He has implemented and

managed multi-million-

pound VMI logistics

systems in both the UK

and Europe, along with

major capex expansions,

plant restructuring and

consolidations. He holds the

Six Sigma qualiﬁcation

Key areas of expertise

Endy qualiﬁed as a

Bachelor of Mechanical

Engineering 34 years ago

in New Zealand. He started

his career in aerospace

before joining TR Formac

Singapore manufacturing

27 years ago. Becoming

General Manager in 2007,

Endy has since been

instrumental in the set-up

of our sites in India and

Thailand. More recently,

Endy was the Asia COO

before being promoted to

Asia MD on 1 April 2021.

Endy has a deep knowledge

of fastener production

and managing large

globalaccounts

40-49 | 2

50-59 | 7

60+ | 1

OEB age

as at year end

Female | 3

Male | 7

OEB gender

as at year end

Scott McDaniel

Scott McDaniel joined the

OEB on the 25 March 2022

as North America MD

96 Trifast plcAnnual Report for the year ended 31 March 2022

Corporate governance report

Division of responsibilities

The Board is accountable to the shareholders and wider

stakeholders for standards of governance across the

Group’s businesses. Certain strategic decisions and

authorities are reserved as matters for the Board

Board composition

During FY2022, the Board consisted of two Executive

Directors, three Independent Non-Executive Directors and

a Non-Executive Chair. Taking into account the provisions

of the Code, the Board has determined that, during the

year under review, each of the Non-Executive Directors

remained independent of management and free from

any business or other relationship which could interfere

with the exercise of their independent judgement for the

purposes of the Code.

Re-election

In accordance with the Code, all Directors are subject to

annual re-election and, being eligible, Jonathan Shearman,

Mark Belton, Clare Foster, Clive Watson, Scott Mac Meekin

and Claire Balmforth oer themselves for re-election as

Directors at the forthcoming Annual General Meeting.

Access to advice

The Independent Non-Executive Directors have full access

to the external auditor and to management and there is

a formal procedure for Directors to obtain independent

professional advice in the furtherance of their duties

should this be necessary. All Directors have access to

theadvice and services of the Company Secretary.

The key areas reserved for the Board are:

• Establishing and appraising the overall strategic

direction and management responsibility

• Approval of major corporate transactions

includingacquisitions

• Reviewing and recommending overall capital allocation

• Approval of the Group’s reports and

ﬁnancialstatements

• Approval of the dividend policy

• Approval of new bank facilities, or signiﬁcant changes

to existing facilities

• Maintaining sound internal control and risk

management systems

• Assessment and approval of the principal risks for the

business and how they are being managed

• Approval of the viability statement

• Succession planning and appointments at senior level

• Approval of the delegation of authority between

Executives and the terms of reference of all

Committees of the Board

• Review of the Group’s overall corporate governance

and evaluating the performance of the Board and its

Committees annually

Committee responsibilities

The Board has delegated speciﬁc responsibilities to the

Audit & Risk, Nomination and Remuneration Committees.

Further explanation of how the principles and supporting

principles have been applied is set out below (including

Nomination Committee, Audit & Risk Committee and

Directors’ remuneration reports and in the viability

statement on pages 64 and 65).

In addition, the governance structure also includes an

Operational Executive Board (OEB), a Sustainability

Committee and, more recently, an Acquisition MAR

Committee. Thepurpose of the Acquisition MAR

Committee is to develop and oversee procedures and

controls for the Company’s compliance with regulatory

requirements in respect of disclosure and control of

inside information directly concerning the Company

to the extent that it relates to the Company’s M&A

activities. Further details can be found by following

thepage references in the governance structure on

theoppositepage.

Details of the terms of reference for the Board

Committees are available to view on the investor

websiteat www.trifast.com/investors/governance.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 97

Members

Jonathan Shearman

(Chair)

Scott Mac Meekin

Claire Balmforth

Clive Watson

Role

Regularly evaluates

the composition of

the Board and the

Committees so that

each is made up of the

appropriate people

with the requisite skills,

knowledge, experience,

and independence. The

Committee looks closely

at succession planning

for Executive and

Non-Executive Directors

and Senior Management

Find out more on pages

101 to 103

Members

Mark Belton (Chair)

Clare Foster

Helen Toole

Colin Coddington

Dan Jack

Stevie Meiklem

Glenda Roberts

Dave Fisk

Andy Nuttall

Endy Chin

Scott McDaniel

Role

The Board has delegated the responsibility for the

development and implementation of its corporate

strategy to the OEB. This highly experienced team is

drawn from across the Group and collectively bring awide

range of specialist skills tothe mix

Find out more on pages 94 and 95

Members

Clive Watson (Chair)

Scott Mac Meekin

Claire Balmforth

Role

Provides eective

governance around

Trifast’s ﬁnancial

reporting, risk

management and

internal controls

framework and ensures

the integrity of its

ﬁnancial statements.

Reviews accounting

policies, monitors

internal controls, risk

management processes

and the performance of

the external auditor

Find out more on pages

104to108

Members

Mark Belton (Chair)

Clare Foster

Jonathan Shearman

Scott Mac Meekin

Claire Balmforth

Clive Watson

Role

Oversees our

sustainability strategy

and monitors and

reports performance

against objectives

and targets. Our

sustainability

structure also includes

operational-level

committees made up

of senior managers and

subject matter experts

from across the business

Members

Claire Balmforth (Chair)

Scott Mac Meekin

Clive Watson

Role

The non-executive

members of the

Remuneration

Committee ensure that

a policy exists for the

remuneration of the

Executive Directors

that is fair, attracts key

executives and rewards

progress against Trifast’s

business strategy

Find out more on pages

109to129

Members

Mark Belton (Chair)

Clare Foster

Lyndsey Case

Paul Ranson

Role

To maintain and develop procedures and controls in order

to comply with regulatory obligations in relation to our

M&A activities

Board

Board Committees

In order to allow the Board to focus on decision-making areas that require an independent opinion, separate

Board Committees also exist, which comprise the Non-Executive Chair and Non-Executive Directors

Executive Committees

For the day-to-day operations, Executive Committees have been established, comprising

Executive Directors and Senior Managers

Nomination

Committee

Operational Executive Board

Audit & Risk

Committee

Plc Sustainability

Committee

Remuneration

Committee

Acquisition MAR Committee

How the Board is structured and works

98 Trifast plcAnnual Report for the year ended 31 March 2022

Corporate

governance report continued

Division of responsibilities

Company purpose

see page 02

Culture and values

see page 03

Business model

see pages 10 and 11

Strategy

see page 02

Leading an eective Board for long-term success

Sustainability

see pages 42 to 51

Eective controls

see pages 60 and 61

Stakeholder

engagement

see pages 66 to 73

Workforce practices

see pages 74 to 77

Board appointments

The appointment, replacement and powers of the

Directors are governed by the Company’s Articles of

Association, the UK Corporate Governance Code, the

Companies Act, prevailing legislation and resolutions

passed at the Annual General Meeting (AGM) or other

general meetings of the Company.

The Company has separate posts for Chair and Chief

Executive. The Chair leads the Board and the Chief

Executive is responsible for the management of

the Company, implementing policies and strategies

determined by the Board.

Each Director’s availability and time commitment to the

Company is essential in performing their role eectively.

Prior to any new appointment, the Board would review

other demands on a Director’s time to ensure they have

sucient capacity to commit to the role. A Director must

seek Board approval prior to undertaking any additional

external appointments.

Appropriate and relevant training is provided to the

Executive Directors as and when required. Non-Executive

Directors are responsible for their own relevant learning

and development activity and inform the Nomination

Committee Chair and Company Secretary of any

trainingundertaken.

The contracts of appointment of Non-Executive

Directorsare available for inspection on request

totheCompany Secretary.

The Chair (Jonathan Shearman) and Senior

IndependentNon-Executive Director (Clive Watson)

conﬁrm that, following formal performance evaluation,

theindividuals seeking re-election continue to be eective

in contributing to the long-term success of theGroup and

demonstrate commitment to the role.

Trifast considers that the composition of its

BoardandCommittees is fully compliant with the Code.

TheCompany acknowledge that Jonathan Shearman has

been on the Board since 2009, initially as a Non-Executive

Director, and since April 2020, as Non-Executive Chair.

The Board continue to review this situation and determine

that Jonathan remains independent and performs his

duties eectively and with integrity, as well as possessing

a deep understanding of the business.

To read more about the Board, see pages 92 and 93.

Details of substantial shareholdings of the Company can

be found on page 131.

Board meetings

The Board meets at least ﬁve times a year formally,

withadditional meetings to cover speciﬁc topics

includingstrategy, budgets and risk, and is supplied as

early as practical with an agenda and appropriate papers.

Directors are appointed by the Board on recommendation

from the Nomination Committee.

The Board has formally adopted a schedule of

matterswhich are reserved to the Board for decision,

thus ensuring that it maintains control over appropriate

strategic, ﬁnancial, organisation and compliance issues

toensure the long-term success of the Company.

Board attendance

Jonathan Shearman

Mark Belton

Clare Foster

Clive Watson

Scott Mac Meekin

Claire Balmforth

May

Jul

Oct

Dec

Jan

Mar

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 99

Internal audit and risk management

The Board, via the Audit & Risk Committee,

formallyconsiders the requirement for internal audit

on an annualbasis as part of its terms of reference.

Aformalisedinternal business review process known

asa‘health-check’ has been in operation for some years.

These reviews are carried out at each entity using a

scoping and frequency schedule with dierent cycle times

based on size and risk proﬁle. Whilst the Board recognises

that this process does not constitute a fully independent

internal audit, it believes that given the size of the Group,

this provides appropriate comfort as to the operational

and ﬁnancial controls in place. In due course, we expect

the formation of a more formal internal audit function to

form an integral part of the ongoing development of the

Group’s risk management and internal control framework

Following a transition period in FY2022, on

1April2022,aGlobal Head of Risk was formally

appointed. An in-depth review of the Group’s risk

management and internal controls framework was

completed in the second half of FY2022. One of the

key elements of this was a comprehensive review of

the principal risks and uncertainties facing the Group,

including those that would threaten the business model,

future performance, solvency or liquidity.

More details can be found in the Audit & Risk Committee

report on page 108.

Going concern and viability

After making enquiries, the Directors have reasonable

expectations that the Group has adequate resources

tocontinue in operational existence for the foreseeable

future. Further information is given on the basis of

preparation, note 1, and the viability statement on pages

64 and 65. For this reason, the Company continues

to adopt the going concern basis in preparing the

ﬁnancialstatements.

Board meetings and operational visits

During the Covid-19 pandemic, with social guidelines and

travel restrictions in place, certain Board meetings were

held virtually via Microsoft Teams. Since the relaxation of

rules, Board and Committee meetings have once again

been held in person.

Going forward, in addition to holding Board meetings at

Head Oce, the Board plans to return to holding at least

two meetings per year at another of our global locations.

This gives the Directors the chance to see facilities, give

ongoing support to the business, and provide local teams

the opportunity to brief the Board on progress and needs.

The Board places great importance on the interaction

with its colleagues at operational locations. This initiative

ensures that the Directors are available to talk and

understand the needs of each business unit and its sta at

all levels as they are key to Trifast’s ongoing development

and future.

Employee engagement

The Board recognises that the Group’s greatest asset is

its employees. The Directors communicate regularly with

TR teams throughout the global business via SharePoint

and a variety of other virtual platforms. Inlinewith

Provision 5 of the Code’s requirement for Board

engagement at all levels, Jonathan Shearman, Chair, is the

designated Non-Executive Director for sta engagement.

ClaireBalmforth, Chair of the Remuneration Committee,

worksalongside the Global HR and Sustainability Director,

HelenToole, in supporting Jonathan in this role.

In addition to Board visits, Jonathan Shearman, Chair,

andhis Non-Executive Director colleagues have instigated

a regular employee engagement programme aimed at

interacting with sta across our locations and where

opendiscussions are welcomed.

Shareholder engagement

The Board considers that an ongoing dialogue with all

shareholders is important.

All Independent Non-Executive Directors have

theauthority to meet with shareholders without ﬁrst

seekingapproval from the Chief Executive or the Chair.

The Group has an investor website, www.trifast.com.

Thisis regularly updated to ensure that shareholders and

other providers of capital and interested third parties are

fully aware of the Group’s activities. The Group’s Registrar,

Computershare, is linked to the Trifast website and oers

services for shareholders.

The Group also works with City specialists to ensure all

levels of shareholders receive Trifast information.

During the year being reported upon we engaged with:

Peel Hunt LLP – Stockbroker to the Company, Institutional

Fund Managers

TooleyStreet Communications – Investor and

mediarelations

Shareholders can contact them at any time by

writing toTrifast plc, Trifast House, Bellbrook Park,

Uckﬁeld, EastSussex TN22 1QW or via email to

companysecretariat@trifast.com

Over the last ﬁnancial year, we have operated a

structuredinvestor programme, albeit virtually, in the

form of presentations with conference dial-in facilities,

which were open to all of the investment community.

In addition, we introduced the Investor Meet Company

oering which allowed private investors to listen to, and

enter dialogue with, management. These recordings are

also available on our website www.trifast.com

100 Trifast plcAnnual Report for the year ended 31 March 2022

Shareholder engagement continued

Programme of investor and employee events

June 2021 Full-year virtual results roadshow

and investor engagement

including Investor Meet

Companyplatform

July 2021 Hybrid AGM

November 2021 Half-year virtual results roadshow

and investor engagement

including Investor Meet

CompanyPlatform

December 2021 Chairman Uckﬁeld site tour

andemployee engagement

January 2022 Liberum industrials conference

February 2022 NEDs (Jonathan Shearman &

CliveWatson) North East site

tourand employee engagement

Analyst engagement

(quarterlyupdate)

March 2022 NED (Clive Watson) Uckﬁeld site

tour and employee engagement

Plans for FY2023

May 2022 Analyst engagement

(pre-closeperiod)

July 2022 Full-year results roadshow

and investor engagement via

in-person, hybrid and Investor

Meet Company platform

September 2022 AGM

October 2022

Analyst engagement

(pre-closeperiod)

November 2022

Half-year virtual results roadshow

and investor engagement

including Investor Meet

CompanyPlatform

Over the course of FY2023, we intend to run a

mix ofmeetings in person, on location or virtually,

withsomelocation visits involving other senior sta

inasupport role.

For more information on employee engagement

andhowthe Board has considered the requirements

of Section 172 and all stakeholders, see pages 66 to 73

inthestrategic report.

AGM

The AGM has historically oered all shareholders the

opportunity to hear from the Board about the Group’s

progress, as well as dealing with the legal matters of the

meeting. With Covid-19 having disrupted our AGM and

investor activities for the last two years, we are planning

to hold an in-person 2022 AGM. Further details, including

proxy voting guidelines, will be contained within the

Notice of Meeting.

By order of the Board

Christopher Morgan

Company secretary

25 July 2022

Corporate

governance report continued

Division of responsibilities

1. Provisional date, to be ﬁnalised in due course

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 101

Composition, succession and evaluation

Appointing the right people

to the Board and OEB

with the appropriate skills,

experience, knowledge and

diversity is fundamental

tothe ongoing success

ofthe Company

Committee composition and attendance

Nomination Committee attendance

Jonathan Shearman (Chair)

Scott Mac Meekin

Claire Balmforth

Clive Watson

Dec

Nomination

Committee report

Jonathan Shearman

Chair of the Nomination Committee

British | 5

Other | 1

Board

nationality

as at 31.03.22

Executive | 2

Non-Executive | 4

Board

composition

as at 31.03.22

Role

The Nomination Committee’s key reference points are

1. Reviewing the composition of the Board, its

Committees and the Operational Executive Board

(OEB) in order that they retain and reﬂect the

appropriate balance of skills, experience, knowledge

and diversity

2. Evaluating succession planning, training and

development opportunities for the Executive Directors

and the OEB members

Overview

Working closely with the Board, the Committee has

focused on the following matters throughout the year:

1. Culture and values – the Committee remains focused

on ensuring there is sucient emphasis on the role of

culture and corporate values and ensuring that these

are aligned with our strategy in driving Company

performance. The Committee engages with the CEO

and Global HR and Sustainability Director formally and

‘oine’ as necessary. During the year, this included

the Company’s approach to working from home and

adopting hybrid working arrangements

2. Succession planning – building on the work that was

undertaken in FY2021, the Committee, along with

the CEO and GHRSD, has continued to evaluate and

review succession planning across the senior roles in

theCompany

3. Diversity and inclusion (D&I)

102 Trifast plcAnnual Report for the year ended 31 March 2022

Composition, succession and evaluation

Nomination

Committee report continued

Overview continued

We have written elsewhere (see page 77) about our

Group-wide approach to D&I; this obviously emanates

from the Board and impacts the approach of the

Nomination Committee.

The FRC’s guidance on board eectiveness recognises

a breadth of diversity that goes beyond just gender and

race, and includes personal attributes including intellect,

judgement, courage, honesty and tact; and the ability to

listen and forge relationships and develop trust.

This ensures that a board is not closely comprised of

like-minded individuals. The Committee agrees that

diversity is vital when reviewing the composition of

ourBoards and possible new appointees.

At Trifast we promote diversity of gender, social and

ethnic background, cognitive and personal strengths.

Appointing the right people to the Board and OEB with

the appropriate balance of skills, knowledge, experience

and culture is fundamental to the ongoing success of

the Company. Using this approach, the Committee will

continue to recommend the appointment of the best

people with the right skills and potential. We will also

make sure that all employees have an equal chance of

being not only included but also developing their careers.

Read more about our Board on pages 92 and 93.

The Committee will continue to regularly monitor and

review our position in this area and during the coming

year will continue to develop our diversity and inclusion

strategy and policies that will take into account the

suggestions put forward in a number of papers including

the Parker and McGregor-Smith reviews alongside the

BEIS Select Committee’s report.

Coming year initiatives

The Committee intends spending time in FY2023:

1. Further engaging with the workforce directly and

via surveys – this will include work with the younger

generation of employees to recognise and maximise

their contribution to the Group

2. Developing our Board evaluation process – including

consideration of when to engage an independent,

external evaluator

3. Undertaking a recruitment process to replace Scott

Mac Meekin

Board composition and process of recruitment

There were no changes to the Board or Committee

compositions during the year ended 31 March 2022. The

gender balance for the Board was 33% female/67% male.

As already referenced, Scott Mac Meekin will be retiring

from the Board at the end of FY2023. There will be a

future opportunity for me to put on record how much

of a support Scott has been to me personally, to the

Board and the OEB. For now, let me echo my comment

that his industry expertise has been invaluable. This

expertise is what lies behind the Board’s decision to

ask him to stay on for a further 12 months. His support

will assist the Company with the ongoing development

of our commercial oering and consideration of

furtheracquisitions.

I can report that the Committee has already commenced

the recruitment process to replace Scott. Part of this

process has included a review of the Board skills matrix

to ensure it remains ﬁt for future purpose. This will inform

us better in identifying the optimal skills sought from

potential candidates. The Committee will seek to use the

support of a specialist recruitment ﬁrm, to ensure as wide

a range of candidates are considered. Dependent on the

speed with which we are successful, a new Non-Executive

Director may be in place during FY2023.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 103

Committee structure and membership

Throughout FY2022, the Committee complied with the

UK Corporate Governance Code 2018 in that a majority

of the members were independent Non-Executive

Directors. To complement and support the Committee,

the CEO and Global HR and Sustainability Director are

invited to the Nomination Committee meetings as and

whenappropriate.

From 1 April 2021 the Nomination Committee was made

up of:

• Jonathan Shearman, Chair

(Chair of Committee)

• Clive Watson, SID

• Claire Balmforth, NED

• Scott Mac Meekin, NED

Board evaluations

The Board undertakes annual evaluations of its own

performance, that of its Committees, the Chair, individual

Directors, and external audit. As part of this evaluation,

the Board considers the balance of skills, experience, the

independence and knowledge of the Board, its diversity,

including gender, and how eectively the Board works

together as a unit.

Areas that have been highlighted for further development

from this year’s evaluation process include a greater

Board focus on risk management and risk strategy at

all board meetings, with time also being dedicated on

these issues during the Strategy meetings. Secondly,

the Company Secretary will enhance the Non-Executive

Director induction programme in advance of any

appointments, and undertake a wider review of Board

papers and agendas ensuring as ecient and eective

aBoard dynamic as possible going forward.

Board evaluation process

The use of external evaluation remained under review

during the year. The Committee does not yet consider

such an approach to be appropriate, but expects this

to form part of future plans. As such, the process of

theevaluation was as follows:

Surveys and meetings

The appropriate surveys are distributed either

electronically to the Board or, in the case of individual

Director and Chair evaluations, conducted via

face-to-face meetings:

• Individual Director

• Chair

• Board

• Nomination Committee

• Remuneration Committee

• Audit & Risk Committee

• External audit

Review

Initial review of the responses is carried out by

theCompany Secretary to prepare for the Chair,

andCommittee Chairs where relevant, a consolidated

reportfor each discipline and any other points raised.

Board eectiveness

During the year, we reviewed and adjusted the evaluation

process to allow us to capture, more succinctly, aspects

where the Board felt our approach was at least ‘adequate’;

this then allowed us to capture a small number of areas

where we felt there was room for further improvement.

The results were discussed during the June 2022 Board

and Nomination Committee meetings and a plan for the

coming 12 months agreed.

The evaluations for FY2022 indicated that the Board and

Committees operated eectively overall.

Jonathan Shearman

Chair of the Nomination Committee

25 July 2022

104 Trifast plcAnnual Report for the year ended 31 March 2022

Audit, risk and internal control

The Committee oversaw the

performance of an in-depth review

of the Group’s risk management

and internal control framework

during the second half of the year,

led by our new Global Head of Risk

who transitioned into the role in

FY2022, with formal appointment

from 1 April 2022

Committee composition and attendance

Audit & Risk Committee attendance

Clive Watson

Scott Mac Meekin

Claire Balmforth

Jun

Nov

Jan

The Committee consists of three Independent

Non-Executive Directors. The external auditor, the Chair,

the Chief Executive, the Chief Financial Ocer, the Group

Financial Controller and the Company Secretary are also

invited to attend meetings. The Committee met three

times during FY2022 and on two of these occasions, as a

safeguard, the Committee members also had discussions

with the external auditor without the Executive Directors

or Senior Management team being present.

All Committee meetings are held to coincide with

keydates within the ﬁnancial reporting and audit cycle.

AsChair of the Audit & Risk Committee, I also meet

with the Chief Financial Ocer regularly and wider

management on an ad-hoc basis.

I would like to thank the Committee members, the

executive management team and our external auditors

for the open discussions that have taken place at our

meetings and the importance they all attach to its work.

Committee competence and governance

The Committee operates within its terms of reference,

which are reviewed by the Board on an annual basis.

The terms of reference set out the membership and

experience requirements of the Committee. These

documents are available to view on the Company’s

website or on request by contacting the Company

Secretariat (details of which are shown on page 203).

The Board and Committee have focused on the

governance requirements regarding the Annual Report

and Financial Statements/Accounts. We consider

that, taken as a whole, the FY2022 Annual Report and

Accounts is fair, balanced and understandable, with

appropriate references being made throughout the

various sections, which we hope you will ﬁnd helpful in

understanding the information and disclosures contained

within the Annual Report.

The Board is also satisﬁed that the members of the

Audit & Risk Committee have both recent and relevant

breadth of knowledge, experience and ﬁnancial dynamics

to eectively fulﬁl their responsibilities, as well as

competence relevant to the sector in which the Group

operates. The Directors’ summary biographies can be

found on pages 92 and 93 of this report.

Audit & Risk

Committee report

Clive Watson

Chair of the Audit & Risk Committee

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 105

Role and responsibilities

The role of the Committee is to assist the Board in

fulﬁlling its responsibilities by monitoring and reviewing:

• The integrity and compliance of the ﬁnancial and

narrative information provided to shareholders,

including the strategic report, ﬁnancial results,

announcements, viability statement, Task Force for

Climate-related Financial Disclosures (TCFD) reporting

and ﬁnancial statements

• The appropriateness of accounting policies and the

supporting key judgements and estimates

• Whether the Annual Report and Accounts, taken

asa whole, is fair, balanced and understandable, and

provides the information necessary for shareholders

to assess the Company’s position and performance,

business model and strategy

• The eectiveness of the Group’s internal ﬁnancial

controls and system of internal control and risk

management, including the identiﬁcation of principal

and emerging risks and their mitigation and the

requirement for a formal internal audit function

• The eectiveness of the external audit process and

external auditors, making recommendations to the

Board about the appointment, re-appointment or

removal, and approving the remuneration, the terms

ofengagement, performance, expertise, independence

and objectivity, along with the eectiveness of

itsscope

• The processes for compliance with laws, regulations

and ethical codes of practice including procedures for

detecting, monitoring and managing the risk of fraud

and the adequacy and security for its employees in

relation to whistleblowing (details of which are shown

on page 77)

Key matters considered and activities

duringtheyear

The Committee received reports from the external

auditors for the ﬁnancial year and reviewed the major

ﬁndings of their work.

It also considered the results of the internal review

process (‘health checks’) carried out as part of the

cycle(more details of this process are given in the

section‘internal audit’ on page 108 below).

In addition, we have focused on the integrity,

completeness and clarity of ﬁnancial reporting, the

areaswhere judgements and estimates are required in

the ﬁnancial statements and the quality and eectiveness

of audit processes to complement the other risk

management activities.

In light of the government’s white paper ‘Restoring trust

in audit and corporate governance’ and the continued

roll-out of Project Atlas, the Committee has overseen

an in-depth review of the Group’s risk management and

internal control framework. This process has further

developed the Group’s risk management framework and

resources, with an initial focus on enhanced identiﬁcation,

documentation and mitigation of the Group’s principal

risks and uncertainties.

The Committee regularly reports to the Board on how it

has discharged its responsibilities.

The prime areas of focus were:

• The integrity, completeness and consistency of

ﬁnancial reporting and disclosures

• The areas where signiﬁcant judgements and estimates

are required in the ﬁnancial statements (during the year

end, at and post the balance sheet date)

• The materiality level to apply to the audit

• Whether the going concern basis of accounting should

continue to apply in the preparation of the annual

ﬁnancial statements

• The appropriateness of the bases of disclosure in the

Company’s viability statement

• The appropriateness of transactions separately

identiﬁed and disclosed to highlight the underlying

performance for the periods presented in the

ﬁnancialstatements

• The appropriateness of transactions presented in

Alternative Performance Measures (APMs) to compare

relevant results for the periods presented in the

ﬁnancial statements

• The key assumptions, judgements and estimates as

detailed in note 30 to the ﬁnancial statements

106 Trifast plcAnnual Report for the year ended 31 March 2022

Audit, risk and internal control

Audit & Risk

Committee report continued

External auditor

The Annual Report and Accounts have been audited by

BDO, who were appointed as auditor in November 2019

and Anna Draper has been the Group Audit Partner since

appointment. This appointment is subject to ongoing

monitoring and will run for a maximum of ten years

beforebeing required to be put out to tender.

One of the primary responsibilities of the Committee is

to assess the eectiveness of the external auditor and to

make recommendations to the Board in relation to the

appointment, re-appointment, or removal of the external

auditor. The Committee reviewed the eectiveness and

performance of BDO with feedback from Committee

members, senior executive management and ﬁnance

personnel, covering overall quality, independence and

objectivity, business understanding, technical knowledge,

responsiveness and cost eectiveness (more details of

this process are given in the section ‘Annual evaluation of

the Audit & Risk Committee and the external auditor’ on

page 107 below).

The external audit is a continuous process. At the

startof the audit cycle, BDO present their audit strategy,

identifying their assessment of the key signiﬁcant risks

for the purposes of the audit and the scope of their work.

ForFY2022 these risks continued to be the recoverability

of customer-speciﬁc inventory, goodwill impairment,

going concern, revenue recognition and management

override. In addition, the TR Falcon acquisition accounting

will be reviewed as the transaction occurred during

FY2022. More detail is set out in BDO’s report on

pages134 to 141.

Viability statement, going concern

andprincipalrisks

Our viability statement, set out on pages 64 and 65,

details how we have assessed the prospects of the Group

over a three-year period and why we consider that period

is appropriate. After considering the risks identiﬁed and

on the basis of the assessments completed, the Board

and the Committee believe that there is a reasonable

expectation that the Company will be able to continue

tooperate and meet its liabilities as they fall due over

thenext three years.

The assessment of going concern involves a number

ofsubjective estimates including forecast revenues and

proﬁtability, changes in working capital and the impact

of inﬂationary pressures and supply chain challenges.

The Committee has been actively involved in the regular

review and approval of these forecasts and, because

of that work, is satisﬁed that the going concern basis

of preparation remains appropriate for the Group and

theCompany.

TCFD, which consider the risks and opportunities the

business faces as a result of climate change, have also

been reported for the ﬁrst time in this Annual Report.

More information concerning the viability and going

concern statements, and the TCFD reporting, can be

found on pages 64 and 99 and 86 respectively and within

the principal and emerging risks and uncertainties on

pages 62 to 64.

The Committee concluded that there was a continuing

need to focus on two of the principal risks arising from

the ﬁnancial statements which would require further

consideration during the year:

Recoverability of customer-speciﬁc inventory

The Group has bespoke customer-speciﬁc products for

which there is a risk over recoverability if any contractual

obligations to acquire outstanding stock are waived for

commercial reasons or the customer experiences ﬁnancial

distress. Given the size of the customer-speciﬁc inventory

balance, and the complexity involved in estimating

customers’ changes in future demand, there is a risk that

the valuation of the inventory provision is inappropriate.

The Committee is satisﬁed that sucient focus is

given to this whole area and that provisions made for

customer-speciﬁc inventory are adequate.

Goodwill impairment

Goodwill in the Group balance sheet is signiﬁcant and

subject to an annual impairment test and ongoing reviews

to identify indicators of impairment. The recoverability

of goodwill is dependent on estimating both cash ﬂows

and appropriate discount rates to apply in a value in use

calculation. Given the size of the goodwill balance, and

the complexity of estimating both cash ﬂows and discount

rates, the Committee considers goodwill impairment to be

an area of material estimation. Hence there is a risk that

the valuation of goodwill is inappropriate. The Committee

has reviewed the projected cash ﬂows and discount rates

used in the valuation model and the disclosures provided

in note 13 of the ﬁnancial statements.

Non-audit services provided by BDO

To ensure the independence and objectivity of

the external auditor, the Committee has a policy

which provides clear deﬁnitions of services that the

external auditor can and cannot provide. The policy

also establishes a formal authorisation process,

includingeither the tendering for non-audit services or

pre-approval by the Committee, for allowable non-audit

work. The fees in relation to non-audit services are found

in note 5 of the Annual Report.

The Group retains the services of another professional

services ﬁrm to advise on tax compliance and

advisoryservices.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 107

Annual evaluation of the Audit & Risk Committee

and the external auditor

As part of its annual Board eectiveness, an evaluation

of both the Audit & Risk Committee and external auditor

was conducted during FY2022. For the external auditor,

the review process was conducted primarily by way

of an online questionnaire and was completed by the

Committee members and other Senior Management

who are engaged in the audit process. As a result

of this process, the Committee and the Board have

concluded that BDO provides an eective audit and have

recommended their re-appointment at the 2022 AGM

(more details can be seen in the section ‘External auditor’

on page 106 above).

The evaluation of the Audit & Risk Committee was also

conducted by way of an online questionnaire, completed

by all Board members. The review indicated that the

Committee is operating eectively and that the Board

is satisﬁed that, as Chair of the Committee, I hold the

relevant ﬁnancial experience and that the Committee as a

whole has competence relevant to the sector in which the

Group operates.

Risk management and internal control

The Board is ultimately responsible for the system

ofinternal control and for reviewing its eectiveness.

Thesystem of internal control is designed to manage,

rather than eliminate, the risk of failure to achieve

strategic business objectives and can only provide

reasonable, and not absolute, assurance against

materialmisstatement or loss.

The Corporate Governance Code, along with the

FRC’sguidance on risk management, internal control,

and ﬁnancial and business reporting, requires that the

Board monitors the Company’s risk management and

internal control systems and, at least annually, undertakes

a review of their eectiveness which should cover all

material controls including ﬁnancial, operational and

compliance controls.

Having done so, the Committee is of the view that the

ongoing process for identifying, evaluating and managing

signiﬁcant risks is appropriate.

As highlighted in last year’s Audit & Risk Committee

report, one of the Committee’s key areas of focus

forFY2022 was to instigate an in-depth review of the

Group’srisk management and internal control framework.

During the year, and following the transition into role

of a new Global Head of Risk, an in-depth review of the

Group’s risk management and internal controls framework

was completed. This review focused primarily on the

following areas:

• Review of existing risk management and internal

control activities

• Enhancements to risk management structure

andreporting

• Comprehensive review of principal risks and

uncertainties

• Increased interaction/ownership of risk at OEB

andbusiness function level

• Identiﬁcation of key activities for ongoing

frameworkdevelopment

The Committee looks forward to the continued

development of this important area of the business.

Operating policies and controls are in place and have

been in place throughout the year under review and

cover a wide range of issues including ﬁnancial reporting,

capital expenditure, information technology, business

continuity and management of employees. Detailed

policies ensure the accuracy and reliability of ﬁnancial

reporting and the preparation of ﬁnancial statements,

including the consolidation process.

The key elements of the Group’s ongoing processes are:

• A review of the business risks undertaken as part of the

ongoing day-to-day procedures of the business

• An organisational structure with clearly deﬁned lines of

responsibility and delegation of authority

• That Group policies for ﬁnancial reporting, accounting,

ﬁnancial risk management, information security, capital

expenditure appraisal and corporate governance are

documented and well understood

• That detailed annual budgets and rolling forecasts

are reported for all operating units and reviewed and

approved by the Board

• That performance is monitored closely against budget

and material variances reported to the Board

• That the Committee is to deal with any signiﬁcant

control issues raised by the auditor

• That a formal schedule of matters speciﬁcally reserved

for decisions by the Board is maintained

• That capital expenditure is controlled by the budgetary

process with authorisation levels in place

There were no signiﬁcant control deﬁciencies identiﬁed

during the year.

108 Trifast plcAnnual Report for the year ended 31 March 2022

Audit, risk and internal control

Audit & Risk

Committee report continued

Internal audit

A formalised internal review process, where all business

units are the subject of a ‘health check’ on a rotational

basis, has been in operation for some years. During

FY2023, this process will continue to be developed in

line with the roll-out and post-implementation stage of

ProjectAtlas.

The reviews, covering both operational and ﬁnancial

controls, are performed by senior Group ﬁnance and

other personnel from Head Oce who are separated

fromthe day-to-day activities within the entity which is

the subject of the review. All health checks are presented

by the Chief Financial Ocer to the Audit & Risk

Committee and remedial actions agreed. Whilst the Board

recognises that ‘health checks’ do not constitute a fully

independent internal audit, it believes that due to the size

of the Group, and the improvements that have been and

continue to be implemented, this provides appropriate

comfort as to the operational and ﬁnancial controls in

place at this point in time. In due course, we expect the

formation of a more formal internal audit function to

form an integral part of the ongoing development of the

Group’s risk management and internal control framework.

As a ﬁrst stage of this process, the Group has recruited

additional resource in the ﬁrst half of FY2023.

Fair, balanced and understandable

One of the key governance requirements of the

Committee is for the Annual Report and Accounts,

takenas a whole, to be fair, balanced and understandable.

The Group has established a formal process for ensuring

that this is the case, with clearly deﬁned and delineated

areas of responsibility for the various sections in the

Annual Report recognising the distinctive roles of the

preparers and the reviewers. The Directors acknowledge

their responsibility for preparing the FY2022 Annual

Report and Accounts and conﬁrm that they consider

this document, taken as a whole, to be fair, balanced and

understandable and provides the information necessary

for shareholders to assess the Group’s position and

performance, business model and strategy.

Committee focus for FY2023

Following the in-depth review of the risk management

and internal control framework performed during FY2022,

referred to earlier, speciﬁc focus in the year ahead will

be given to enhancing the identiﬁcation, documentation

and mitigation of the Group’s wider strategic, operational

and ﬁnancial risks. This activity will be supported by

additional investments in resource and software and the

development of an internal communications strategy

speciﬁcally designed to further embed risk management

into the business. The Committee looks forward to

reporting on the outcome of this in due course.

Clive Watson

Chair of the Audit & Risk Committee

25 July 2022

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 109

Remuneration

Committee composition and attendance

Remuneration Committee attendance

Claire Balmforth

Scott Mac Meekin

Clive Watson

Jun

Nov

Mar

Introduction

On behalf of the Remuneration Committee (the

‘Committee’), I am delighted to present the Directors’

remuneration report for the year ended 31 March 2022.

At our 2021 AGM, the Committee was very pleased to

see that the Directors’ remuneration report was passed

with 94.9% support from shareholders. We also noted

the feedback received from shareholder representative

bodies regarding the potential rebalance of Executive

Director remuneration and the alignment of pension

contribution rates – both these topics are addressed this

year. The Committee would like to thank shareholders for

their support at the AGM.

This report has been prepared by the Committee in

accordance with the relevant legal and accounting

regulations and has been approved by the Board.

Role and activities of the Committee

The primary role of the Committee is unchanged, which is

to provide our Executive Directors with remuneration that

motivates and aligns them with delivery of our strategy

and creates shareholder value in a sustainable manner.

In addition, it is our duty to ensure that the remuneration

received by the Executive Directors is proportionate to

the performance achieved and the returns received by

shareholders. Since our last report, the main activities

ofthe Committee were as follows:

• Continue to monitor the Company’s response

to Covid-19 and the impact on its remuneration

arrangements

• Determination of the ﬁnal remuneration outcomes for

the year to 31 March 2022

• Discuss and approve changes to the Executive

Director remuneration packages for FY2023, including

consideration of the alignment of pension contribution

rates with the wider workforce

• Calibrating the appropriate incentive targets for the

FY2023 annual bonus, including ESG-based targets

and LTIP awards

• Oversight of the remuneration aspects of Senior

Management and wider workforce pay and policies

• Consideration of our gender pay reporting summary

• Review and minor amendment of the Remuneration

Committee’s terms of reference

There were no changes to the Committee’s membership

during the year.

Directors’

remuneration

report

Claire Balmforth

Chair of the Remuneration Committee

The Committee was very

pleased to see that the

Directors’ remuneration

report was passed

with 94.9% support

from shareholders

110 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Directors’

remuneration report continued

Company performance in the context of Covid-19

In FY2022, the Group’s priority was to look after our

people and thereafter customers, suppliers and other

communities. To meet our current and future challenges,

the Board has focused our proven management team on

the delivery of strong organic and overall performance,

including maximising the ROI from Project Atlas.

After experiencing dicult market conditions in recent

years, we were delighted to see further signs of recovery.

FY2022 has been a story of strong recovery and solid

growth, with revenues ending 16.2% up on FY2021 and

ahead of the FY2020 pre-Covid-19 comparative period.

Wehave seen high demand across all our key sectors, for

example light vehicle sector growth outpacing global light

vehicle production to record 7.4% growth at CER despite

the well-publicised semi-conductor shortages.

Reﬂecting the strong recovery, our underlying PBT is up

29.2% at CER to £14.2m. This, coupled with a reduction

in our underlying eective tax rate, has resulted in an

increase in our underlying diluted earnings per share

(EPS) at AER, up 30.3% to 8.13p.

As well as an improved ﬁnancial performance, the Group

has also achieved several strategic milestones during the

year, including:

• Successful go-live of a further two sites under

ProjectAtlas, and demonstrable beneﬁts starting

tocome through

• A ﬁrst step on our ambitious North America acquisition

journey through the purchase of Falcon

• Developed a clear ESG strategy for the next ﬁve years.

More details can be found in the 2021 Sustainability

Report published alongside the 30 September 2021

interim report

The improvement in performance allowed the Board

to propose an increased dividend of 2.10p in respect of

FY2022. The Group also paid a full-year dividend of 1.60p

per share for FY2021.

As the Group overcame the impact of the pandemic,

UK government support received in FY2022 was only

in relation to a very small number of employees who

remained on furlough for part of the year. This resulted

ina non-material amount of £8,498 being accessed

under the UK government’s Coronavirus Job Retention

Scheme, equivalent to <0.1% of underlying operating

proﬁt. Therewere also no redundancies made during the

year as a result of Covid-19 and the Company continues

toincrease base salaries for all employees.

FY2022 remuneration outcomes

Annual bonus

The Remuneration Committee is aware of the

sensitivebalance between retaining and motivating

the management team and corporate governance best

practice when determining annual bonus outcomes.

Therefore, when assessing whether to pay a bonus this

year, it considered:

• That no bonus payments had been made for

threeyears

• Overall corporate performance

• Trifast received a small amount of government support

as a result of Covid-19, and investor sentiment around

bonus payments in such scenarios

Taking all this into account and considering that the UK

Covid-19-related payments received had been adjusted

for and reduced the payout of the proﬁt-based element,

the Committee felt that it was appropriate to pay a bonus

of 23.7% of maximum to the Executive Directors in respect

of FY2022.

Targets for the FY2022 bonus were based 70%

onunderlying organic operating proﬁt, 20% on

cashconversion rate and 10% on strategic/operational

targets,with a maximum opportunity of 150% of salary.

The Committee conﬁrms that no performance target has

been adjusted in the year because of the pandemic or any

other reason.

Notwithstanding the challenging targets and continued

dicult trading environment, the underlying organic

pre-IFRS 2 operating proﬁt measure was achieved at just

ahead of threshold, as the outcome of £15.1m (reduced

for UK government support received) just exceeded the

threshold target of £15.0m, resulting in 26.7% of maximum

payout for this element. However, the cash conversion

threshold level of performance was not achieved so there

was no payout under this element.

As the threshold underlying operating proﬁt target

was achieved, the Committee was able to assess

performance against the strategic/operational measures.

It determined that the payout would be 50% of maximum

reﬂecting the strong strategic progress, in relation to

the ESG sustainability report publication, made during

FY2022(full details of these assessments are set out

onpages 124).

In total, the overall bonus payout was 23.7% of maximum

and 35.5% of salary for both Executive Directors, versus a

maximum opportunity of 150% of base salary.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 111

In determining the payouts under the annual bonus

for the Executive Directors, the Committee has been

mindful not only of the formulaic outcome against the

targets set, but also of the underlying performance of the

business. Speciﬁcally, the Committee took account of the

followingfactors:

• The Company achieved an improved set of ﬁnancial

results with year-on-year growth in sales and

underlying operating proﬁt

• The Company paid its ﬁnal dividend for FY2021 to

shareholders, with the proposed full-year dividend

forthe year ended 31 March 2022 increasing by 31.3%

to 2.10p

• The Group-wide bonus pool has increased by 83.8%,

reﬂecting the superb work of all our colleagues

• Development of a ﬁve-year sustainability strategy

On this basis, the Committee felt comfortable that

the formulaic bonus outcome reﬂected the individual

Executive Director and Company performance and,

asaresult, determined that no overriding discretion will

be applied to the bonus outcome. Given that the bonus

payout is relatively modest, it is the ﬁrst such payment

forfour years and in line with policy it will be paid in cash.

Long-Term Incentive Plan (LTIP)

Vesting

The three-year performance period of LTIP awards

granted to the Executive Directors during FY2020 ended

on 31 March 2022. Performance was below the threshold

level against the EPS (70% weighting) and relative

TSR (30% weighting) targets, resulting in nil vesting.

The Committee acknowledged that the targets were

demanding given they were based o Trifast’s exceptional

FY2019 performance. Full details of Trifast’s performance

against the LTIP targets is provided on pages 125 and 126.

Grant

The Committee made a grant of LTIP awards under the

Directors’ Remuneration Policy on 3 August 2021. In line

with policy, the awards had a face value of 175% of base

salary, a three-year vesting period and are subject to a

two-year post-vesting holding period. Theperformance

conditions attached to the awards were underlying

diluted EPS growth (70% weighting) and relative TSR

(30% weighting). The Committee will have overriding

discretionto change the formulaic outcome (both

downwards and upwards) if it is out of line with the

underlying performance of the Company and this will

include an assessment of whether any windfall gains

havebeen made.

The EPS growth target at threshold performance is

16%p.a. and 37% p.a. at the maximum performance.

Thevesting schedule is a graduated curve with a greater

level of stretch towards the upper end of the vesting

range to reﬂect aspirational performance. The relative

TSR targets remain unchanged. TheCommittee is

comfortable that the performance measures remain

appropriate and that the targets are challenging

given the current economic conditions. Full details

ofthe performance targets can be found in the

annualreportonremuneration on page 126.

Overall

The Committee noted that the FY2020 LTIP

outcomewas aligned with Company performance

as well as shareholders’ experience. Despite there

being no LTIP vesting, the Committee is comfortable

that a modest payout under the annual bonus

acknowledged the management team’s resilience and

their strong performance on progressing the Group’s

strategicpriorities.

The Committee is comfortable that the current policy

operated as intended and that the overall FY2022

remuneration paid to Executive Directors was appropriate.

Therefore, the Committee did not exercise any discretion.

112 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

FY2022 remuneration outcomes continued

Wider workforce considerations

The progress of the Company over several years would

not have been possible without developing all our people,

which includes formal training, full support and incentives

to perform to the best of their abilities. We recognise that

it is also critical for our colleagues to feel valued as well as

to be paid fairly.

The current focus in relation to engagement has

continued to centre around communicating regularly with

our employees throughout the pandemic and conducting

regular employee surveys. Our surveys focus on our

culture and the wellbeing of employees.

I am pleased to report that our approach to engagement

has allowed our employees, through both surveys and

personal visits by our NEDs, to discuss a wide range of

subjects including leadership, capacity, communication,

work life balance and hybrid/ﬂexible working polices,

strategic direction, learning and development, culture and

values. In addition, we carry out a regular benchmarking

exercise to ensure pay remains fair for all. Read more

about our employee engagement on page 68.

We also published our ﬁfth gender pay gap report

inMarch 2022 (relating to the report for April 2021).

Wewere encouraged to see that our median gender

pay gap of +7.0% (i.e. our female employees are paid

7.0% more than our male employees) and the median

bonus gap ofnil demonstrates that Trifast is an equal

opportunities organisation. We are proud that we have

bonus schemes covering all employees. Our gender

pay gap report can be found on our corporate website

at www.trfastenings.com and extracts have been

providedon pages 78 and 79.

We continue to be committed to creating an inclusive

working environment and to rewarding all our employees

in a fair manner and believe they should be able to share

in the success of the Company. To facilitate this, we

operate a popular Save As You Earn (SAYE) share plan

which is open to all UK employees and are delighted that

so many of our UK employees are currently enrolled.

Wider share ownership also aligns with our remuneration

principles by rewarding our employees for the successful

execution of strategy. Our long-term equity scheme was

expanded for Directors and Senior Managers in FY2020

and now has c.120 participants and I am pleased to report

that we made a further grant of awards in August 2021,

which is subject to the same EPS performance condition

as the Executive Directors’ LTIP awards.

Implementation of remuneration policy

forFY2023

Overall approach

The Committee is sensitive to the challenges faced by

our stakeholders at present but also recognises the

importance of retaining and incentivising our strong

management team. Therefore, the Committee believes

that Executive Director pay should be competitive against

the market, reﬂecting the transformation of the business

(with the associated beneﬁts of Project Atlas) and the

complexities of running an international company.

As set out in our FY2020 and FY2021 remuneration

reports, the Committee signposted a move of all

elements of remuneration to the median of those

of theFTSE Small Cap Index as this represented

anoverallcompetitivepackage.

The Committee’s original intention was a staged

rebalance over FY2022 and FY2023, but after careful

consideration, the Committee, with the support of the

Executive Directors, decided that this should be delayed

until FY2023. Given the improved Company performance

set out in this Annual Report and extensive strategic

progress made over the past two years, the Committee

feels the time is right to make changes to the Executive

Directors’ remuneration packages as set out below.

Fixed pay – salary

The CEO’s salary increased by 26% to £400,000

andthe CFO’s salary increased by 27% to £308,000

from 1April2022. The increases position the CEO at just

abovethe lower quartile and the CFO at the median of the

FTSESmall Cap Index. The Committee acknowledges that

these increases are above those provided to the wider

workforce in FY2023, but is comfortable they are justiﬁed

and are necessary to retain and motivate the Executive

Directors given:

• The strategic progress made through Project Atlas

• The signiﬁcantly improved Company performance over

FY2022 and continued individual performance of the

Executive Directors

• The improved alignment of Executive Directors’ salary

market positioning with that of the wider workforce i.e.

broadly median

Further increases will be considered for the CEO in the

future to position him closer to the median, if they are

warranted based on individual and Company performance

and the continued successful execution of Project Atlas.

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 113

Fixed pay – pension

In line with our commitment in the FY2021 remuneration

report, the Committee reviewed the alignment of the

Executive Directors’ pension contribution rates with the

wider workforce. I am pleased to report the Committee

approved the reduction of Executive Director pension

contributions rates to 5% of salary, which is the rate

available to the majority of the workforce. In addition,

withthe agreement of the Executive Directors, the

reduction was implemented on 1 April 2022.

Fixed pay – overall

The Committee notes that overall, the Executive Directors’

ﬁxed pay will increase by c.10% for FY2023, which is

aligned with the 10% salary increase provided to Senior

Management and is just above the 7% UK wider workforce

salary increase.

Incentive awards

Given our changes to the level of ﬁxed remuneration, the

Committee has reviewed incentive opportunity levels to

address the multiplier eect on overall remuneration of

these signiﬁcant but necessary salary increases.

Annual bonus

The Committee determined to maintain the maximum

annual bonus opportunity at 150% of salary for the CEO

and CFO, which is consistent with the market range for

comparable sized companies. The performance measures

for the annual bonus also remain unchanged, with 70%

based on underlying organic operating proﬁt, 20% on

cash conversion rate and 10% on strategic/operational

targets. In FY2023, these will include ESG-based

strategic/operational targets.

Performance targets set by the Committee will be

challenging but with an appropriate probability of payout

and disclosed in detail in next year’s remuneration report.

Any bonus payable above 100% of salary will be deferred

into shares for three years.

LTIP

The Committee determined to bring the LTIP opportunity

more in line with the market range for comparable sized

companies and has reduced the LTIP opportunity by 25%

of salary to 150% of salary for both Executive Directors

to address the multiplier eect of the salary increases

as noted above. The Committee believes that an LTIP

award of 150% is an appropriate incentive opportunity

to closely align the interests of management with those

of shareholders over the longer term and to focus

management on driving performance. The FY2023 LTIP

for Executive Directors will have the same structure and

performance conditions as the awards granted in FY2022.

Despite the award level being reduced, the targets

for the FY2023 LTIP remain challenging. They were

calibrated such that signiﬁcant EPS growth is required

for both threshold performance (9% p.a.) and maximum

performance (29% p.a.). The relative TSR targets remain

unchanged. Please see page 116 for further details of the

performance targets.

Shareholder engagement

On the basis that the Committee has signposted the

Executive Director package rebalance in previous reports,

it did not feel that a formal engagement process was

necessary in this instance. However, as Committee Chair,

I have written to shareholders setting out the rationale

for the rebalance and our actions to mitigate against the

multiplier eect of the material base salary increases.

Looking ahead

Our strategy continues to be to grow organically and

byacquisition.

The Committee is comfortable that the operation of the

remuneration policy in FY2022 and its implementation

for FY2023 are in line with the best interests of the Group

and will incentivise and retain those team members who

are critical to executing our business strategy and driving

the long-term creation of value for shareholders. We look

forward to your support for the advisory vote on the

annual report on remuneration at the forthcoming AGM.

Finally, I want to recognise that the Company’s

achievements would not have been possible without

the resilience and ﬂexibility shown by our employees

during these unprecedented times. Our employees have

been working extremely hard to support our customers

throughout the pandemic. To all colleagues – thank you

for your hard work and commitment to the business,

and support given to colleagues and customers, which

ismaking Trifast the robust business it is today.

Claire Balmforth

Chair of the Remuneration Committee

25 July 2022

114 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration

This section of the remuneration report contains details as to how the Company’s remuneration policy was

implemented during FY2022. The Committee is satisﬁed that the policy operated as intended in FY2022 and its

implementation did not deviate from the approved policy. It also covers how policy will be implemented in FY2023.

Inthe ﬁrst part of this report, we have also set out information with regard to our wider workforce and pay fairness.

Pay at Trifast

To attract and retain high-calibre individuals, we aspire to become an employer of choice within our sector, maintaining

a competitive reward package that balances fairness to our colleagues as well as responsible use of shareholders’

funds. Our pay principles are as follows:

• Support the recruitment and retention of high-quality colleagues

• Enable us to recognise and reward colleagues appropriately for their contribution

• Help to ensure that decisions on pay are managed in a fair, just and transparent way

• Create a direct alignment between our Company culture and our reward strategy

Through the application of these principles, the Company has continued to attract industry specialists with global

experience at senior levels.

How the Committee is informed on wider workforce pay

To build the Remuneration Committee’s understanding of reward arrangements applicable to the wider workforce,

the Committee is provided with data on the remuneration structure for management level tiers below the Executive

Directors and pay outcomes for these roles. The Committee has developed a process whereby it will be provided

with feedback from the Company’s various engagements tools, such that it has access to further context in making

decisions on future pay outcomes. This information is combined with the insights gained by Jonathan Shearman,

who is the designated Non-Executive Director for sta engagement. The Committee uses this information to ensure

consistency and fairness of approach throughout the Company in relation to remuneration.

Summary of the approved Directors’ Remuneration Policy

The key elements from the Directors’ Remuneration Policy approved at the 22 September 2020 AGM, and how it will be

implemented for FY2023, are summarised below in line with the Executive Directors’ package rebalance set out in the

Chair’s statement. The Committee does not intend to deviate from the approved policy in FY2023.

The full policy can be found on the Trifast website at www.trifast.com/investors/governance/remuneration-policy.

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 115

Element Policy summary Implementation for FY2023

Base salary Base salary is reviewed annually by the Committee and

determined on 1 April each year. The Committee will target

median salaries within FTSE Small Cap Index companies.

Salary increases for Executive Directors will not normally

exceed the average increase which applies across the wider

Trifast UK employee population. Larger increases may be

awarded in certain circumstances, including where Project

Atlas implementation has progressed, and key milestones

havebeenachieved

The Committee also considers the impact of any base salary

increase on the total remuneration package

The CEO’s and CFO’s salary for FY2023

increased by 26% and 27% respectively.

Theincreases position the CEO at just above

the lower quartile and the CFO at the median

of the FTSE Small Cap. The Committee

is comfortable the increases are justiﬁed

and necessary to retain and motivate the

Executive Directors given:

• The strategic progress made through

Project Atlas

• The signiﬁcantly improved Company

performance over FY2022 and continued

excellent individual performance of the

Executive Directors

• The improved alignment of Executive

Directors’ salary market positioning

with that of the wider workforce i.e.

broadlymedian

Taken in aggregate with the reduction in

pension set out below, ﬁxed pay for the

Executive Directors increased by c.10%,

which is aligned with the 10% salary increase

provided to Senior Management for next

year and just above the 7% UK wider

workforce salary increase

Further increases will be considered for

the CEO in the future to position him closer

to the median, if they are warranted by

individual and Company performance and

the continued successful execution of

Project Atlas

FY2023 salaries are therefore as follows:

• Mark Belton (CEO): £400,000

• Clare Foster (CFO): £308,000

Pension and

beneﬁts

See implementation for FY2023 for existing and new Executive

Directors in relation to pension

The Company will provide market-competitive beneﬁts

to Executive Directors and reimburse any necessary and

reasonable business expenses

The Committee reviewed the alignment of

the Executive Directors’ pension contribution

rates with the wider workforce and approved

a reduction to 5% of salary, which is the rate

available to the majority of the workforce.

In addition, with the agreement of the

Executive Directors, the reduction was

implemented on 1 April 2022

No change to beneﬁt provision other than

topension contributions as set out above

Annual bonus Maximum opportunity of 150% of salary. Any bonus in excess

of100% of salary will be paid in shares deferred for three years

Performance measures and their weightings include:

• 70% underlying organic operating proﬁt target

• 20% cash conversion rate targets

• 10% basket of up to two strategic/operational targets.

However, this element will not pay out if threshold operating

proﬁt performance has not been achieved

Payout for threshold performance at 25% of maximum,

andpayout for on-target performance at 50% of maximum

The Committee has overriding discretion to change the

formulaic outcome (both downwards and upwards) if it is

outofline with underlying performance of the Company

In line with policy, the Committee

determined to award a FY2023

bonus to Executive Directors with a

maximum opportunity of 150% of salary.

Performance measures and weightings

and payout schedule will apply as per the

approvedpolicy

Targets are deemed commercially sensitive

and will be disclosed in the FY2023 Annual

Report, although the Committee has

determined that the strategic/operational

element will partially based on ESG

116 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Element Policy summary Implementation for FY2023

Long-Term

Incentive Plan

(LTIP)

Maximum opportunity of 175% of salary

Three-year vesting period plus two-year holding period

Malus and clawback provisions apply

Performance measures and their weightings include:

• 70% EPS

• 30% relative TSR vs. FTSE Small Cap Index (excluding

investment trusts)

25% of the award vests for threshold performance and 100% for

maximum performance

Overriding discretion in line with annual bonus

The Committee determined to bring

the LTIPopportunity more in line with

the market range for comparable sized

companies and has reduced the LTIP

opportunity by 25% of salary to 150% of

salary for both Executive Directors to

address the multiplier eect of the salary

increases. The Committee believes that

an LTIP award of 150% is an appropriate

incentive opportunity to closely align the

interests of management with those of

shareholders over the longer term and to

focus management on driving performance.

Performance measures andweightings will

apply as per the approved policy

Despite the award level being reduced,

the targets for the FY2023 LTIP remain

challenging. They were calibrated such

that signiﬁcant EPS growth is required for

both threshold performance (9% p.a.) and

maximum performance (29% p.a.), with

straight-line vesting in between

The relative TSR target at threshold level is

performance equal to the FTSE Small Cap

Index (excluding investment trusts) and 8%

p.a. in excess of the index for full vesting,

with straight-line vesting in between

Minimum

shareholding

requirement

Shareholding requirement of 250% of salary over ﬁve years

from policy adoption while in employment and requirement to

continue to hold shares equivalent to the minimum of actual

shareholding on cessation of employment and in-employment

shareholding requirement for a period of two years following

termination of employment

Shares beneﬁcially owned and any inﬂight LTIP awards at

the date of adoption of the policy will be exempt from the

post-employment requirement, but all share-based awards

granted under the current policy are captured

The shareholding requirement in FY2023 will

be 250% of salary

Post-employment shareholding requirement

will also apply

Non-Executive

Director fees

It is anticipated that increases to Chair and NED fee levels

will typically be in line with market levels of fee inﬂation

and the increase awarded to the wider workforce. Larger

increases above this may be awarded in certain circumstances,

for example a material change in the time commitment or

responsibilities of the Non-Executive Director

The Company targets FTSE Small Cap median fees

Fees were increased by 5.0% from

1April2022 as follows:

• Chair: £135k

• SID: £6k

• NED: £45k

• Committee chair fee: £8k

• Committee membership fee: £5/8k

Directors’

remuneration report continued

Annual report on remuneration continued

Summary of the approved Directors’ Remuneration Policy continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 117

Linking our remuneration policy with our business strategy

Our remuneration policy has been designed to align with the Group strategy. Below we have set out how each

performance measure within our incentive structure links back to our key objectives.

Investment

for organic

growth

Engineering

led

innovation

Project Atlas Accelerated

acquisition

journey

Sustainability

Our key objectives

Annual bonus LTIP

KSIs

Revenue growth vs GDP

Underlying operating margin

Underlying ROCE

Group revenue in North America

Atlas implementation ( % of employees)

KPIs

Underlying cash conversion ratio

Working capital as a percentage of revenue

Underlying earnings per share (EPS)

Employee engagement Index

EcoVadis rating

• Focus on organic

growth

• Focus on sustainable

investment

• Key measure

ofgrowth

• Focus on sustainable

investment

• Focus on acquisitions

• Focus on sustainable

investment

• Focus on cash ﬂow

management

• Linked to shareholder

value

• Focus on

outperformance

• Focus on organic

growth

• Focus on innovation

• Focus on people/

talent

• Focus on sustainability

• Focus on acquisition

• Linked to

shareholder value

Operating

proﬁt

EPS

growth

Cash

conversion

Relative

TSR

Strategic/

operational

Shareholding

guidelines

Measure Link to strategy Measure Link to strategy

118 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration continued

How the Company addressed factors in Provision 40 of the 2018 UK Corporate Governance Code

The Code requires the Committee to determine the policy and practices for Executive Directors in line with several

factors set out in Provision 40. The following table sets out how our policy aligns with Provision 40 of the Code, the

objective of which is to ensure the remuneration operated by the Company is aligned to all stakeholder interests,

including those of shareholders.

Remuneration factors How the Committee has addressed this in the remuneration policy

Clarity – remuneration arrangements

should be transparent and promote

eective engagement with

shareholders and the workforce

The Company’s performance-based remuneration is based on supporting the

implementation of the Company’s strategy as measured through its core KPIs. There is

transparency over the performance metrics in place for both annual bonus and the LTIP

and there is a clear link between long-term value creation and the provision of reward to

Executive Directors and Senior Management

Simplicity – remuneration structures

should avoid complexity and their

rationale and operation should be

easyto understand

The market standard annual bonus and LTIP structures are well understood by

shareholders and participants alike

Risk – remuneration arrangements

should ensure reputational and other

risks from excessive rewards, and

behavioural risks that can arise from

target-based incentive plans, are

identiﬁed, and mitigated

Identiﬁed risks have been mitigated as follows:

• Deferring bonus into shares and a two-year holding period on the LTIP helps ensure

that the performance earning awards was sustainable and thereby discouraging

short-term behaviours

• Aligning any reward to the agreed strategy of the Company

• Reducing the awards or cancelling them if the behaviours giving rise to the awards are

inappropriate, through malus and clawback

• Reducing annual bonus or LTIP awards or cancelling them, if it appears that the

criteria on which the award was based does not reﬂect the underlying performance

ofthe Company

Predictability – the range of possible

values of rewards to individual

directors and any other limits or

discretions should be identiﬁed and

explained at the time of approving

thepolicy

The Remuneration Committee has good line of sight and control over the potential

performance outcomes, and the actual and perceived value of the incentives

The policy sets out the potential remuneration available in several performance scenarios

Proportionality – the link between

individual awards, the delivery

of strategy and the long-term

performance of the company should

be clear. Outcomes should not reward

poor performance

One of the key strengths of the current approach of the Company to remuneration is the

direct link between the returns strategy and the value received by Executives

The schematic on page 117 sets out in detail the link between Company strategy and a

broadened range of performance measures in the incentive arrangements

Alignment to culture – incentive

schemes should drive behaviours

consistent with company purpose,

values and strategy

The LTIP rewards long-term sustainable performance. This focus on long-term

sustainable value is a key tenet of the Company’s strategy

The inclusion of an ESG based measure in the annual bonus for FY2023 demonstrates the

Board’s determination to drive behaviours in this key area of Company strategy

Alignment between wider workforce pay and Directors’ Remuneration Policy

Trifast aims to provide a remuneration package for all employees which is market competitive and operates a similar

structure as for Executive Directors. The Company’s remuneration philosophy for all employees from the Executive

Directors downwards is that they should have a meaningful element of performance-based pay. For Executive

Directors, the LTIP and part of the annual bonus is provided in shares to ensure a focus on long-term sustainable

value creation and to align their experience with that of shareholders. The Company’s LTIP extends to selected Senior

Management within the Company, with the number of employees eligible to participate being c.120 from across 15

countries. For all employees, Trifast operates a performance-based discretionary bonus scheme. The Company also has

a Save As You Earn scheme (SAYE) for all UK employees in order to increase levels of share-ownership throughout the

Company and allow employees to share in its success.

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 119

The table below illustrates the cascade of our reward structure from Executive Directors to the wider

employeepopulation.

Fixed

remuneration

Annual

bonus LTIP

UK employee

share scheme

(SAYE )

Executive Directors

Y Y Y Y

Senior Management

Y Y Y Y

Wider workforce

Y Y N Y

The Committee is satisﬁed that the approach to remuneration across the Company is consistent with the Company’s

principles of remuneration. In the Committee’s opinion, the approach to executive remuneration aligns with the wider

Company pay policy and there are no anomalies speciﬁc to the Executive Directors.

CEO pay ratio

The table below sets out the ratios of the CEO single total ﬁgure of remuneration to the equivalent pay for the lower

quartile, median and upper quartile of UK employees.

Pay ratio

Year Method

25th

percentile

50th

percentile

75th

percentile

FY2022 Option A 24:1 19:1 13:1

FY2021 Option A 17:1 14:1 9:1

FY2020 Option A 18:1 14:1 10:1

The CEO remuneration ﬁgure is as shown in the single total ﬁgure for Executive Directors’ remuneration table on

page123. The remuneration ﬁgures for the employee at each quartile were determined as of 31 March 2022. Each

employee’s pay and beneﬁts were calculated using each element of employee remuneration, consistent with the

CEO, on a full-time equivalent basis. No adjustments (other than to achieve full-time equivalent rates through simple

proration) were made and no components of pay, except SAYE awards, have been omitted.

Bonus payments included in total pay and beneﬁts for below Board employees are those paid in the year to

31March2022 rather than those earned in the same period.

The salary and total pay and beneﬁts for the employee at each of the 25th, 50th and 75th percentiles are as shown in

the table below:

Pay data

Base salary

£000

Total pay

and beneﬁts

£000

CEO 317 505

Employee at 25th percentile 19 21

Employee at 50th percentile 24 27

Employee at 75th percentile 35 40

We have chosen methodology option A for the calculation, to identify the three UK employees at each of the

quartilesas of 31 March 2022. In line with the regulations, all employees across our four UK subsidiaries were used in

the calculation. This method was chosen given its robustness in determining these three UK employees. The Committee

iscomfortable that the median ratio is consistent with the Company’s pay and progression policies.

120 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration continued

CEO pay ratio continued

The ratios will be used as part of the Committee’s remuneration decision-making process regarding broader employee

pay policies as well as remuneration policies for the Executive Directors. They reﬂect the dierence in remuneration

arrangements as responsibility increases for more senior roles within the Company. There may therefore be signiﬁcant

volatility in this ratio, caused by the following:

• Our CEO pay is made up of a higher proportion of incentive pay than that of our employees, in line with the

expectations of our shareholders, which introduces a higher degree of variability in his pay each year versus that

ofour employees

• A signiﬁcant proportion of our CEO’s pay is provided in shares, and their value reﬂects the movement in share price

over the three years prior to vesting. This can add signiﬁcant volatility to the CEO’s pay and may be reﬂected in the

ratio if the Company meets the respective targets

The FY2022 CEO pay ratios at the 25th, 50th and 75th percentiles are higher than the equivalent FY2021 ratios.

This is primarily a result of the CEO being awarded his ﬁrst annual bonus payout since the introduction of pay ratio

disclosures. The Committee is pleased to note the average increase for UK employees is 7% for FY2023 and the

83.8%increase to the Group-wide bonus pool this year.

Gender pay gap reporting

Trifast is committed to the principle of equal opportunities and equal treatment for all colleagues, regardless of sex,

race, religion or belief, age, marriage or civil partnership, pregnancy/maternity, sexual orientation, gender reassignment

or disability. The Company has concluded that the single most important factor is to identify, recruit and develop

people based on skills and merit. We have a clear policy of paying employees equally for the same or equivalent

work,regardless of their sex (or any other characteristic set out above).

Trifast is therefore conﬁdent that our gender pay gap does not stem from paying men and women dierently for the

same or equivalent work but is instead the result of the roles in which men and women work within the organisation

and the salaries that these roles attract.

Our median gender pay, calculated for TR Fastenings UK, was 7% in favour of women. We are pleased that this remains

signiﬁcantly below the UK average. Please see pages 78 and 79 for our gender pay report.

External benchmarking

The chart below shows the relative positioning of Trifast’s CEO and CFO in relation to the percentiles of the FTSE Small

Cap Index. The chart is based on the Executive Directors’ FY2023 remuneration opportunity.

100

Base salary

Mark Belton (CEO)

Percentile

Clare Foster (CFO)

Total target

remuneration

Base salary Total target

remuneration

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 121

Remuneration justiﬁcation

The Committee is comfortable that the internal and external pay relativity reference points set out above provide

justiﬁcation that the remuneration arrangements for Executive Directors are appropriate and illustrate the suitability

of the changes being made to rebalance the package from the start of FY2023 as set out in the Committee

Chair’sstatement.

How executive remuneration is communicated with stakeholders – shareholders and employees

It is the Committee’s experience that stakeholders ﬁnd the remuneration information they believe to be relevant to

them via the Annual Report (available in hard copy and on the website). Shareholders can liaise with the Committee

Chair throughout the year, including at the time of the AGM.

The Committee engaged with its largest shareholders and the investor representative bodies in relation to the current

remuneration policy during 2020. As set out in the Committee Chair’s statement, the Committee has also written to

shareholders setting out the rationale for the Executive Director package rebalance and our actions to mitigate against

the multiplier eect of the material base salary increases disclosed in this report.

The Company’s approach to engagement has also allowed our employees to discuss a wide range of subjects,

as detailed on page 68 with our designated people NED, Jonathan Shearman and Non-Executive Director, Clive

Watson. This engagement has helped the Company to review resource capacity and develop a strategy for improving

communication. See page 68 for further information on employee engagement.

CEO and all-employee pay

Total shareholder return

The graph below sets out the total shareholder return performance of the Company compared to the FTSE Small Cap

Index and FTSE All-Share Industrial Engineering Index over a ten-year period from 31 March 2012. The Remuneration

Committee believes it is appropriate to monitor the Company’s performance against these indices as the Company is

aconstituent of both.

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Trifast

100

200

300

400

500

600

700

FTSE Small Cap IndexFTSE All-Share Industrial Engineering Index

TSR rebased to 100 on 31 March 2012

122 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration continued

Performance and pay

The table below shows the single ﬁgure of remuneration and levels of bonus and equity payouts for the Group CEO

during the past ten years:

Financial year

Total single

ﬁgure of

remuneration

£000

Annual cash

bonus

payout

against

maximum

Equity

award

payout

against

maximum

2022 505 23.7 % 0%

2021 366 n/a 0%

2020 383 0% 0%

2019 367 0% n/a

2018 629 70% n/a

2017 811 100% 100%

2016 641

50% 100%

2015 766 100% 100%

2014 643 80% 100%

2013 1,263 30% 100%

1. Includes a full year of CEO remuneration; including remuneration paid to JC Barker for 1 April 2015 to 30 September 2015 and

remuneration for MR Belton from 1 October 2015 to 31 March 2016

2. This is the vesting of the deferred equity awards under a previous policy

3. This was a year considered as part of the performance period for the 2009 option scheme

Percentage change in Directors’ remuneration compared to employees

The table below compares the percentage increase in each Director’s pay with the average pay of the Company’s

colleagues in the listed entity on a full-time equivalent basis.

% change from 2021 to 2022 % change from 2020 to 2021

Salary/

fees

Taxable

beneﬁts

Annual

bonus

Salary/

fees

Taxable

beneﬁts

Annual

bonus

Mark Belton (CEO)

7.1% 33.0% n/a

(4.6)% 0% n/a

Clare Foster (CFO)

7.1% 33.0% n/a

(4.6)% 0% n/a

Jonathan Shearman (NED and Chair)

7.1% n/a n/a

216.0% n/a n/a

Clive Watson (Senior Independent NED)

55.0% n/a n/a

n/a n/a n/a

Scott Mac Meekin (NED)

6.3% n/a n/a

(4.6)% n/a n/a

Claire Balmforth (NED)

5.7% n/a n/a

n/a n/a n/a

Average employee

6.5% 7. 5% 592.0%

11.3% 19.3% (61.1)%

1. Jonathan Shearman was appointed as Chair of the Board on 1 April 2020. Therefore, the increase in fees between 2020 and 2021

set out above reﬂects the change from his previous role as NED and Remuneration Committee Chair. It should be noted that on

appointment as Chair of the Board his fee of £125,000 was the same as his predecessor’s FY2020 fee

2. Appointed to the Board 30 July 2020. The increase reﬂects the fact that Clive Watson only served for 8 months as a Director

duringFY2021

3. Appointed to the Board 1 April 2020

4. Salary/fees for Directors who remained in the same role for FY2020 and FY2021 showed a 4.6% decrease between 2020 and 2021

as a result of the 20% reduction in pay taken by the Board in Q1 of FY2021. Therefore the increases between 2021 to 2022 are higher

than the FY2022 salary and fee increases awarded given the temporary reduction in FY2021 pay

5. In line with the regulations, the average employee percentage changes only include employees of Trifast plc, excluding Directors,

(22 employees as of 31 March 2022). The percentage change in average employee annual bonus for 2020 to 2021 has changed to

that disclosed in the FY2021 Annual Report as a result of using actual ﬁgures rather than estimates

6. Annual bonus increase is n/a due to £nil comparator in FY2021

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 123

Relative importance of spend on pay

The following table shows the relative spend on pay during the past two ﬁnancial years when compared to other

disbursements from proﬁt:

Year to

31 March

2022

Year to

31 March

2021 Change

Dividend distributions

£2.81m

£2.16m 30.4%

Group spend on pay (including Directors)

£35.66m

£31.91m 11.8%

Other pay

£8.69m

£6.60m 31.7%

Total remuneration

1,2

£44.35m

£38.51m 15.2%

1. The costs above are shown gross of income from government support schemes, totalling £0.1m (FY2021: £2.1m)

2. Total remuneration excludes IFRS 2 Share-based payments of £0.8m (FY2021: £1.1m). Including this, total remuneration would be

£45.1m (FY2021: £39.6m)

The following section, until page 127, is auditable.

Executive Director remuneration for the year ended 31 March 2022

Executive Director single ﬁgure of remuneration

Annual

bonus

Salary

£000

Taxable

beneﬁts

£000

Pensions

£000

Total

ﬁxed

£000

Cash

£000

LTIP

£000

Other

£000

Total

variable

£000

Total

£000

Mark Belton 317 20 55 392 113 — — 113 505

Prior year 296 15 52 363 — — 3 3 366

Clare Foster 243 21 42 306 86 — — 86 392

Prior year 227 16 40 283 — — 4 4 287

Totals 560 41 97 698 199 — — 199 897

Prior year totals 523 31 92 646 — — 7 7 653

1. The prior year salary for Mark Belton and Clare Foster takes into account the salary reduction in Q1 FY2021

2. Taxable beneﬁts consisted of the cost of providing a company car (or car allowance), private medical insurance and critical

illnesscover

3. Mark Belton and Clare Foster were members of the Company’s non-contributory pension plan in FY2022 and FY2021. This is an

HMRC-approved deﬁned contribution scheme. The rate of Company contribution to this scheme was 20% of base salary in both

years. From 1 April 2016, the Executives were both provided the option to take pension payments in the form of a cash allowance,

after a deduction for Employer’s National Insurance. Both Executive Directors choose to take a proportion of their pension as a

cashallowance

4. See additional details in relation to the annual bonus element of remuneration below

5. The performance period of the LTIP award granted on 23 July 2019 ended on 31 March 2022 and therefore its value (nil) is included

in the LTIP column for FY2022. See additional details on the performance outcomes of the 2019 LTIP and the LTIP award granted in

the year below on page 124

6. SAYE has been valued, based on discount applied to option price as at the date of grant

124 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration continued

Additional details for variable pay element of remuneration

(i) Annual bonus for year ended 31 March 2022

For FY2022, the Executive Directors had a maximum annual bonus opportunity of 150% of salary. For each Executive

Director, the annual bonus measures were based 70% on underlying organic operating proﬁt, 20% on cash conversion

rate and 10% on strategic/operational targets. The achievement of the strategic/operational measures was assessed

by the Remuneration Committee as the ﬁnancial gateway of outperforming the threshold underlying organic operating

proﬁt target. The table below provides information on the targets for each measure, actual performance and resulting

bonus payment for each Executive Director:

Performance required Actual performance CEO CFO

Measure Weighting Threshold On target Maximum Actual

% of

element

payable

Achievement

as % salary

Bonus

value

£000

Achievement

as % salary

Bonus

value

£000

Underlying

organic

operating

proﬁt

70% £15.0m £16.5m £18.0m £15.1m 26.7% 28.0% 89 28.0% 68

Cash

conversion

rate 20% 65% 75% 85% (66.8)% — — — — —

Strategic/

operational

targets 10%

Objectives based on

strategic/operational

See

below 50.0% 7.5% 24 7.5% 18

Total bonus achieved in FY2022

35.5% 113 35.5% 86

1. Underlying organic operating proﬁt has been reduced by the £8,498 UK government support received.

2022 annual bonus outcomes: strategic/operational objectives

We set out below the Committee’s assessment of the Executive Directors’ strategic/operational objectives.

Themaximum opportunity under this element of the annual bonus is 15% of salary.

Objective FY2022 achievements Committee assessment

Project Atlas continued roll-out 2 further sites go-live

Not achieved, as

progress held up due

to Covid-19 and

supply chain disruption

ESG Sustainability Report publication First Sustainability

Report published

November 2021

Achieved

The Committee assessed that 7.5% of base salary (or 50% of maximum) of the strategic/operational objectives had

been achieved for FY2022.

Therefore, the formulaic outcome for the FY2022 Executive Director overall bonus was 35.5% of base salary (23.7% of

maximum). The Committee considered not only the achievement against the pre-determined objectives set out above,

but also the wider Company performance to ensure that any achievement was representative of overall performance.

The Remuneration Committee took account of the following:

• The Company achieved an improved set of ﬁnancial results with year-on-year growth in sales and underlying

operating proﬁt

• The Company paid its ﬁnal dividend for FY2021 to shareholders, with the proposed full year dividend for the year

ended 31 March 2022 increasing by 31.3% to 2.10p

• The Group-wide bonus pool has increased by 83.8%, reﬂecting the superb work of all employees

Based on the above, the Committee is comfortable that an overall bonus payout of 23.7% of maximum is reasonable.

As a result, the Committee did not apply any overriding discretion. The FY2022 bonuses for Executive Directors will

be35.5% of salary and will be paid in cash in line with policy.

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 125

(ii) LTIP performance period ending in the year ended 31 March 2022

The 2019 LTIP awards equivalent to 150% of salary were granted to the Executive Directors on 23 July 2019.

Theawardswill vest on 23 July 2022; however, the three-year performance period for these awards ended

on31March2022.

These awards were granted subject to the achievement of certain EPS growth (70% weighting) and relative TSR

(30% weighting) targets and we set out the outcomes in the table below:

EPS growth (70% weighting)

TSR growth

vs FTSE Small Cap excl. IT Index

(30% weighting)

Trifast

underlying

diluted EPS

growth

EPS growth

required for

25% vesting

EPS growth

required for

100% vesting Vesting

Trifast

TSR

growth

Index growth

required for

25% vesting

Index growth

+ 8% p.a.

required for

100% vesting Vesting

Overall

vesting

(16.3)% p.a. 5% p.a. 15% p.a. nil% (21.9)% 43.7% 67.7% nil% nil%

1. TSR growth for Trifast and the FTSE Small Cap Index (excluding investment trusts) was measured using a three-month average prior

to the start and the end of the three-year performance period

2. Calculated using FY2022 underlying diluted EPS before IFRS 2 Share-based Payments and related costs reclassiﬁcation (8.53p)

tobe consistent with underlying measures at grant date

The following table presents the number of 2019 LTIP awards that will vest on 23 July 2022 based on the assessment

of the performance conditions and the resulting value of awards using the average Q4 FY2022 share price for each

Executive Director:

Number of

2019 LTIP

awards

granted

Number of

2019 LTIP

awards

vesting on

23 July

2022

Value of

vested

awards

Value of

vested

awards

attributable

to share

price growth

Mark Belton 223,557 nil nil nil

Clare Foster 17 1,274 nil nil nil

The Committee acknowledged that the 2019 LTIP outcome was aligned with Company performance as well as

shareholders’ experience and as a result did not apply any overriding discretion. The Committee also acknowledged

that the targets were demanding given they were based o Trifast’s exceptional FY2019 performance and was

disappointed that, despite the management team demonstrating resilience and performing strongly on progressing

theGroup’s strategic goals during the performance period, there was nil vesting.

The Committee is comfortable that the current policy operated as intended.

(iii) LTIP awards granted in the year ended 31 March 2022

LTIP awards were granted to the Executive Directors on 3 August 2021. In line with policy the awards had a face

valueof 175% of base salary and no consideration was paid for the grant, which was structured as a nil-cost option.

The normal vesting date of the LTIP awards will be 3 August 2024, being the third anniversary of the award date.

Oncevested, the LTIP awards are subject to a two-year holding period commencing on vesting.

The table below sets out further details of the LTIP awards granted on 3 August 2021 where vesting will be determined

according to the achievement of appropriate performance measures.

Type of

award

Award as

% of base

salary

Face value

of award

Face value

of award at

threshold

vesting

No. of

Vesting

period

Mark Belton

Nil-cost

option

175%

£554,750 £138,688 390,669

3 years

from grant

Clare Foster £425,250 £106,313 299,471

1. Calculated using a share price of £1.42 being the average share price for the ﬁve days up to and including 2 August (the last business

day prior to the grant date of 3August 2021)

In determining the EPS vesting schedule the Committee wished to ensure that the upper end of the vesting range

reﬂected aspirational performance. Therefore, rather than using a standard straight-line vesting schedule between

threshold (25% vesting) and maximum (100% vesting), the Committee decided that a graduated curve would be more

appropriate, which introduced a greater level of stretch for vesting above c.70%.

126 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Annual report on remuneration continued

Additional details for variable pay element of remuneration continued

(iii) LTIP awards granted in the year ended 31 March 2022 continued

The relative TSR targets remain unchanged. Both performance targets will be measured over a three-year performance

period ending 31 March 2024.

The awards will hence vest subject to achieving the following targets:

Measure Performance period Performance level

Vesting

(% of award)

Underlying diluted EPS (70%

weighting)

3 ﬁnancial years

from 1 April 2021

Below 16% p.a. growth nil

16% p.a. growth (threshold) 25%

25% p.a. growth 72%

37% p.a. growth (maximum) and above 100%

Relative TSR

vs FTSE Small Cap Index

(excluding investment trusts)

(30% weighting)

3 ﬁnancial years

from 1 April 2021

Below index return nil

Equal to index return (threshold) 25%

8% p.a. in excess of

index return (maximum)

100%

1. For the EPS measure, 25% vests for 16% p.a. growth, 72% vests for 25% p.a. growth and 100% vests for 37% p.a. growth, with vesting

on a straight-line basis between these parameters. Vesting between threshold and maximum for the relative TSR measure is on a

straight-line basis

2. Underlying diluted EPS will be calculated after IFRS 2 Share-based payment charges and related costs, in line with the published

FY2021 base year underlying diluted EPS from which these targets were calibrated

3. TSR growth for Trifast and the FTSE Small Cap Index (excluding investment trusts) will be measured using a three-month average

prior to the start and the end of the three-year performance period

The Committee will have overriding discretion to change the formulaic outcome (both downwards and upwards) if it is

out of line with the underlying performance of the Company and this will include an assessment of whether any windfall

gains have been made.

Payments to past Directors

There were no payments to past Directors in FY2022.

Payment for loss of oce

There was no payment made for loss of oce in FY2022.

Non-Executive Director single ﬁgure of remuneration

Base fee

£000

Chairing of

Audit or Rem

Committee

£000

Committee

membership

£000

Senior

Independent

Director

£000

Total

£000

Jonathan Shearman 128 — — — 128

Prior year 119 — — — 119

Clive Watson

43 8 5 6 62

Prior year 28 6 3 3 40

Scott Mac Meekin 43 — 8 — 51

Prior year 40 — 8 — 48

Claire Balmforth 43 8 5 — 56

Prior year 40 8 5 — 53

Totals 257 16 18 6 297

Prior year totals

237 17 18 5 277

1. Appointed 30 July 2020

2. Not the aggregate of the fees for the Directors in the table given that Neil Warner served as a Director for three months during

FY2021 with a total pay of £17k

The FY2021 fees take into account the fee reduction in Q1 FY2021 and the total includes past Directors.

Directors’

remuneration report continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 127

Statement of Directors’ shareholdings

Shareholding

requirement

Current

beneﬁcial

holding

Vested but

unexercised

options

Executive Directors

Mark Belton 689,130 376,822 502,769

Clare Foster 528,260 108,352 nil

Non-Executive Directors

Jonathan Shearman n/a 23,571 n/a

Clive Watson n/a 27, 500 n/a

Scott Mac Meekin n/a nil n/a

Claire Balmforth n/a nil n/a

LTIP

awards

subject to

performance

conditions

SAYE

options

Total of all

interests

on 31 March

2022

Current

which count

toward

shareholding

requirements

Shareholding

requirement

met?

Executive Directors

Mark Belton 994,927 21,052 1,895,570 658,057 No

Clare Foster 762,411 35,087 905,850 143,439 No

Non-Executive Directors

Jonathan Shearman n/a n/a 23,571 n/a n/a

Clive Watson n/a n/a 27, 500 n/a n/a

Scott Mac Meekin n/a n/a n/a n/a n/a

Claire Balmforth n/a n/a n/a n/a n/a

1. Under the existing policy, there is a 250% of salary shareholding requirement for all Executive Directors. This is to be built up over

ﬁve years from 22 September 2020, the date the current remuneration policy was approved by shareholders. The number of shares

shown is based on the 31 March 2022 share price of £1.15. In previous year’s Mark Belton has met the shareholding requirement

2. Includes options exercised in the year. Mark Belton exercised no nil-cost options during the year. Clare Foster exercised a nil-cost

option over 35,219 shares which had a total value of £49,306 as at the date of exercise

3. The LTIP awards subject to performance conditions column includes the 2019 LTIPs which will lapse on 23 July 2022 because of not

achieving the attaching performance conditions

4. Total of current beneﬁcial holding, SAYE options, and vested but unexercised options on a net-of-tax basis

Between 31 March 2022 and 25 July 2022 there were no movements in the Directors’ shareholdings from those

disclosed in the table above.

Service contracts for Executive Directors

The service agreements of the Executive Directors are not ﬁxed term and are terminable by either the Company or the

Director on the following bases:

Notice

period

Date of

signing

Mark Belton 12 months 11 September 2020

Clare Foster 12 months 11 September 2020

The Directors’ contracts are kept and can be viewed at the Company’s registered oce.

128 Trifast plcAnnual Report for the year ended 31 March 2022

Remuneration

Directors’

remuneration report continued

Annual report on remuneration continued

Non-Executive Directors’ letters of appointment

The Non-Executive Directors do not have service contracts but are appointed under letters of appointment.

ClaireBalmforth and Clive Watson were appointed for an initial three-year term in 2020 and all Non-Executive

Directors are subject to annual re-election at the Company’s AGM.

The table below sets out the date that each Non-Executive Director signed their current letter of appointment and the

notice period by which their appointment may be terminated early by either party. For new appointments, the notice

period is three months and in line with existing Non-Executive Directors’ arrangements, set out in the 2014 Directors’

Remuneration Policy, this will be extended to 12 months on a change of control. The Directors’ letters of appointment

are kept and can be viewed at the Company’s registered oce.

Non-Executive Director

Notice

period

Date of

signing

Jonathan Shearman

3 months 2 July 2020

Scott Mac Meekin

3 months 2 July 2020

Claire Balmforth

3 months 26 March 2020

Clive Watson

3 months 20 April 2020

1. Jonathan Shearman was appointed as a Non-Executive Director on 17 June 2009 and as Chair on 1 April 2020. Scott Mac Meekin

was appointed as a Non-Executive Director on 25 April 2013

2. Although signing appointment letters prior to the appointment, Claire Balmforth was appointed as a Non-Executive Director on

1April2020 and Clive Watson on 30 July 2020

Functioning of Remuneration Committee

The role of the Committee is to ensure that the remuneration arrangements for Executive Directors provide them with

the motivation to deliver our strategy and create shareholder value in a sustainable manner. In addition, it is our task to

ensure that the remuneration received by the Executive Directors is proportionate to the performance achieved andthe

returns received by you as shareholders.

The Committee is composed entirely of Non-Executive Directors. Members have no day-to-day involvement in

therunning of the business. No Executive Director sits on the Committee. The Remuneration Committee is formally

constituted with written terms of reference. A copy of the terms of reference is available to shareholders by writing

tothe Company Secretary, whose details are set out on page 203 of this publication.

Alongside numerous conference calls and meetings with advisers, the Committee had three formal meetings during

theyear. All Committee meetings were fully attended by members in appointment at the time of the meeting.

On most occasions, the CEO and CFO were invited to attend to ensure the Committee was in possession of all the

relevant facts. The key activities the Committee undertook during the year were: continuing to monitor the Company’s

response to Covid-19 and the impact on its remuneration arrangements; determining the ﬁnal remuneration outcomes

for the year to 31 March 2022; discussing and approving changes to the Executive Director remuneration packages for

FY2023, including consideration of the alignment of pension contribution rates with the wider workforce; calibrating

the appropriate incentive targets for the FY2023 annual bonus and LTIP awards; overseeing the remuneration aspects

of senior management and wider workforce pay and policies; considering our gender pay reporting summary; and

reviewing and agreeing minor amendments of the Remuneration Committee’s terms of reference.

During the year, the Committee received independent advice from PwC in relation to the rebalance of executive pay

and general matters. PwC was appointed by the Committee. The fees paid by the Company to PwC for services to the

Committee during the ﬁnancial year were £51k (excluding VAT). The Group also retains PwC regarding taxation services

and consulting services in the ordinary course of business of Trifast. The Committee believes that this does not create

a conﬂict of interest and the advice they receive is independent and objective. PwC is a signatory to the Remuneration

Consultants’ Code of Conduct which requires its advice to be objective and impartial. PwC does not have any other

connections with the Company or its Directors.

The Committee consults with the Company Secretary and Global HR and Sustainability Director regarding

remuneration and corporate governance issues. With regard to the Senior Management in the Company

(excludingBoard Directors), the Committee also takes advice from the Executive Board.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 129

Statement of AGM voting

The Group is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. At our

2021 AGM, the Committee was very pleased to see that the Directors’ remuneration report was passed with 94.9%

support from shareholders. We also noted the feedback received from shareholder representative bodies regarding

the potential rebalance of Executive Director remuneration and the alignment of pension contribution rates and, as set

out in this report, the feedback was considered by the Committee during the year. The Committee would like to thank

shareholders for their support at the 2021 AGM.

The table below shows the actual voting on the 2021 remuneration report at the AGM held on 28 July 2021 and the

2020 remuneration policy at the AGM held on 22 September 2020:

Votes

for %

Votes

against %

Votes

withheld

2021 remuneration report 107, 254,155 94.9 5,807,886 5.1 31,492

2020 remuneration policy 95,468,167 89.3 11,410,502 10.7 27,885

This report was approved by the Board of Directors and signed on its behalf by:

Claire Balmforth

Chair of Remuneration Committee

25 July 2022

130 Trifast plcAnnual Report for the year ended 31 March 2022

Directors’

report

Governance

Results and proposed dividend

Total Group revenue from continuing operations was

£218.6m (FY2021: £188.2m) and the proﬁt for the year

before taxation was £10.6m (FY2021: £7.8m). Underlying

proﬁt before tax for the Group was £13.8m (FY2021:

£11.0m); see note 2 for breakdown.

As part of our capital allocation policy and reﬂective of

the strong recovery demonstrated by the Group through

the second half of the year, the Directors recommend

a ﬁnal dividend of 1.40p (FY2021: 1.60p) per ordinary

share to be paid on 14 October 2022 to shareholders

registered at the close of business on 16 September

2022. This, together with the interim dividend of 0.70p

(paidon 14 April 2022) (FY2021: nil), brings the total for

the year to 2.10p (FY2021: 1.60p). The 2022 proposed

ﬁnal dividend has not been included within creditors

as itwas not approved before the year end. The 2022

interimdividendis also unrecognised as it was paid

postyear end.

The strategic report provides a detailed analysis

ofthe results in the year and an indication of

futuredevelopments.

For more information on this and GHG emissions,

pleasesee pages 02 to 89.

Annual General Meeting

The Annual General Meeting will be held at 12 noon

on7 September 2022 at Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex TN22 1QW. Further details can be

found in the Notice of Meeting.

Director insurance

The Company maintains an appropriate level of Directors’

and Ocer’s insurance in respect of legal action against

Directors as permitted under the Company’s Articles of

Association and the Companies Act 2006.

No insurance cover would be provided in the event

that a Director is proven to have acted dishonestly

orfraudulently.

Directors and Directors’ interests

The Directors who held oce during the year were

asfollows:

Chair

JPD Shearman

Non-Executive Director

Chair of Nomination Committee

Executive Directors

MR Belton

Chief Executive Ocer

CL Foster

Chief Financial Ocer

Independent Directors (Non-Executive)

C Watson

Senior Independent Director

Chair of Audit & Risk Committee

C Balmforth

Chair of Remuneration Committee

SW Mac Meekin

The Directors’ remuneration and their interests in share

capital are shown in the remuneration report on page 122.

All Directors are subject to annual re-election; details can

be found in the corporate governance report on page 96.

Biographical details can be found on pages 92and93.

The Directors present their Annual Report on the aairs of the Group,

together with the ﬁnancial statements and auditor’s report, for the

year ended 31 March 2022

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 131

Substantial shareholdings

Details of the share structure of the Company are disclosed in note 24.

The Company was aware of the following material interests, representing 3% or more of the issued share capital of

theCompany.

As at 31 March 2022

No. of

shares held

% of

shareholding

Sanford DeLand Asset Management Ltd 18,572,500 13.65

Schroder Investment Management Ltd 12,491,510 9.18

Hargreave Hale Ltd 9,251,000 6.80

Slater Investments Ltd 8,582,280 6.31

Chelverton Asset Management 7,500,000 5.51

Michael Timms 7,000,000 5.14

AXA Framlington Investment Managers 6,484,024 4.76

BlackRock Investment Management (UK) 5,531,042 4.06

Allianz Global Investors GmbH 5,497,447 4.04

Threadneedle Asset Management Ltd 5,365,453 3.94

Standard Life Investments 5,114,761 3.76

As at 1 July 2022

No. of

shares held

% of

shareholding

Sanford DeLand Asset Management Ltd 16,800,000 12.34

Slater Investments Ltd 13,267,729 9.75

Schroder Investment Management Ltd 12,283,773 9.03

Hargreave Hale Ltd 9,251,000 6.80

Chelverton Asset Management 7,500,000 5.51

Michael Timms 7,000,000 5.14

BlackRock Investment Management (UK) 6,440,835 4.73

Allianz Global Investors GmbH 5,497,447 4.04

Threadneedle Asset Management Ltd 5,344,145 3.93

Standard Life Investments 4,791,005 3.52

Employee Beneﬁt Trust (EBT)

The number of Trifast 5p ordinary shares held by the Trifast EBT (as funded by the Group) at 31 March 2022

was 2,194,470 (FY2021: 329,087) which represented 1.6% of the fully paid up share capital of the Company as at

31March2022 (FY2021: 0.2%). During the year, 90,337 shares were transferred out to meet employee share obligations

(FY2021: 743,384) and 1,955,720 shares were acquired (FY2021: 44,280). These shares are shown in the own shares

held reserve within equity on the balance sheet.

Financial instruments

Information in respect of the Group’s policies on ﬁnancial risk management objectives, including policies to manage

credit risk, liquidity risk and foreign currency risk, along with the capital structure of the Group, are given in note 26

tothe ﬁnancial statements.

132 Trifast plcAnnual Report for the year ended 31 March 2022

Governance

Directors’

report continued

Corporate governance

The corporate governance statement on pages 96 to 100

should be read as forming part of the Directors’ report.

Takeover Directive

Where not provided elsewhere in the Directors’ report,

the following provides the additional information required

to be disclosed because of the implementation of the

Takeover Directive.

There are no restrictions on the transfer of ordinary

shares in the capital of the Company other than certain

restrictions which may from time to time be imposed

by law (for example, insider trading law). In accordance

with the Listing Rules of the Financial Conduct Authority,

certain employees are required to seek the approval of

the Company to deal in its shares.

The Company is not aware of any agreements between

shareholders that may result in restrictions on the transfer

of shares or on voting rights.

No person has any special rights of control over the

Company’s share capital and all its shares are fully paid.

The rules governing the appointment and replacement of

Directors are set out in the corporate governance section

of the Directors’ report on page 98.

The Company’s Articles of Association may only be

amended by a special resolution at a general meeting

ofshareholders.

The Company is party to banking agreements that, upon a

change of control of the Company, could be terminable by

the bank concerned.

Outside of the extension of certain Directors’ rolling

contract periods and notice periods, there are no

agreements between the Company and its Directors

or employees which provide for compensation for loss

of oce or employment (whether through resignation,

purported redundancy or otherwise) that occurs because

of a takeover bid.

The Company is not aware of any contractual or other

agreements which are essential to its business which

ought to be disclosed in the Directors’ report.

Donations

The Group made no political donations in the year

(FY2021: £nil). The Group made £3k of charitable

donations in the year (FY2021: £3k).

Research and development

The Group had a spend of £70.0k on Research and

development in the year (FY2021: £69.2k).

Employees

The Group has a policy of oering equal opportunities

to employees at all levels in respect of the conditions of

work. Throughout the Group it is the Board’s intention

to provide possible employment opportunities and

training for disabled people and to care for employees

who become disabled having regard to aptitude and

abilities. Our ESG statement can be found on our website

www.trifast.com and further details are provided in the

strategic report of this Annual Report and within the

Sustainability Report.

Regular consultation and meetings, formal, virtual or

otherwise, are held with all levels of employees to discuss

problems and opportunities. Information on matters of

concern to employee is presented in the in-house letters

and publications.

For more information on employee engagement see

page99.

Subsequent events

There are no material adjusting or non-adjusting events

subsequent to the balance sheet date.

Disclosure of information to auditor

Each of the Directors who held oce at the date of

approval of this Directors’ report conﬁrm that, so far as

they are each aware, there is no relevant audit information

of which the Company’s auditor is unaware; and each

Director has taken all the steps that they ought to have

taken as a Director to make themselves aware of any

relevant audit information and to establish that the

Company’s auditor is aware of that information.

By order of the Board

Jonathan Shearman

Chair

25 July 2022

Trifast House

Bellbrook Park

Uckﬁeld

East Sussex

TN22 1QW

Company registration number: 01919797

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 133

Statement of Directors’

responsibilities

in respect of the Annual Report and the ﬁnancial statements

The Directors are responsible for preparing the Annual

Report and the ﬁnancial statements in accordance with

UK adopted international accounting standards and

applicable law and regulations.

Company law requires the Directors to prepare ﬁnancial

statements for each ﬁnancial year. Under that law the

Directors are required to prepare the Group ﬁnancial

statements and have elected to prepare the Company

ﬁnancial statements in accordance with UK adopted

international accounting standards.

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 aairs of

the Group and Company and of the proﬁt or loss for

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

• State whether they have been prepared in accordance

with UK adopted international accounting standards,

subject to any material departures disclosed and

explained in the ﬁnancial statements

• Prepare the ﬁnancial statements on the going concern

basis unless it is inappropriate to presume that the

Group and the Company will continue in business

• Prepare a Directors’ report, a strategic report and

Directors’ remuneration report which comply with

therequirements of the Companies Act 2006

The Directors are responsible for keeping adequate

accounting records that are sucient to show and

explain the Company’s transactions and disclose with

reasonable accuracy at any time the ﬁnancial position

of the Company and enable them to ensure that the

ﬁnancial statements comply with the Companies Act

2006. They are also responsible for safeguarding the

assets of the Company and hence for taking reasonable

steps for the prevention and detection of fraud and other

irregularities. The Directors are responsible for ensuring

that the Annual Report and Accounts, taken as a whole,

are fair, balanced, and understandable and provides the

information necessary for shareholders to assess the

Group’s performance, business model and strategy.

The Directors are responsible for ensuring the Annual

Report and the ﬁnancial statements are made available

on a website. Financial statements are published on

the Company’s website in accordance with legislation

in the United Kingdom governing the preparation and

dissemination of ﬁnancial statements, which may vary

from legislation in other jurisdictions.

The maintenance and integrity of the Company’s

websiteis the responsibility of the Directors.

TheDirectors’ responsibility also extends to the

ongoingintegrity of the ﬁnancial statements

containedtherein.

Responsibility statement of the Directors

inrespect of theannual ﬁnancial report

We conﬁrm that to the best of our knowledge:

• The ﬁnancial statements have been prepared in

accordance with the applicable set of accounting

standards, give a true and fair view of the assets,

liabilities, ﬁnancial position and proﬁt and loss of

theGroup and Company

• The Annual Report includes a fair review of the

development and performance of the business and

the ﬁnancial position of the Group and Company,

together with a description of the principal risks

anduncertainties that they face

We consider the Annual Report and Accounts, taken as a

whole, is fair, balanced and understandable, and provides

the information necessary for shareholders to assess

the Group’s position and performance, business model

andstrategy.

On behalf of the Board

Mark Belton

Chief Executive Ocer

Clare Foster

Chief Financial Ocer

25 July 2022

134 Trifast plcAnnual Report for the year ended 31 March 2022

Independent auditor’s report

to the members of Trifast Plc

Financial statements

Opinion on the ﬁnancial statements

In our opinion:

• the ﬁnancial statements give a true and fair view of

the state of the Group’s and of the Parent Company’s

aairs as at 31 March 2022 and of the Group’s proﬁt for

the year then ended;

• the Group ﬁnancial statements have been properly

prepared in accordance with UK adopted international

accounting standards;

• the Parent Company ﬁnancial statements have been

properly prepared in accordance with UK adopted

international accounting standards and as applied in

accordance with the provisions of the Companies Act

2006; and

• the ﬁnancial statements have been prepared in

accordance with the requirements of the Companies

Act 2006.

We have audited the ﬁnancial statements of Trifast Plc

(the ‘Parent Company’) and its subsidiaries (the ‘Group’)

for the year ended 31 March 2022 which comprise

Consolidated income statement, Consolidated statement

of comprehensive income, Consolidated and Company

statement of changes in equity, Statements of ﬁnancial

position, Statements of cash ﬂows and 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 UK adopted international accounting standards

and as regards the Parent Company ﬁnancial statements,

as applied in accordance with the provisions 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 Auditor’s responsibilities for the audit of

the ﬁnancial statements section of our report. We believe

that the audit evidence we have obtained is sucient and

appropriate to provide a basis for our opinion. Our audit

opinion is consistent with the additional report to the

audit committee.

Independence

Following the recommendation of the audit committee,

we were appointed by the board on 3 December 2019

to audit the ﬁnancial statements for the year ending

31March2022 and subsequent ﬁnancial periods.

Theperiod of total uninterrupted engagement including

retenders and reappointments is 3 years, covering the

years ending 31 March 2020 to 31 March 2022. We remain

independent of the Group and the Parent Company

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 as applied to

listed public interest entities, and we have fulﬁlled our

other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by

that standard were not provided to the Group or the

ParentCompany.

Services that were provided by BDO LLP in addition

to the audit were restricted to the interim review and

agreed upon procedures relating to government Covid-19

assistance programmes and a research and design tax

credit claim.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 135

Conclusions relating to going concern

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 evaluation of the Directors’ assessment of the Group

and the Parent Company’s ability to continue to adopt the going concern basis of accounting included:

• We reviewed the Directors’ assessment of going concern, their model’s computational accuracy and challenged the

key assumptions used in the forecasts by benchmarking against historic forecasting accuracy at a subsidiary level;

• We reviewed and tested forecast compliance with quarterly interest cover and adjusted leverage covenants in place;

• We calculated to what extend the key inputs would need to deteriorate in order to break the Group’s liquidity and

then considered the likelihood of this occurring;

• We compared the Directors’ forecast against post year end management accounts to assess the accuracy of

management’s forecasts to date; and

• We reviewed the adequacy of the disclosure on going concern in the Group ﬁnancial statements.

Based on the work we have performed, we have not identiﬁed any material uncertainties relating to events or

conditions that, individually or collectively, may cast signiﬁcant doubt on the Group and the Parent Company’s

ability to continue as a going concern for a period of at least twelve months from when the ﬁnancial statements are

authorised for issue.

In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to the Directors’ statement in the ﬁnancial statements about

whether the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant

sections of this report.

Overview

Coverage

97% (2021: 82%) of Adjusted

group proﬁt before tax

100% (2021: 100%) of Group revenue

95% (2021: 99%) of Group total assets

Key audit

matters

2022 2021

Recoverability of customer speciﬁc inventory

 

Goodwill impairment

 

Materiality

Group ﬁnancial statements as a whole

£0.7m (2021: £0.5m) based on 5% (2021: 5%) of adjusted

group proﬁt before tax.

1. These are areas which have been subject to a full scope audit by the group engagement team

2. Adjusted to exclude separately disclosed items excluding acquired intangible amortisation totalling £1.5m (2021: £1.8m)

3. Adjusted to exclude non-underlying expensed Project Atlas, TR Falcon acquisition costs totalling £1.5m

136 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Independent auditor’s report continued

to the members of Trifast Plc

An overview of the scope of our audit

Our Group audit was scoped by obtaining an

understanding of the Group and its environment,

including the Group’s system of internal control,

andassessing the risks of material misstatement in

the ﬁnancial statements. We also addressed the risk

of management override of internal controls, including

assessing whether there was evidence ofbiasby

the Directors that may have represented a risk of

materialmisstatement.

Of the group’s 25 reporting components, 5 including

the Parent Company were identiﬁed as signiﬁcant

and material with full scope audit procedures being

performed for group purposes and 14 were identiﬁed

as not-signiﬁcant but material where speciﬁc balances

and risks were identiﬁed as being in scope for audit

purposes. We conducted reviews of ﬁnancial information

(including enquiry) at a further 6 not-signiﬁcant or

immaterialcomponents.

0% 20%

Full Audit

40% 60% 80% 100%

Total

Adjusted

PBT

Total

Revenue

Total

Assets

Speciﬁc audit procedures

Group level procedures

Members of the group audit team completed all audits

except for 2 full scope and 11 speciﬁc scope audits which

were audited by local overseas BDO network member

ﬁrms. The group audit team performed audit procedures

on the group consolidation process.

Our involvement with component auditors

For the work performed by component auditors,

wedetermined the level of involvement needed in order

to be able to conclude whether sucient appropriate

audit evidence has been obtained as a basis for our

opinion on the Group ﬁnancial statements as a whole.

Our involvement with component auditors included

thefollowing:

The group audit team controlled and directed the work

of the component audit teams. This included providing

detailed audit instructions and setting of component

materiality. A planned visit to the three UK entities and

TRVIC SPA (Italian entity) were completed in person,

other interactions were completed on a remote basis

instead. The group audit team held video calls in order

to attend component planning and completion calls

together with open dialogue maintained throughout the

audit. Wealso performed reviews of the component audit

teamsworking papers.

Key audit matters

Key audit matters are those matters that, in our

professional judgement, were of most signiﬁcance in

ouraudit of the ﬁnancial statements of the current period

and include the most signiﬁcant assessed risks of material

misstatement (whether or not due to fraud) that we

identiﬁed, including those which had the greatest eect

on: the overall audit strategy, the allocation of resources

in the audit, and directing the eorts of the engagement

team. These matters were addressed in the context of

our audit of the ﬁnancial statements as a whole, and in

forming our opinion thereon, and we do not provide a

separate opinion on these matters.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 137

Key audit matter How the scope of our audit addressed the key audit matter

Recoverability of

customer-speciﬁcinventory

Refer to the Accounting Policies

ofthe Group on pages 148 to 154 for

further detail on the policies impacting

inventory provision valuation together

with Note 30 detailing the estimation

uncertainty over provisions for customer

speciﬁc inventory and Note 18 for the

ﬁnancial disclosure of inventory.

The group has bespoke

customer-speciﬁc products for which

there is a risk over recoverability if

any contractual obligations to acquire

outstanding stock are waived for

commercial reasons or the customer

experiences ﬁnancial distress.

Given the size of the customer-speciﬁc

inventory balance, and the complexity

involved in estimating customers

changes in future demand there is a

risk that the valuation of the inventory

provision is inappropriate. We therefore

determined this to be a key audit matter.

We have:

• Tested the application of the provision methodology through sample

testing the classiﬁcation of inventory between customer speciﬁc

or standard inventory, the ageing and the arithmetical accuracy

ofapplication of the provision;

• Challenged management’s customer speciﬁc inventory provision

estimate by evaluating its historic accuracy in comparison to the

priorperiod provision, scrappage and its subsequent utilisation;

• We challenged management’s provision methodology by

benchmarking against a modelled estimate of the underlying

percentage of inventory ultimately not utilised using observed

historicpatterns for a sample of entities;

• On a sample basis, we reviewed agreements to conﬁrm contractual

terms of customer underwriting agreements to identify those

balances with higher risk of obsolescence; and

• On a sample basis, tested the recoverability of accounts receivable

balances including those related to the sale of customer-speciﬁc

inventory for indicators of ﬁnancial distress.

Key observations:

We did not identify any indicators to suggest that the estimates

made in determining the customer speciﬁc inventory provision

wereinappropriate.

Goodwill impairment

Refer to the Accounting Policies of the

Group on pages 148 to 154 for further

detail on the policies impacting goodwill

valuation together with Note 30

detailing the estimation uncertainty over

goodwill impairment and Note 13 for the

ﬁnancial disclosure of goodwill.

Goodwill is a signiﬁcant balance in the

Group balance sheet and is subject to

anannual impairment review.

The recoverability of goodwill is

dependent on estimating both cashﬂows

and appropriate discount rates to apply

in the value in use calculation.

Given the size of the goodwill balance,

and the complexity of estimating

both cashﬂows (particularly owing

to the ongoing impact of COVID-19)

and discount rates we consider

goodwill impairment to be an area of

material estimation. Hence there is a

risk that thevaluation of goodwill is

inappropriate. Due to the judgements

involved we consider this to be a key

audit matter.

We have:

• Assessed management’s impairment model for compliance

withapplicable accounting standards and tested its

computationalaccuracy;

• Considered the historical accuracy of management’s forecasting as

astarting point for sensitising management’s current year forecast;

• Checked the coherence of the forecast cashﬂows with those modelled

as part of the group going concern exercise;

• With the use of our internal valuation experts we tested the

discount rate assumptions to assess their reasonableness through

corroboration to external sources;

• Performed sensitivity analysis over the key assumptions and ensuring

the group considered the same reasonably possible adverse eects

that could arise as a result of a decrease in sales as with those applied

in their going concern exercise; and

Key observations:

We did not identify any indicators to suggest that the estimates

made bythe Directors in the calculation of the goodwill impairment

assessment were inappropriate.

138 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Independent auditor’s report continued

to the members of Trifast Plc

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the eect of

misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could

inﬂuence the economic decisions of reasonable users that are taken on the basis of the ﬁnancial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a

lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements

below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identiﬁed

misstatements, and the particular circumstances of their occurrence, when evaluating their eect on the ﬁnancial

statements as a whole.

Based on our professional judgement, we determined materiality for the ﬁnancial statements as a whole and

performance materiality as follows:

Group ﬁnancial statements

2022 2021

£m £m

Parent company ﬁnancial statements

2022 2021

£m £m

Materiality

£660k £500k £140k £100k

Basis for

determining

materiality

5% of adjusted

proﬁt before tax

5% of adjusted

proﬁt before tax

21% of Group

materiality

20% of Group

materiality

Rationale for

the benchmark

applied

We considered adjusted proﬁt to be a

key performance measure for users of the

ﬁnancial statements.

Capped 21% (2021: 20%) of Group materiality

given the assessment of the components

aggregation risk.

Performance

materiality

£429k £325k £91k £65k

Basis for

determining

performance

materiality

65% (2021: 65%) of Group materiality

takinginto account various factors including:

the expected total value of known and

likely misstatements, brought forward

misstatements, management’s attitude

towards adjustments, the number of material

estimates, and how homogeneous processes

are within the group.

65% (2021: 65%) of Parent company

materiality taking into account various

factors including: the expected total value

of known and likely misstatements, brought

forward misstatements, management’s

attitude towards adjustments, the

number ofmaterial estimates, and how

homogeneous processes are within the

Parent company.

1. Adjusted to exclude non-underlying expensed Project Atlas, TR Falcon acquisition costs totalling £1.5m

2. Adjusted to exclude non-underlying expensed Project Atlas, restructuring, Malaysian disposal, and equity raise costs totalling £1.8m

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 139

Component materiality

We set materiality for each component of the Group based on a percentage of between 21% and 95% of Group

materiality dependent on the size and our assessment of the risk of material misstatement of that component.

Component materiality ranged from £140k to £627k. In the audit of each component, we further applied performance

materiality levels of 65% of the component materiality to our testing to ensure that the risk of errors exceeding

component materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit dierences in excess of £50k

(2021: £50k) with those between £13k - £50k (2021: £10k – £50k) being reported in aggregate. We also agreed to

report dierences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

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

the Annual report other than the ﬁnancial statements and our auditor’s report thereon. 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.

Corporate governance statement

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and

that part of the Corporate Governance Statement relating to the parent company’s compliance with the provisions of

the UK Corporate Governance Code speciﬁed for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent with the ﬁnancial statements or our knowledge obtained

during the audit.

Going

concern and

longer-term

viability

• The Directors’ statement with regards to the appropriateness of adopting the going concern

basis of accounting and any material uncertainties identiﬁed set out on page 99; and

• The Directors’ explanation as to their assessment of the Group’s prospects, the period this

assessment covers and why the period is appropriate set out on pages 64 and 65.

Other Code

provisions

• Directors’ statement on fair, balanced and understandable set out on page 108;

• Board’s conﬁrmation that it has carried out a robust assessment of the emerging and principal

risks set out on page 106;

• The section of the annual report that describes the review of eectiveness of risk management

and internal control systems set out on page 107; and

• The section describing the work of the audit committee set out on page 105.

140 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Independent auditor’s report continued

to the members of Trifast Plc

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required

by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic

report and

Directors’

report

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

• the information given in the Strategic report and the Directors’ report for the ﬁnancial year for

which the ﬁnancial statements are prepared is consistent with the ﬁnancial statements; and

• the 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 Parent Company and its

environment obtained in the course of the audit, we have not identiﬁed material misstatements in

the strategic report or the Directors’ report.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Matters on

which we

are required

to report by

exception

We have nothing to report in respect of the following matters in relation to which 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 and the part of the Directors’ remuneration report to

be audited 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, 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 is 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.

Auditor’s 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 an auditor’s 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 ﬁnancial statements.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 141

Extent to which the audit was capable of

detectingirregularities, including fraud

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:

• We gained an understanding of the legal and

regulatory framework applicable to the Group and

the industry in which it operates. We considered the

signiﬁcant laws and regulations to be the applicable

accounting standards, Companies Act 2006, the UK

Listing Rules and certain requirements from the UK

andoverseas tax legislation.

• We assessed the susceptibility of the ﬁnancial

statements to material misstatement, including fraud

and considered the fraud risks to be management

override of controls and revenue recognition.

• Our tests included, but were not limited to, agreement

of the ﬁnancial statement disclosures to underlying

supporting documentation, review of correspondence

with regulators and legal advisors, enquiries of

management and those charged with governance,

review of board minutes and review of internal

auditreports.

• We also addressed the risk of management override

of internal controls, including testing of journals

exhibiting unusual pairings, value or descriptions

and evaluating whether there was evidence of bias in

estimates (i.e. inventory provisions, forecast cashﬂows

used in impairment and going concern assessments)

or judgements by the Directors that represented a risk

of material misstatement due to fraud. To address the

risk of fraud due to revenue recognition through our

journals testing we agreed material manual journal

entries to revenue to supporting documentation.

Othertesting of fraud due to revenue recognition

included the testing of cut-o and group adjustments.

• We also communicated relevant identiﬁed laws and

regulations and potential fraud risks to all engagement

team members, and remained alert to any indications

of fraud or non-compliance with laws and regulations

throughout the audit. We also instructed and reviewed

the work performed by the component audit teams in

this regard.

Our audit procedures were designed to respond to

risksof material misstatement in the ﬁnancial statements,

recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of

not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are

inherent limitations in the audit procedures performed

and the further removed non-compliance with laws and

regulations is from the events and transactions reﬂected

in the ﬁnancial statements, the less likely we are to

become aware of it.

A further description of our responsibilities is

availableonthe Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This description

forms part of our auditor’s report.

Use of our report

This report is made solely to the Parent 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 Parent

Company’s members those matters we are required

to state to them in an auditor’s report and for no other

purpose. To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone other than

the Parent Company and the Parent Company’s members

as a body, for our audit work, for this report, or for the

opinions we have formed.

Anna Draper (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

Gatwick, UK

25 July 2022

BDO LLP is a limited liability partnership registered in

England and Wales (with registered number OC305127).

142 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Consolidated income statement

for the year ended 31 March 2022

Note

2022

£000

2021

£000

Continuing operations

Revenue

3, 35

218,6 18

1 8 8 ,1 6 1

Cost of sales

(1 6 0,1 8 9)

(1 3 8 , 247)

Gross proﬁt 58 , 42 9

49,91 4

Other operating income 4

565

595

Distribution expenses

(5, 2 9 6)

(3,773)

Administrative expenses before separately disclosed items

(3 8 , 952)

(34,754)

Acquired intangible amortisation 2, 13

(1,593)

(1 , 428)

Project Atlas 2

(1,0 4 1)

(1 ,0 82)

Restructuring costs 2

—

(377)

Loss on disposal of TR Formac (Malaysia) SDN Bhd 2

—

(2 8 0)

Acquisition costs 2,36

(50 8)

—

Equity raise costs 2

—

(5 9)

Total administrative expenses

(4 2 , 0 9 4)

(37,980)

Operating proﬁt

5, 6, 7

11, 604

8 ,75 6

Financial income 8

Financial expenses 8

(1 ,01 8)

(1 ,0 0 9)

Net ﬁnancing costs (98 7)

(972)

Proﬁt before taxation

10 ,6 17

7,784

Taxation 9

(1,64 0)

(1 , 9 9 4)

Proﬁt for the year

(attributable to equity shareholders of the Parent Company) 8 , 97 7 5 ,7 9 0

Earnings per share

Basic 25

6.61p

4.33p

Diluted 25

6.56p

4.3 1p

The notes on pages 148 to 197 form part of these ﬁnancial statements.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 143

Consolidated statement of comprehensive income

for the year ended 31 March 2022

2022

£000

2021

£000

Proﬁt for the year 8 , 97 7

5 ,79 0

Other comprehensive income/(loss) for the year:

Items that may be reclassiﬁed subsequently to proﬁt or loss:

Exchange dierences on translation of foreign operations

2 , 9 07

(4,916)

(Loss)/gain on a hedge of a net investment taken to equity

(1 47)

Other comprehensive income/(loss) recognised directly in equity 2 , 760

(4 , 8 8 2)

Total comprehensive income recognised for the year

(attributable to the equity shareholders of the Parent Company) 11,7 37 908

144 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

capital

£000

premium

£000

Merger

reserve

£000

Own

shares held

£000

Translation

reserve

£000

Retained

earnings

£000

Total

equity

£000

Balance at 31 March 2021 6,802 22 ,461 16, 328 (595) 9, 524 7 7, 2 8 4 131 ,8 04

Total comprehensive income

for the year:

Proﬁt for the year

— — — — — 8, 977 8 , 97 7

Other comprehensive income

for the year — — — — 2 , 760 — 2 ,76 0

Total comprehensive income

recognised forthe year — — — — 2 ,76 0 8 , 97 7 11 ,737

Issue of share capital (note 24)

2 51 — — — — 53

Share-based payment transactions

(netoftax) (note 22) — — — — — 74 2 74 2

Movement in own shares held

(note 24) — — — (2, 8 92) — (143) (3 ,035)

Dividends (note 24)

— — — — — (2 ,1 5 6) (2 ,1 5 6)

Total transactions with owners 2 51 — (2 , 8 92) — (1,557) (4 , 3 9 6)

Balance at 31 March 2022 6,804 2 2 ,512 16, 328 (3 ,4 87) 12, 284 8 4, 70 4 139, 145

Consolidated statement of changes in equity

for the year ended 31 March 2022

Consolidated statement of changes in equity

for the year ended 31 March 2021

capital

£000

premium

£000

Merger

reserve

£000

Own

shares held

£000

Translation

reserve

£000

Retained

earnings

£000

Total

equity

£000

Balance at 31 March 2020

6,132 2 2,3 40 — (1,934) 14,40 6 74 ,7 1 6 115,660

Total comprehensive income

for the year:

Proﬁt for the year — — — — — 5,79 0 5,79 0

Other comprehensive loss

for the year — — — — (4 , 8 8 2) — (4 , 8 8 2)

Total comprehensive income

recognised forthe year — — — — (4 , 8 8 2) 5 ,79 0 9 08

Issue of share capital (note 24) 670 121 14 , 8 07 — — — 15 , 598

Presentation transfer to merger

reserve

— — 1 , 521 — — (1 , 521) —

Share-based payment transactions

(netoftax) (note 22) — — — — — 1,1 5 4 1 ,1 5 4

Movement in own shares held

(note 24) — — — 1, 339 — (1 , 39 8) (59)

Dividends (note 24) — — — — — (1 ,457) (1,457)

Total transactions with owners

670 121 16 , 328 1 , 339 — (3,222) 1 5, 23 6

Balance at 31 March 2021

6, 8 02 2 2,4 61 16 , 328 (595) 9 , 5 24 7 7, 2 8 4 131 , 80 4

1. Previously, the merger reserve was reported in retained earnings at a consolidated level. Due to the additional merger reserve

created from the equity raise, management now consider it appropriate to separately disclose the merger reserve. Therefore,

wehave transferred the £1.5m previously reported in retained earnings to the merger reserve

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 145

Company statement of changes in equity

for the year ended 31 March 2022

capital

£000

premium

£000

Merger

reserve

£000

Own

shares held

£000

Retained

earnings

£000

Total

equity

£000

Balance at 31 March 2021 6,802 22,461 16,328 (595) 32,508 77,50 4

Total comprehensive expense for the year:

Loss for the year

— — — — (4,106) (4,106)

Total comprehensive expense recognised

for the year — — — — (4,106) (4,106)

Issue of share capital (note 24)

2 51 — — — 53

Share-based payment transactions

(net of tax) (note 22) — — — — 763 763

Movement in own shares held (note 24)

— — — (2,892) (143) (3,035)

Dividends (note 24)

— — — — (2,156) (2,156)

Total transactions with owners 2 51 — (2,892) (1,536) (4,375)

Balance at 31 March 2022 6,804 22,512 16,328 (3,487) 26,866 69,023

Company statement of changes in equity

for the year ended 31 March 2021

capital

£000

premium

£000

Merger

reserve

£000

Own

shares held

£000

Retained

earnings

£000

Total

equity

£000

Balance at 31 March 2020 6,132 22,340 1,521 (1,934) 21,766 49,825

Total comprehensive income for the year:

Proﬁt for the year — — — — 12,472 12,472

Total comprehensive income recognised

for the year — — — — 12,472 12,472

Issue of share capital (note 24) 670 121 14,807 — — 15,598

Share-based payment transactions

(net of tax) (note 22) — — — — 1,125 1,125

Movement in own shares held (note 24) — — — 1,339 (1,398) (59)

Dividends (note 24) — — — — (1,457) (1,457)

Total transactions with owners

670 121 14,807 1,339 (1,730) 15,207

Balance at 31 March 2021

6,802 22,461 16,328 (595) 32,508 7 7, 504

146 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Statements of ﬁnancial position

at 31 March 2022

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Non-current assets

Property, plant and equipment 10, 11

20 , 2 97

1 8 ,74 3

2,216

2,300

Right-of-use assets 12

12 , 757

11,958

Intangible assets 13, 14

42 , 9 81

38 ,452

7,027

5,691

Equity investments 15

—

42,298

42,320

Non-current trade and other receivables 19

—

66,344

44,318

Deferred tax assets 16, 17

2 ,7 87

2, 539

724

721

Total non-current assets 78,8 22

71 ,692

118,649

95,410

Current assets

Inventories 18

88 , 933

5 4 ,76 5

—

Trade and other receivables 19

60, 520

53, 194

1,888

2,375

Cash and cash equivalents 26

2 6 , 74 1

30,265

604

2,256

Total current assets 176 ,1 9 4

13 8,22 4

2,492

4,631

Total assets 3 25 5, 016 209 ,916 121,141 100,041

Current liabilities

Trade and other payables 21

45 , 249

41 ,13 3

1,569

5,506

Right-of-use liabilities 12, 20, 26

3,02 8

2,7 26

Tax payable

2 ,455

2,645

—

Total current liabilities 50,732

46,504

1,588

5,525

Non-current liabilities

Other interest-bearing loans and borrowings 20, 26

50,507

16,9 7 0

50,507

16,970

Right-of-use liabilities 12, 20, 26

10,6 83

10,0 6 0

Provisions 23

1,0 8 8

1,02 3

—

Deferred tax liabilities 16, 17

2 ,8 61

3,555

—

Total non-current liabilities 65 ,13 9

31,60 8

50,530

17,012

Total liabilities

11 5, 87 1

78 ,1 1 2

52,118

22,537

Net assets 139,145

131 , 80 4

69,023

77,504

Equity

Share capital

6,804

6, 8 02

6,804

6,802

Share premium

22 , 512

22,4 61

22,512

22,461

Merger reserve

16,328

16 , 328

16,328

Own shares held

(3 ,4 87)

(595)

(3,487)

(595)

Reserves

12, 284

—

Retained earnings

8 4, 70 4

9,524

 —

77,284 26,866

32,508

Total equity 139,145

131 , 80 4

69,023

77,504

The loss after tax for the Company is £(4.1)m (FY2021: proﬁt after tax £12.5m).

The notes on pages 148 to 197 form part of these ﬁnancial statements.

These ﬁnancial statements were approved by the Board of Directors on 25 July 2022 and were signed on its behalf by:

Mark Belton Clare Foster

Director Director

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 147

Statements of cash ﬂows

for the year ended 31 March 2022

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Cash ﬂows from operating activities

Proﬁt/(loss) for the year

8 , 97 7

5,7 9 0

(4,106)

12,472

Adjustments for:

Depreciation, amortisation and impairment 10, 11, 13, 14

4,125

3, 813

Right-of-use asset depreciation 12

3,1 3 1

3,2 29

Unrealised foreign currency gain

(3 4)

(17)

(45)

(23)

Financial income 8

(31)

(37)

(155)

(83)

Financial expense (excluding right-of-use liabilities) 8 692 696 683 708

Right-of-use liabilities’ ﬁnancial expense 8,12

326

313

—

Loss/(gain) on sale of property, plant and

equipment, intangibles and investments 6 (7) 145 —

Dividends received

—

(3,358)

(16,628)

Equity settled share-based payment charge

772

1,0 52

325

133

Loss from sale of TR Formac (Malaysia) SDN Bhd

—

280

—

108

Taxation charge 9

1,640

1,994

(13)

(268)

Costs incurred on issue of share capital

—

Operating cash inﬂow/(outﬂow) before changes

in working capital and provisions 1 9,604 1 7, 1 6 5 (6,421) (3,419)

Change in trade and other receivables

(5 , 9 5 0)

(3, 080)

916

2,239

Change in inventories

(31 ,7 1 6)

2,57 1

—

Change in trade and other payables

2, 922

7, 8 6 1

299

1,034

Change in provisions

—

Cash (used in)/generated from operations (1 5 ,14 0)

24, 5 8 1

(5,206)

(146)

Tax paid

(2 ,757)

(1,283)

—

Net cash (used in)/generated from operating activities (1 7, 8 9 7)

23, 298

(5,206)

(146)

Cash ﬂows from investing activities

Proceeds from sale of property, plant and equipment

—

Interest received

196

Acquisition of subsidiary, net of cash acquired

(5 , 8 47)

—

Acquisition of property, plant and equipment andintangibles 10, 11, 13, 14 (5 , 24 8) (3 ,0 6 0) (1,481) (1,603)

Lending to subsidiary undertakings

— — (21,638) —

Proceeds from sale of TR Formac (Malaysia) SDN Bhd, net of

cash held

— 33 — —

Dividends received

—

3,358

16,628

Net cash (used in)/from investing activities (11 ,02 8)

(2, 9 8 1)

(19,565)

15,107

Cash ﬂows from ﬁnancing activities

Proceeds from the issue of share capital 24

15,540

Purchase of own shares 24

(3,035)

(5 9)

(3,035)

(59)

Proceeds from new loan

32, 98 0

—

32,980

—

Repayment of borrowings

—

(26 , 65 6)

—

(26,390)

Repayment of loans from subsidiaries

—

(4,248)

—

Repayment of right-of-use liabilities 12

(2 , 97 7)

(3,658)

(19)

(18)

Dividends paid 24

(2 ,1 5 6)

(1 ,457)

(2,156)

(1,457)

Interest paid

(805)

(763)

(456)

(586)

Net cash from/(used in) ﬁnancing activities 24, 060

(1 7, 0 5 3)

23,119

(12,970)

Net change in cash and cash equivalents

(4 , 8 6 5)

3, 264

(1,652)

1,991

Cash and cash equivalents at 1 April

30, 265

28 ,7 27

2,256

265

Eect of exchange rate ﬂuctuations on cash held

1 , 3 41

(1 ,726)

—

Cash and cash equivalents at 31 March 2 6 , 74 1

30, 265

604

2,256

148 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements

for the year ended 31 March 2022

1 Accounting policies

a) Signiﬁcant accounting policies

Trifast plc (the ‘Company’) is a company incorporated in

the United Kingdom. The registered oce details are on

page 203.

The consolidated ﬁnancial statements consolidate those

of the Company and its subsidiaries (together referred

to as the ‘Group’). The Company ﬁnancial statements

present information about the Company as a separate

entity and not about its Group.

Statement of compliance

Both the Company ﬁnancial statements and the

consolidated ﬁnancial statements have been prepared

and approved by the Directors in accordance with

UK-adopted International Accounting Standards and

with the requirements of the Companies Act 2006 as

applicable to companies reporting under those standards

except asexplained below.

On publishing the Company ﬁnancial statements here

together with the consolidated ﬁnancial statements, the

Company is taking advantage of the exemption in s408

of the Companies Act 2006 not to present its individual

income statement and related notes that form a part of

these approved ﬁnancial statements.

The accounting policies set out below have,

unlessotherwise stated, been applied consistently

to all periodspresented in these Consolidated and

Companyﬁnancial statements.

A number of amendments to existing standards are also

eective from 1 April 2021 but they do not have a material

eect on the Group ﬁnancial statements.

There are a number of standards, amendments to

standards, and interpretations which have been issued

by the IASB that are eective in future accounting

periods that the Group has decided not to adopt early.

The following amendments are eective for the period

beginning 1 January 2022:

• Onerous Contracts – Cost of Fulﬁlling a Contract

(Amendments to IAS 37)

• Property, Plant and Equipment: Proceeds before

Intended Use (Amendments to IAS 16)

• Annual Improvements to IFRS Standards 2018-2020

(Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41)

• References to Conceptual Framework (Amendments

toIFRS 3)

The Group is currently assessing the impact of these

amendments and does not expect them to have a

signiﬁcant impact on the ﬁnancial statements.

b) Basis of preparation

The ﬁnancial statements are prepared in Sterling (which

is also the functional currency), rounded to the nearest

thousand. They are prepared onthe historical cost basis

with the exception of certain items which are measured

atfair value as disclosed in the accounting policies below.

The preparation of the ﬁnancial statements requires

management to make judgements, estimates and

assumptions that aect the application of policies and

reported amounts of assets and liabilities, income and

expenses. Actual results may dier from these estimates.

The estimates and underlying assumptions are reviewed

on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is

revised if the revision aects only that period or in the

period of the revision and future periods if the revision

aects current and future periods.

Judgements made by management in the application

of Adopted IFRS that have signiﬁcant eect on the

ﬁnancial statements and estimates with a signiﬁcant risk

of material adjustment in the next year are discussed

innote30.

Going concern

A review of the business activity and future

prospectsofthe Group (including the impact of

Covid-19) is coveredin the accompanying strategic

report. Theﬁnancial position of the Group, its cash ﬂows,

liquidityposition and borrowing facilities are speciﬁcally

described in the ﬁnancial review on pages 52 to 59.

Detailed information regarding the Group’s current facility

levels, liquidity, credit, interest and foreign exchange risk

are provided innote 26.

Current trading and forecasts show that the Group

willcontinue to be proﬁtable and generate cash.

Thebanking facilities and covenants that are in place

provide appropriate headroom against forecasts.

Considering the current forecasts, the Directors have

a reasonable expectation that the Group has adequate

resources to continue in operational existence for the

foreseeable future. This is also the case after performing

sensitivity analysis, the key inputs of which have been

disclosed on page 65. Thus they continue to adopt the

going concern basis of accounting in preparing the

annualﬁnancial statements.

c) Basis of consolidation

i) Subsidiaries

Subsidiaries are entities controlled by the Group. Control

exists when the Group has the power to direct relevant

activities of an entity so as to obtain beneﬁts from its

activities. In assessing control, potential voting rights

that are currently exercisable or convertible are taken

into account. The ﬁnancial statements of subsidiaries

are included in the consolidated ﬁnancial statements

from thedate that control commences until the date

thatcontrol ceases.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 149

ii) Transactions eliminated on consolidation

Intra-Group balances, and any unrealised gains and

losses or income and expenses arising from intra-Group

transactions, are eliminated in preparing the consolidated

ﬁnancial statements.

d) Foreign currency

i) Foreign currency transactions

Transactions in foreign currencies are translated at the

foreign exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign

currencies at the balance sheet date are translated to

functional currencies at the foreign exchange rate ruling

at that date. Foreign exchange dierences arising on

translation are recognised in the consolidated income

statement. Non-monetary assets and liabilities that are

measured in terms of historical cost in a foreign currency

are translated using the exchange rate at the date of

thetransaction.

ii) Financial statements of foreign operations

The assets and liabilities of foreign operations,

including goodwill and fair value adjustments arising

on consolidation, are translated to Sterling at foreign

exchange rates ruling at the balance sheet date.

Therevenues and expenses of foreign operations are

translated to Sterling at average rates of exchange for

the period, where this rate approximates to the foreign

exchange rates ruling at the dates of the transactions.

Foreign exchange dierences arising on retranslation

are recognised in a separate component of equity,

thetranslation reserve, through other comprehensive

income. They are released into the income statement

aspart of the gain or loss on disposal.

e) Hedge of net investment in foreign operations

The portion of the gain or loss on an instrument used

to hedge a net investment in a foreign operation that

is determined to be an eective hedge is recognised in

OCIand presented in the translation reserve within equity.

The ineective portion is recognised immediately in the

income statement. Theeective portion is recycled and

recognised in theincome statement upon disposal of

theoperation.

f) Property, plant and equipment

i) Owned assets

Property, plant and equipment are stated at cost or

deemed cost less accumulated depreciation (see below)

and impairment losses (see accounting policy (j)).

Certain items of property, plant and equipment that

hadbeen revalued to fair value on or prior to 1 April 2004,

thedate of transition to Adopted IFRS, are measured on

the basis of deemed cost, being the revalued amount at

the date of transition.

ii) Depreciation

Depreciation is charged to the income statement on a

straight-line basis over the estimated useful lives of each

part of an item of property, plant and equipment. Land is

not depreciated. The depreciation rates are as follows:

Freehold and long

leasehold buildings

— 2% per annum on a

straight-line basis or

theperiod of the lease

Short leasehold

properties

— period of the lease

Motor vehicles — 20–25% per annum on

astraight-line basis

Plant and machinery — 10–20% per annum on

astraight-line basis

Fixtures, ﬁttings and

oce equipment

— 10–25% per annum on

astraight-line basis

When parts of an item of property, plant and equipment

have dierent useful lives, those components are

accounted for as separate items of property, plant

and equipment. Where relevant, residual values are

reassessedannually.

iii) Right-of-use leases

The Group’s leases primarily comprise of right-of-use

assets regarding land and buildings, motor vehicles and

equipment. Short-term leases (<12 months) and leases

for which the underlying asset is of a low value (<£4k)

areexcluded.

The Group recognises a right-of-use asset and a lease

liability at the lease commencement date. The right-of-use

asset is initially measured at cost, and subsequently

at cost less any accumulated depreciation and

impairment losses. The right-of-use asset is subsequently

depreciated using the straight-line method from the

lease commencement date to the end of the lease term.

In addition, the right-of-use asset is periodically reduced

by impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

The lease liability is initially measured at the present value

of the lease payments (excluding non-lease components)

that are not paid at the commencement date, discounted

using the interest rate implicit in the lease or, if that rate

cannot be readily determined, the lessee’s incremental

borrowing rate. Generally, the Group uses its incremental

borrowing rate.

The lease liabilities are subsequently increased by the

interest cost on the lease liability and decreased by lease

payments made. The liability will be remeasured if there

is a change in the future lease payments or if there are

changes in the estimated length of the lease.

The lease period is established as the non-cancellable

period together with the opportunity to extend the lease

if the lessee is reasonably certain to utilise that option,

and periods covered by an opportunity to terminate

the lease if the lessee is reasonably certain not to

utilisethatoption.

150 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

1 Accounting policies continued

f) Property, plant and equipment continued

iv) Subsequent costs

The Group recognises in the carrying amount of an item

ofproperty, plant and equipment the cost of replacing

part of such an item when that cost is incurred, if it is

probable that the future economic beneﬁts embodied

within the item will ﬂow to the Group and the cost of

the item can be measured reliably. All other costs are

recognised in theincome statement as an expense

asincurred.

g) Intangible assets

i) On business combinations

All business combinations are accounted for by

applying the acquisition method. In respect of business

combinations that have occurred since 1 April 2004,

goodwill represents the dierence between the fair value

of the consideration transferred and the fair value of the

net identiﬁable assets acquired. Identiﬁable intangibles

are those which can be sold separately or which arise

from legal rights regardless of whether those rights

areseparable.

Costs related to the acquisition, other than those

associated with the issue of debt or equity securities,

are expensed as incurred. Any contingent consideration

payable is recognised at fair value at the acquisition date.

For non-equity amounts any subsequent changes to the

fair value are recognised in the proﬁt and loss.

Positive goodwill arising on acquisitions is stated

atcostless any accumulated impairment losses.

Goodwill isallocated to cash generating units and is

notamortised but is tested annually for impairment

(seeaccountingpolicy (j)).

Goodwill arising on acquisitions before 1 April 1998 was

written o to reserves in the year of acquisition. Under

IFRS 1 and IFRS 3, this goodwill will now remain eliminated

against reserves. Goodwill arising on acquisitions after

1April 1998 but before 31 March 2004 is included on the

basis of its deemed cost, which represents the amortised

amount recorded under UK GAAP as at 31 March 2004.

The classiﬁcation and accounting treatment of business

combinations that occurred prior to 1 April 2004 has not

been reconsidered in preparing the Group’s year-end

balance sheets.

Negative goodwill arising on an acquisition is recognised

directly in proﬁt or loss.

ii) Other intangible assets

Expenditure on Project Atlas is capitalised (currently

as an asset under the course of construction) as the

system is technically and commercially feasible, and

the Group intends to and has the technical ability and

sucient resources to complete development, future

economic beneﬁts are probable and the Group can

measure reliably the expenditure attributable to the asset

during its development. The expenditure capitalised is

directly attributable to the design and build of the new

system and includes the cost of materials and external

consultants as well as an appropriate allocation of

overheads. Other development expenditure is recognised

in the income statement as an expense as incurred.

Capitalised development expenditure is stated at cost

less accumulated amortisation and less accumulated

impairment losses. Currently no amortisation charges are

recognised in the ﬁnancial statements as the asset is not

ready for its intended use.

Intangible assets other than goodwill that are acquired

by the Group are stated at cost less accumulated

amortisation (see below) and impairment losses

(seeaccounting policy (j)).

Expenditure on internally generated goodwill and brands

is recognised in the income statement as an expense

asincurred.

iii) Subsequent expenditure

Subsequent expenditure on capitalised intangible assets

is capitalised only when it increases the future economic

beneﬁts embodied in the speciﬁc asset to which it relates.

All other expenditure is expensed as incurred.

iv) Amortisation

Amortisation is charged to the consolidated income

statement in administrative expenses on a straight-line

basis over the estimated useful lives of intangible

assets, unless such lives are indeﬁnite. Goodwill and

intangible assets with an indeﬁnite useful life are tested

systematically for impairment at each annual balance

sheet date. The amortisation rates of other intangible

assets per annum are as follows:

Customer relationships — 6.7% to 12.5%

Technology — 6.7% to 10%

Order backlog — 100%

Marketing – related — 8.3% to 20%

Other — 20% to 33%

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 151

h) Non-derivative ﬁnancial instruments

i) Investments in subsidiaries

Investments in subsidiaries are held in the Company

balance sheet at historic cost net of any impairment

(seeaccounting policy (j)).

ii) Trade and other receivables

Trade and other receivables are recognised initially at the

transaction price when they originated, and subsequently

at amortised cost less impairment losses (see accounting

policy (j)). Interest income, foreign exchange gains and

losses and impairment are recognised in proﬁt or loss.

Any gain or loss on derecognition is recognised in proﬁt

or loss.

iii) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and

call deposits with an original maturity of three months or

less. Bank overdrafts that are repayable on demand and

form an integral part of the Group’s cash management are

included as a component of cash and cash equivalents

only for the purpose of the statements of cash ﬂows.

iv) Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at

fair value net of any transaction costs. Subsequent to

initial recognition, interest-bearing borrowings are stated

at amortised cost using the eective interest method.

Interest expense and foreign exchange gains and losses

are recognised inproﬁt or loss. Any gain or loss on

derecognition is also recognised in proﬁt or loss.

v) Trade and other payables

Trade and other payables are recognised initially at

fairvalue. Subsequently they are measured at amortised

costusing the eective interest method. Interest expense

and foreign exchange gains and losses are recognised in

proﬁt or loss. Any gain or loss on derecognition is also

recognised in proﬁt or loss.

i) Inventories

Inventories are stated at the lower of cost and net

realisable value with provision being made for obsolete

and slow-moving items. This policy is applied consistently

across the Group, however the estimation techniques

used by the subsidiaries vary depending on the underlying

data available. In determining the cost of raw materials,

consumables and goods purchased for resale, a ﬁrst-in

ﬁrst-out purchase price is used and includes expenditure

incurred in acquiring the inventories and bringing them to

their existing location and condition. Forwork in progress

and ﬁnished goods manufactured by the Group, cost is

taken as production cost, which includes an appropriate

proportion of attributable overheads based on normal

operating capacity.

j) Impairment

The carrying amounts of the Group’s assets, other than

inventories (see accounting policy (i)), and deferred tax

assets (see accounting policy (p)), are reviewed at each

balance sheet date to determine whether there is any

indication of impairment.

Financial assets measured at amortised cost and

contractassets (as deﬁned in IFRS 15) are considered to

be credit-impaired if evidence indicates that one or more

events has had a negative eect on the estimated future

cash ﬂows of that asset.

When determining whether evidence indicates there

is a negative eect on estimated future cash ﬂows,

the Company considers reasonable and supportable

information that is relevant and available without

undue cost or eort. This includes both quantitative

and qualitative information and analysis, based on the

Company’s historical experience and informed credit

assessment and including forward-looking information.

Loss allowances for expected credit losses (ECLs) are

recognised when they are expected to arise as the present

value of all cash shortfalls (i.e. the dierence between

the cash ﬂows due to the entity in accordance with the

contract and the cash ﬂows that the Company expects to

receive). ECLs are discounted at the eective interest rate

of the ﬁnancial asset where appropriate.

The Company measures loss allowances at an amount

equal to lifetime ECL, except for other debt securities

and bank balances for which credit risk (i.e. the risk of

default occurring over the expected life of the ﬁnancial

instrument) has not increased signiﬁcantly since initial

recognition, which are measured as 12-month ECL.

Lifetime ECLs are the ECLs that result from all

possibledefault events over the expected life of a

ﬁnancial instrument. 12-month ECLs are the portion

ofECLs that result from default events that are possible

within the 12months after the reporting date (or a shorter

period if the expected life of the instrument is less than

12months).

The gross carrying amount of a ﬁnancial asset is written

o (either partially or in full) to the extent that there is no

realistic prospect of recovery.

For goodwill and other intangible assets that have an

indeﬁnite useful life, the recoverable amount is estimated

at each annual balance sheet date.

152 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

1 Accounting policies continued

j) Impairment continued

An impairment loss is recognised whenever the carrying

amount of an asset or its cash generating unit exceeds its

recoverable amount. Impairment losses are recognised

in the consolidated income statement unless the asset is

recorded at a revalued amount, in which case it is treated

as a revaluation decrease.

Impairment losses recognised in respect of cash

generating units are allocated ﬁrst to reduce the carrying

amount of any goodwill allocated to cash generating

units and then to reduce the carrying amount of the other

assets in the unit on a pro-rata basis. A cash generating

unit is the smallest identiﬁable group of assets that

generates cash inﬂows that are largely independent of

thecash inﬂows from other assets or groups of assets.

i) Calculation of recoverable amount

The recoverable amount is the greater of net selling price

and value in use. In assessing value in use, the estimated

future cash ﬂows are discounted to their present value

using a pre-tax discount rate that reﬂects current market

assessments of the time value of money and the risks

speciﬁc to the asset. For an asset that does not generate

largely independent cash inﬂows, the recoverable amount

is determined for the cash generating unit to which the

asset belongs.

ii) Reversals of impairment

An impairment loss in respect of goodwill is not reversed.

An impairment loss on any other asset is assessed at

each reporting date and is reversed only to the extent

that the asset’s carrying amount does not exceed the

carrying amount that would have been determined, net

of depreciation or amortisation, if no impairment loss had

been recognised.

k) Share capital

i) Dividends

Dividends to the Company’s shareholders are recognised

as a liability and deducted from shareholders’ equity in

the period in which the shareholders’ right to receive

payment is established.

ii) Classiﬁcation of share capital issued by

theGroup

Share capital issued by the Group is treated as equity as it

is a non-derivative that confers no contractual obligations

upon the Company or the Group to deliver cash or other

ﬁnancial assets with another party under conditions that

are potentially unfavourable.

l) Employee beneﬁts

i) Deﬁned contribution plans

The Group operates deﬁned contribution pension

schemes which include stakeholder pension plans.

Theassets of these schemes are held separately from

those of the Group in independently administered funds.

The amount charged against proﬁts represents the

contributions payable to the schemes in respect of the

accounting period. The Group pays ﬁxed contributions

and will have no legal or constructive obligation to pay

further amounts.

ii) Share-based payment transactions

The grant-date fair value of equity settled share-based

payment arrangements granted to employees is generally

recognised as an expense, with a corresponding increase in

equity, over the vesting period of the awards. The amount

recognised as an expense is adjusted to reﬂect the number

of awards for which the related service and non-market

performance conditions are expected to be met, such that

the amount ultimately recognised is based on the number

of awards that meet the related service and non-market

performance conditions at the vesting date. For

share-based payment awards with non-vesting conditions

and market performance conditions, the grant-date fair

value of the share-based payment is measured to reﬂect

such conditions and there is no true-up for dierences

between expected and actual outcomes.

The fair value of the amount payable to employees

in respect of cash settled awards is recognised as an

expense with a corresponding increase in liabilities

over the period during which the employees become

unconditionally entitled to payment. The liability is

remeasured at each reporting date and at settlement date

based on the fair value of the award. Any changes in the

liability are recognised in proﬁt or loss.

Where the Company grants awards over its own shares

to the employees of its subsidiaries, it recognises, in

its individual ﬁnancial statements, an amount owed by

subsidiary undertakings if the cost will be recharged.

Ifthe cost is not recharged, it is recognised as an increase

in the cost of investment in its subsidiaries In both

cases, the corresponding balance is recognised in equity

or liabilities depending on the method of settlement.

Theamount recognised is equivalent to the share-based

payment charge recognised in its consolidated

ﬁnancialstatements.

iii) Termination beneﬁts

Termination beneﬁts are recognised as an expense when

the Group is demonstrably committed, without realistic

possibility of withdrawal, to a formal plan to terminate

employment before the normal retirement date.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 153

m) Provisions

A provision is recognised in the balance sheet when the

Group has a present legal or constructive obligation as a

result of a past event, and it is probable that an outﬂow of

economic beneﬁts will be required to settle the obligation.

If the eect is material, provisions are determined by

discounting the expected future cash ﬂows at a pre-tax

rate that reﬂects current market assessments of the time

value of money and, when appropriate, the risks speciﬁc

to the liability.

n) Revenue

Revenue from the sale of goods rendered is recognised

net of VAT in the consolidated income statement

when the performance obligation is satisﬁed and the

customer obtains control which is based on customer

agreements. In accordance with normal practice, there

is a single performance obligation, which is on dispatch

of goods orat the point of customer acceptance where

appropriate. The transaction price is determined by

the invoice amount with adjustments made for variable

consideration (i.e. rebates) where applicable.

Payment terms across the Group vary dependent on the

geographic location of each operating company. Payment

is typically due between 30 and 90 days after the invoice

is issued.

Variable consideration relating to volume rebates has

been constrained in estimating revenue in order that it is

highly probable that there will not be a future reversal in

the amount of revenue recognised when the amount of

volume rebates has been determined.

o) Expenses

i) Short-term/low-value lease payments

Payments made under operating leases are recognised in

the consolidated income statement on a straight-line basis

over the term of the lease. Lease incentives received are

recognised in the consolidated income statement as an

integral part of the total lease expense.

ii) Repayment of right-of-use liabilities

Minimum lease payments are apportioned between the

ﬁnance charge and the reduction of the outstanding

liability. The ﬁnance charge is allocated to each period

during the lease term so as to produce a constant periodic

rate of interest on the remaining balance of the liability.

iii) Net ﬁnancing costs

Net ﬁnancing costs comprise interest payable on

borrowings and right-of-use liabilities calculated using

the eective interest rate method and interest receivable

on funds invested. Interest income is recognised in the

consolidated income statement as it accrues, using the

eective interest method. Net ﬁnance costs also include

the amortisation of arrangement fees and related costs.

p) Taxation

Tax on the proﬁt or loss for the period presented

comprises current and deferred tax. Tax is recognised in

the consolidated income statement except to the extent

that it relates to items recognised directly in equity,

inwhich case it is recognised in equity.

Current tax is the expected tax payable on the

taxableincome for the year, using tax rates enacted or

substantively enacted at the balance sheet date, and any

adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability

method, providing for temporary dierences between

the carrying amounts of assets and liabilities for ﬁnancial

reporting purposes and the amounts used for taxation

purposes. The following temporary dierences are

not provided for: the initial recognition of goodwill not

deductible for tax purposes, the initial recognition of

assets or liabilities that aect neither accounting nor

taxable proﬁt (applicable for all transactions other

than business combinations), and dierences relating

to investments in subsidiaries to the extent that they

will probably not reverse in the foreseeable future.

Theamount of deferred tax provided is based on the

expected manner of realisation or settlement of the

carrying amount of assets and liabilities, using tax

rates enacted or substantively enacted at the balance

sheetdate.

A deferred tax asset is recognised only to the extent that

it is probable that future taxable proﬁts will be available

against which the asset can be utilised. Deferred tax

assets are reduced to the extent that it is no longer

probable that the related tax beneﬁt will be realised.

Deferred tax assets and liabilities are oset when the

Group has a legally enforceable right to oset current

tax assets and liabilities and the deferred tax assets and

liabilities relate to taxes levied by the same tax authority

on either:

• The same taxable Group company

• Dierent Group entities which intend either

to settlecurrent tax assets and liabilities on a

net basis, or to realise the assets and settle the

liabilitiessimultaneously, in each future period in

whichsigniﬁcant amounts of deferred tax assets

orliabilities are expected to be settled or recovered

Additional income taxes that arise from the distribution

of dividends are recognised at the same time as the

liability to pay the related dividend. Information as to

the calculation of income tax on the proﬁt or loss for

theperiod presented is included in note 9.

154 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

1 Accounting policies continued

q) Operating segment reporting

A segment is a distinguishable component of the Group

that engages in business activities from which it may earn

revenues and incur expenditure (including revenues and

expenses relating to transactions with other components

of the same entity), whose operating results are regularly

reviewed by the Group’s Chief Operating Decision Maker

(the Operational Executive Board) in order to make

decisions about allocating resources and to assess its

performance, and for which discrete ﬁnancial information

is available.

The Group operates in a number of geographical

economic environments. The Company only operates

in one business segment, being the manufacture and

logistical supply of industrial fasteners and Category

‘C’components.

r) Financial guarantee contracts

Where the Company enters into ﬁnancial guarantee

contracts to guarantee the indebtedness of other

companies within its Group, the Company considers

these to be ﬁnancial guarantee contracts, and accounts

for them as such. In this respect, the Company treats the

guarantee contract as a contingent liability until such time

as it becomes probable that the Company will be required

to make a payment under the guarantee.

s) Earnings per share

The Group presents basic and diluted earnings per share

(EPS) data for its ordinary shares. Basic EPS is calculated

by dividing the proﬁt or loss attributable to ordinary

shareholders of the Company by the weighted average

number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the weighted

average number of ordinary shares outstanding for the

eects of all dilutive potential ordinary shares, which

comprise share options and deferred equity awards

granted to employees.

t) Underlying measure of proﬁts and losses

The Group believes that underlying operating proﬁt and

underlying proﬁt before tax provide additional guidance

to statutory measures to help understand the underlying

performance of the business during the ﬁnancial period.

The term ‘underlying’ is not deﬁned under Adopted IFRS.

It is a measure that is used by management to assess the

underlying performance of the business internally and

is not intended to be a substitute measure for Adopted

IFRS GAAP measures. The Group deﬁnes these underlying

measures as follows:

Underlying proﬁt before tax is proﬁt before taxation and

separately disclosed items (see note 2).

Underlying proﬁt after tax is proﬁt after taxation but

before separately disclosed items (see note 2) and is

usedin the calculation of underlying earnings per share.

Underlying operating and segment results (see note

3) areoperating and segment proﬁt before separately

disclosed items.

It should be noted that the deﬁnitions of underlying items

being used in these ﬁnancial statements are those used

by the Group and may not be comparable with the term

‘underlying’ as deﬁned by other companies within the

same sector or elsewhere.

Separately disclosed items are included within the income

statement caption to which they relate.

u) Separately disclosed items (see note 2)

Separately disclosed items are those signiﬁcant items

which in management’s judgement should be highlighted

by virtue of their size or incidence to enable a full

understanding of the Group’s ﬁnancial performance.

v) Own shares acquired by Employee Beneﬁt Trust

The Employee Beneﬁt Trust (EBT) provides for the

issue of shares to Group employees under share-based

payment arrangements. The Company is the sole funder

of the EBT, and all shares and assets held by the EBT are

held under a trust arrangement for the beneﬁt of Group

employees and the Company, and the Company therefore

accounts for the EBT as an extension to the Company in

the ﬁnancial statements.

Repurchased shares (classiﬁed as own shares acquired)

are recognised at the amount of consideration paid,

which includes directly attributable costs, as a deduction

from equity. They are presented separately in equity as

own shares held. When the shares are subsequently sold

or used to settle future equity award commitments, the

amount received is recognised as an increase in equity.

w) Government grants

Grants for revenue expenditure are netted against

the cost incurred by the Group. Where retention of a

government grant is dependent on the Group satisfying

certain criteria, it is initially recognised as deferred

income. When the criteria for retention have been

satisﬁed, the deferred income balance is released

totheconsolidated income statement.

The Group applied for various government support

programmes introduced in response to the global

pandemic. Included in the consolidated income

statement is £0.1m (FY2021: £2.1m) of government

grants obtained relating to supporting the payroll of the

Group’s employees. The Group has elected to reduce the

relatedexpense.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 155

2 Underlying proﬁt before tax and separately disclosed items

Note

2022

£000

2021

£000

Underlying proﬁt before tax

13,759

11,010

Separately disclosed items within administrative expenses

Acquired intangible amortisation 13

(1,593)

(1,428)

Project Atlas

(1,041)

(1,082)

Restructuring costs

—

(377)

Loss on disposal of TR Formac (Malaysia)

SDN Bhd

—

(280)

Equity raise costs

—

(59)

Acquisition costs 36

(508)

—

Proﬁt before tax

10,617

7,78 4

Note

2022

£000

2021

£000

Underlying EBITDA

20,409

17,59 6

Separately disclosed items within administrative expenses

Project Atlas

(1,041)

(1,082)

Restructuring costs

—

(377)

Loss on disposal of TR Formac (Malaysia)

SDN Bhd

—

(280)

Equity raise costs

—

(59)

Acquisition costs 36

(508)

—

EBITDA 18,860

15,798

Acquired intangible amortisation 13

(1,593)

(1,428)

Depreciation and non-acquired amortisation

(5,663)

(5,614)

Operating proﬁt

11,604

8,756

In addition to the above, there were £0.4m separately disclosed items in relation to VIC patent box claims set against

the tax charge in FY2022 (FY2021: £nil).

Recurring items

Acquired intangible amortisation has increased by £0.2m to £1.6m (FY2021: £1.4m) due to the acquisition of Falcon.

Intangible amortisation relating to acquisitions has been separately disclosed since this does not relate to the trading

performance of the respective entities with a charge.

Event-driven/one-o items

Project Atlas is a multi-year investment into our IT infrastructure and underlying business processes, budgeted to cost

£17.5m. As a consequence of the work undertaken to date on this project, we have incurred direct costs of £1.0m in

FY2022 (FY2021: £1.1m), largely relating to the project team and the ongoing roll-out. We have excluded these costs

from our underlying results, to reﬂect the unusual scale and one-o nature of this project. Weanticipate continuing

to do so in order to provide shareholders with a better understanding of our underlying trading performance during

this period of investment. This investment will be recorded as a combination of capital expenditure and separately

disclosed items, dependent on accounting convention. The ﬁnancial impact of the work undertaken to date on this

project totals direct costs of £2.6m in FY2022 (cumulatively £14.9m) of which £1.6m has been recognised (cumulatively

£7.2m) as assets on the balance sheet).

Restructuring costs of £nil were incurred in the year. In FY2021 £0.4m of restructuring costs were incurred as a result of

a detailed review of our underlying cost base.

There were no disposals of subsidiaries in the year. In FY2021, following a strategic review of the Group’s businesses

around the world, the Board made the decision to dispose of our smallest manufacturing site in Malaysia, incurring a

loss of £0.3m.

Equity raise costs of £nil were incurred in the year. In FY2021 the Company conducted an equity raise to ensure that the

Group can continue to support its long-term strategic investments as well as being able to maximise its growth in the

short term as markets recover. Costs of £0.1m were recognised in the income statement in relation to this.

156 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

2 Underlying proﬁt before tax and separately disclosed items continued

Event-driven/one-o items continued

Net acquisition costs of £0.5m (FY2021: £nil) were incurred in the year in relation to the acquisition of Falcon on

31August 2021, see note 36.

Management remove the one-o costs and certain non-trading items discussed above to allow the reader of the

accounts to understand the underlying trading performance of the Group. Further reconciliations of underlying

measures to GAAP measures can be found in note 32.

3 Operating segmental analysis

Segment information, as discussed in note 1 (q), is presented in the consolidated ﬁnancial statements in respect of

the Group’s geographical segments. This reﬂects the Group’s management and internal reporting structure, and the

operating basis on which individual operations are reviewed by the Chief Operating Decision Maker (the Operational

Executive Board). Performance is measured based on each segment’s underlying operating result as included in

the internal management reports that are reviewed by the Chief Operating Decision Maker. This is used to measure

performance as management believes that such information is the most relevant in evaluating the results of certain

segments relative to other entities that operate within the industry.

Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and liabilities include items

directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Goodwill and intangible assets acquired on business combinations are included in the region to which they relate.

Geographical operating segments

The Group is comprised of the following main geographical operating segments:

• UK

• Europe includes Norway, Sweden, Hungary, Ireland, Holland, Italy, Germany, Spain and Poland

• North America includes USA and Mexico

• Asia includes Malaysia, China, Singapore, Taiwan, Thailand, India and Philippines

In presenting information on the basis of geographical operating segments, segment revenue and segment assets

are based on the geographical location of our entities across the world and are consolidated into the four distinct

geographical regions, which the Operational Executive Board uses to monitor and assess the Group. Interest is

reported on a net basis rather than gross as this is how it is presented to the Chief Operating Decision Maker.

Allmaterial non-current assets are located in the country the relevant Group entity is incorporated in.

March 2022

£000

Europe

£000

North

America

£000

Asia

£000

Common

amounts

£000

Total

£000

Revenue

Revenue from external customers

77,056 78,482 17, 535 45,545 — 218,618

Inter-segment revenue

6,805 2,089 191 9,805 — 18,890

Total revenue

83,861 80,571 17,726 55,350 — 237, 508

Underlying operating result 8,122 3,858 (72) 7,123 (4,285) 14,746

Net ﬁnancing costs

(125) (169) (107) (58) (528) (987)

Underlying segment result

7,997 3,689 (179) 7,065 (4,813) 13,759

Separately disclosed items (see note 2)

(3,142)

Proﬁt before tax 10,617

Speciﬁc disclosure items

Depreciation and amortisation

(2,184) (2,731) (554) (1,685) (102) (7, 256)

Government support income

— — — 76 8 84

Assets and liabilities

Non-current asset additions

1,962 3,269 1,381 54 1,481 8,147

Segment assets

74,479 81,125 22,472 65,593 11,347 255,016

Segment liabilities

(25,929) (20,339) (4,389) (13,243) (51,971) (115,871)

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 157

March 2021

£000

Europe

£000

North

America

£000

Asia

£000

Common

amounts

£000

Total

£000

Revenue

Revenue from external customers 64,116 72,151 9,596 42,298 — 188,161

Inter-segment revenue 4,776 1,359 143 6,987 — 13,265

Total revenue 68,892 73,510 9,739 49,285 — 201,426

Underlying operating result

3,744 5,221 (574) 6,522 (2,931) 11,982

Net ﬁnancing costs (129) (105) (64) (48) (626) (972)

Underlying segment result 3,615 5,116 (638) 6,474 (3,557) 11,010

Separately disclosed items (see note 2) (3,226)

Proﬁt before tax

7,78 4

Speciﬁc disclosure items

Depreciation and amortisation (2,000) (2,787) (237) (1,915) (103) (7,042)

Government support income 679 373 — 976 35 2,063

Assets and liabilities

Non-current asset additions 818 1,161 19 1,041 1,658 4,697

Segment assets 63,441 67,309 8,002 59,300 11,864 209,916

Segment liabilities (26,559) ( 17, 935) (1,860) (13,344) (18,414) (78,112)

There were no material dierences in Europe and North America between the external revenue based on location of

the entities and the location of the customers. Of the UK external revenue, £16.2m (FY2021: £13.1m) was sold into the

European market. Of the Asian external revenue, £9.0m (FY2021: £3.9m) was sold into the North American market

and£9.8m (FY2021: £3.6m) was sold into the European market.

Within Europe, TR VIC has revenue of £28.3m (FY2021: £27.9m) and non-current assets of £13.1m (FY2021: £13.0m).

Within Asia, TR Formac Singapore has revenue of £20.3m (FY2021: £20.3m) and non-current assets of £4.4m

(FY2021:£4.2m).

Revenue is derived solely from the manufacture and logistical supply of industrial fasteners and Category

‘C’components.

4 Other operating income

2022

£000

2021

£000

Rental income received from freehold properties

Other income

553

583

565

595

Included within other income is £0.1m (FY2021: £0.2m) of R&D tax credits.

158 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

5 Expenses and auditor’s remuneration

Included in proﬁt for the year are the following:

Note

2022

£000

2021

£000

Depreciation and non-acquired amortisation 10, 13

2,532

2,385

Right-of-use assets depreciation 12

3,131

3,229

Amortisation of acquired intangibles 13

1,593

1,428

Short-term/low-value lease expense 12

162

125

Net foreign exchange loss

515

1,364

Project Atlas

1,041

1,082

Gain/(loss) on disposal of ﬁxed assets

(7)

The employee beneﬁt expense recognised in the year is disclosed in note 22.

Auditor’s remuneration:

2022

£000

2021

£000

Audit of these ﬁnancial statements

240

179

Audit of ﬁnancial statements of subsidiaries pursuant to legislation

299

304

Other assurance services

Total 593

541

Other assurance services mainly relate to the interim review.

6 Sta numbers and costs

The average number of people employed by the Group (including Directors) during the year, analysed by category,

wasas follows:

Group Company

Number of employees Number of employees

2022 2021 2022 2021

Oce and Management

116

112

Manufacturing

338

327

—

Sales

194

188

—

Distribution

632

612

—

1,280

1,239

The aggregate payroll costs of these people were as follows:

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Wages and salaries (including accrued bonus)

38,185

32,936

2,398

1,570

Share-based payments

760

1,092

325

133

Social security costs

4,028

3,644

371

363

Contributions to deﬁned contribution plans (see note 22)

2,143

1,931

185

195

45,116

39,603

3,279

2,261

The payroll costs above are shown gross of income from government support schemes, totalling £0.1m (FY2021: £2.1m),

see note 1 (w).

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 159

7 Directors’ emoluments

2022

£000

2021

£000

Directors’ emoluments

1,097

838

Company contributions to money purchase pension plans

Pension cash payments

1,194

930

The emoluments of individual Directors, as well as the total gain on exercise of share options by Directors, are shown in

the remuneration report on pages 109 to 129.

The aggregate emoluments of the highest paid Director excluding pensions was £0.45m (FY2021: £0.31m), which

included no vested LTIP or deferred equity award (FY2021: £nil), Company pension contributions of £4k (FY2021: £4k)

made to a money purchase scheme on his behalf and pension cash payments of £0.05m (FY2021: £0.05m). During the

year, no SAYE share options or deferred equity shares were exercised by the highest paid Director (FY2021: nil SAYE

share options exercised, no deferred equity shares exercised).

The annual IFRS 2 charge relating to Board deferred equity bonuses was £nil (FY2021: £nil). The annual IFRS 2 charge

relating to Board LTIP shares was £0.11m (FY2021: £0.04m). which includes a reversal of a charge for the FY2020 LTIPs

relating to G Roberts for when she was a Board Director. The highest paid Director’s element of this charge was £0.11m

(FY2021: £0.03m)

Number of Directors

2022 2021

Retirement beneﬁts are accruing to the following number of Directors

under money purchase schemes

The number of Directors who exercised share options was

See pages 109 to 129 of the remuneration report for more details.

Directors’ rights to subscribe for shares in the Company are also set out in the remuneration report.

8 Financial income and expense

2022

£000

2021

£000

Financial income

Interest income on ﬁnancial assets

Financial expenses

Interest payable on bank loans, IFRS 16 right-of-use liabilities

1,018

1,009

FY2022 includes £0.3m of additional interest on the right-of-use liabilities in compliance with IFRS 16, see note 12

(FY2021: £0.3m).

160 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

9 Taxation

Recognised in the income statement

2022

£000

2021

£000

Current UK tax expense:

Current year

—

Adjustments for prior years

(1)

Current foreign tax expense:

Current year

2,562

2,619

Adjustments for prior years

(65)

2,497

2,695

Total current tax

2,537

2,738

Deferred tax expense (note 16):

Origination and reversal of temporary dierences

(474)

(754)

Change in tax rates

(156)

—

Adjustments for prior years

(267)

Deferred tax income

(897)

(744)

Tax in income statement 1,640

1,994

2022

£000

2021

£000

Current tax recognised directly in equity – IFRS 2 share-based tax credit

—

(30)

Deferred tax recognised directly in equity – IFRS 2 share-based tax charge/(credit)

(72)

Total tax recognised in equity 30

(102)

Reconciliation of eective tax rate (ETR) and tax expense

2022

£000

ETR

2021

£000

ETR

Proﬁt for the period

8,977

5,790

Tax from continuing operations

1,640

1,994

Proﬁt before tax

10,617

7,78 4

Tax using the UK corporation tax rate of 19% (FY2021: 19%)

2,017 19

1,479 19

Tax suered on dividends

354 3

387 5

Non-deductible expenses

225 2

135 2

Non-taxable receipts

(284) (2)

(298) (4)

Tax incentives

(386) (4)

— —

IFRS 2 share option charge

116 1

1 —

Deferred tax assets not recognised

46 —

94 1

Dierent tax rates on overseas earnings

— —

111 2

Adjustments in respect of prior years

(292) (3)

85 1

Tax rate change (156) (1) — —

Total tax in income statement 1,640 15

1,994 26

An increase in the UK tax rate from 19% to 25% (eective 1 April 2023) was substantively enacted on 24 May 2021.

Thiswill increase the Company’s future current tax charge accordingly. Deferred tax has been calculated based on

these enacted rates.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 161

10 Property, plant and equipment – Group

Land and

buildings

£000

Leasehold

improvements

£000

Plant and

equipment

£000

Fixtures and

ﬁttings

£000

Motor

vehicles

£000

Total

£000

Cost

Balance at 1 April 2020 17,545 1,100 33,832 7,989 781 61,247

Additions 5 4 1,172 205 31 1,417

Disposals — — (455) (83) (17) (555)

Eect of movements in foreign exchange (615) (35) (1,400) (150) (33) (2,233)

Balance at 31 March 2021

16,935 1,069 33,149 7,9 61 762 59,876

Balance at 1 April 2021 16,935 1,069 33,149 7,9 61 762 59,876

Additions 323 629 2,210 456 114 3,732

Acquisitions — 164 54 282 55 555

Disposals — (114) (92) (55) (91) (352)

Eect of movements in foreign exchange 208 33 544 89 17 891

Balance at 31 March 2022 17,466 1,781 35,865 8,733 857 64,702

Depreciation and impairment

Balance at 1 April 2020 6,003 894 27,913 5,360 650 40,820

Depreciation charge for the year 282 41 1,505 489 41 2,358

Disposals — — (425) (79) (17) (521)

Eect of movements in foreign exchange (197) (25) (1,158) (116) (28) (1,524)

Balance at 31 March 2021

6,088 910 27, 835 5,654 646 41,133

Balance at 1 April 2021 6,088 910 27, 835 5,654 646 41,133

Depreciation charge for the year 278 76 1,507 596 52 2,509

Acquisitions — 117 26 242 49 434

Disposals — (123) (77) (39) (73) (312)

Eect of movements in foreign exchange 50 30 466 77 18 641

Balance at 31 March 2022 6,416 1,010 29,757 6,530 692 44,405

Net book value

At 1 April 2020 11,542 206 5,919 2,629 131 20,427

At 31 March 2021 10,847 159 5,314 2,307 116 18,743

At 31 March 2022 11,050 771 6,108 2,203 165 20,297

Included in the net book value of land and buildings is £11.1m (FY2021: £10.8m) of freehold land and buildings.

Withinthis ﬁgure there is £1.7m (FY2021: £1.7m) of buildings that are on long leasehold land.

The Group had commitments for future capital expenditure not provided for in the accounts of £1.7m (FY2021: £nil).

The addition in plant and equipment in the year includes Project Atlas additions of £0.5m (FY2021: <£0.1m). A total of

£1.6m (FY2021: £1.2m) has been capitalised in relation to Project Atlas in the year with the remaining £1.1m (FY2021:

£1.2m) recognised in intangible assets, see note 13.

162 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

11 Property, plant and equipment – Company

Land and

buildings

£000

Fixtures and

ﬁttings

£000

Total

£000

Cost

Balance at 1 April 2020, 31 March 2021 and 2022 3,905 579 4,484

Depreciation and impairment

Balance at 1 April 2020 1,533 567 2,100

Depreciation charge for the year 81 3 84

Balance at 31 March 2021

1,614 570 2,184

Balance at 1 April 2021 1,614 570 2,184

Depreciation charge for the year 81 3 84

Balance at 31 March 2022 1,695 573 2,268

Net book value

At 1 April 2020 2,372 12 2,384

At 31 March 2021 2,291 9 2,300

At 31 March 2022 2,210 6 2,216

Included in the net book value of land and buildings is £2.2m (FY2021: £2.3m) of freehold land and buildings.

12 IFRS 16 – Group

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

• Leases of low-value assets

• Leases with a duration of 12 months or less

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term,

with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this

is not readily determinable, in which case the lessee’s incremental borrowing rate on commencement of the lease is

used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index

orrate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged

throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

• Amounts expected to be payable under any residual value guarantee

• The exercise price of any purchase option granted in favour of the Group if it is reasonably certain to access

thatoption

• Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of

termination option being exercised

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received,

and increased for:

• Lease payments made at or before commencement of the lease

• Initial direct costs incurred

• The amount of any provision recognised where the Group is contractually required to dismantle, remove or restore

the leased asset

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the

balance outstanding and are reduced for lease payments made. Right-of-use assets are depreciated on a straight-line

basis over the remaining term of the lease.

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a

lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reﬂect

the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value

of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index

is revised, which are discounted at the same discount rate that applied on lease commencement. In both cases an

equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being

amortised over the remaining (revised) lease term.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 163

When the Group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature

ofthe modiﬁcation:

• If the renegotiation results in one or more additional assets being leased for an amount commensurate with the

standalone price for the additional rights-of-use obtained, the modiﬁcation is accounted for as a separate lease

inaccordance with the above policy

• In all other cases where the renegotiation increases the scope of the lease (whether that is an extension to the

lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount

rateapplicable on the modiﬁcation date, with the right-of-use asset being adjusted by the same amount

• If the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability

and right-of-use asset are reduced by the same proportion to reﬂect the partial or full termination of the lease, with

any dierence recognised in proﬁt or loss. The lease liability is then further adjusted to ensure its carrying amount

reﬂects the amount of the renegotiated payments over the renegotiated term, with the modiﬁed lease payments

discounted at the rate applicable on the modiﬁcation date. The right-of-use asset is adjusted by the same amount

The Group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the Group will consider

whether the absence of a break clause would expose the Group to excessive risk.

Typically, factors considered in deciding to negotiate a break clause include:

• The length of the lease term

• The economic stability of the environment in which the property is located

• Whether the location represents a new area of operations for the Group

At 31 March 2022 the carrying amounts of lease liabilities are not reduced by the amount of payments that would be

avoided from exercising break clauses because it was considered reasonably certain that the Group would not exercise

any right to break these leases.

Nature of leasing activities (in the capacity as lessee)

The Group leases several properties in the jurisdictions from which it operates. In some jurisdictions it is customary

for lease contracts to provide for payments to increase each year by inﬂation and in others to be reset periodically to

market rental rates. For some of the Group’s property leases the periodic rent is ﬁxed over the lease term.

The Group also leases certain items of plant and equipment and vehicles which comprise only ﬁxed payments over

thelease terms.

The percentages in the table below reﬂect the current proportions of total lease payments that are either ﬁxed or

variable. The sensitivity reﬂects the impact on the carrying amount of lease liabilities and right-of-use total assets

ifthere was an uplift of 1% on the balance sheet date to lease payments that are variable.

Lease

contracts

(number)

Fixed

payments

Variable

payments

Sensitivity

£000

Property leases with periodic uplifts to market rentals or inﬂation 8 — 20 28

Property leases with ﬁxed payments 38 72 — —

Leases of equipment and vehicles 132 8 — —

At 31 March 2022 178 80 20 28

Lease

contracts

(number)

Fixed

payments

Variable

payments

Sensitivity

£000

Property leases with periodic uplifts to market rentals or inﬂation 6 — 21 27

Property leases with ﬁxed payments 42 71 — —

Leases of equipment and vehicles 120 8 — —

At 31 March 2021 168 79 21 27

164 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

12 IFRS 16 – Group continued

Right-of-use assets (Group)

Land and

buildings

£000

Motor

vehicles

£000

Equipment

£000

Total

£000

At 1 April 2020

12,666 1,038 84 13,788

New leases 996 556 13 1,565

Rent review 72 — — 72

Depreciation (2,641) (559) (29) (3,229)

Disposals (68) — — (68)

Foreign exchange movements (165) (5) — (170)

At 1 April 2021 10,860 1,030 68 11,958

New leases 1,442 582 23 2,047

Rent review 853 — — 853

Acquisitions 890 — — 890

Depreciation (2,572) (533) (26) (3,131)

Foreign exchange movements 150 (10) — 140

At 31 March 2022 11,623 1,069 65 12,757

Right-of-use liabilities (Group)

Land and

buildings

£000

Motor

vehicles

£000

Equipment

£000

Total

£000

At 1 April 2020

13,966 1,055 88 15,109

New leases 996 556 13 1,565

Rent review 72 — — 72

Lease payments (3,363) (576) (32) (3,971)

Interest 294 18 1 313

Disposals (68) — — (68)

Foreign exchange movements (224) (9) (1) (234)

At 1 April 2021 11,673 1,044 69 12,786

New leases 1,403 582 23 2,008

Rent review 853 — — 853

Acquisitions 867 — — 867

Lease payments (2,709) (565) (29) (3,303)

Interest 300 25 1 326

Foreign exchange movements 178 (4) — 174

At 31 March 2022 12,565 1,082 64 13,711

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 165

2022

£000

2021

£000

Short-term lease expense

125

Low-value lease expense

Aggregate undiscounted future commitments for short-term and low-value leases

133

124

There have been no sale and leaseback transactions in the current or prior year.

Under

1 year

£000

Between 1

and 2 years

£000

Between 2

and 5 years

£000

Over

5 years

£000

Total

£000

At 31 March 2022

Lease liabilities

3,028 2,433 4,466 3,784 13,711

Under

1 year

£000

Between 1

and 2 years

£000

Between 2

and 5 years

£000

Over

5 years

£000

Total

£000

At 31 March 2021

Lease liabilities 2,726 2,182 4,280 3,598 12,786

13 Intangible assets – Group

Assets

under

course of

construction

£000

Goodwill

£000

Other

£000

Total

£000

Cost

Balance at 1 April 2020 4,088 45,925 20,433 70,446

Additions 1,603 — 40 1,643

Eect of movements in foreign exchange — (1,077) (563) (1,640)

Balance at 31 March 2021

5,691 44,848 19,910 70,449

Balance at 1 April 2021 5,691 44,848 19,910 70,449

Additions 1,481 — 34 1,515

Acquired through business combinations — 1,200 2,908 4,108

Eect of movements in foreign exchange — 569 43 612

Balance at 31 March 2022 7,172 46,617 22,895 76,684

Amortisation and impairment

Balance at 1 April 2020 — 22,144 9,147 31,291

Amortisation for the year — — 1,455 1,455

Eect of movements in foreign exchange — (417) (332) (749)

Balance at 31 March 2021

— 21,727 10,270 31,997

Balance at 1 April 2021 — 21,727 10,270 31,997

Amortisation for the year — — 1,616 1,616

Eect of movements in foreign exchange — 132 (42) 90

Balance at 31 March 2022 — 21,859 11,844 33,703

Net book value

At 1 April 2020 4,088 23,781 11,286 39,155

At 31 March 2021 5,691 23,121 9,640 38,452

At 31 March 2022 7,172 24,758 11,051 42,981

166 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

13 Intangible assets – Group continued

The addition in assets under the course of construction in the year includes Project Atlas additions of £1.1m (FY2021:

£1.2m). A total of £1.6m (FY2021: £1.2m) has been capitalised in relation to Project Atlas in the year with the remaining

£0.5m (FY2021: <£0.1m) recognised in property, plant and equipment, see note 10.

Included within other intangibles are customer relationship intangible assets of £8.9m (FY2021: £7.8m), know-how of

£0.5m (FY2021: £0.8m), marketing-related intangibles of £1.2m (FY2021: £0.8m) and other of £0.4m (FY2021: £0.1m).

The amortisation charge is recognised in administrative expenses in the income statement. Of the £1.6m charge in the

year, £1.6m relates to amortisation on acquired intangibles.

Other intangible assets are made up of:

• Customer relationships acquired as part of the acquisition of PSEP. The remaining amortisation period left on these

assets is 1.8 years and NBV is <£0.1m

• Customer relationships, technology know-how and technology patents acquired as part of the acquisition of VIC.

The average remaining amortisation period on these assets is 6.4 years and NBV is £3.4m

• Customer relationships acquired as part of the acquisition of Kuhlmann. The average remaining amortisation period

on these assets is 3.5 years and NBV is £1.3m

• Customer relationships and marketing-related intangibles acquired as part of the acquisition of PTS. The average

remaining amortisation period on these assets is 10.4 years and NBV is £3.5m

• Customer relationships, marketing-related and contract-based intangibles acquired as part of the acquisition of

Falcon. The average remaining amortisation period on these assets is 9.5 years and NBV is £2.8m

The following cash generating units have carrying amounts of goodwill:

2022

£000

2021

£000

Special Fasteners Engineering Co. Ltd (Taiwan)

10,632

10,206

TR Fastenings AB (Sweden)

1,063

Lancaster Fastener Company Ltd (UK)

1,245

Serco Ryan Ltd (within TR Fastenings Ltd) (UK)

4,083

TR VIC SPA (VIC) (Italy)

2,860

2,886

TR Kuhlmann GmbH (Germany)

1,478

1,491

TR Falcon Fastenings Inc

1,250

—

Precision Technology Supplies Ltd (UK)

2,043

Other

104

24,758

23,121

The changes in goodwill for SFE, VIC, Kuhlmann, and Falcon (post acquisition) relate to foreign exchange gains or

losses, as these investments are held in Singaporean Dollars, Euros and US Dollars respectively.

Annual impairment testing

The Group tests goodwill annually for impairment. The recoverable amount of cash generating units is determined

fromvalue in use calculations.

Value in use was determined by discounting the future cash ﬂows generated from the continuing use of the unit. In this

method, the free cash ﬂows after funding internal needs of the subject company are forecast for a ﬁnite period of four

years based on actual operating results, budgets and economic market research. Beyond the ﬁnite period, a terminal

(residual) value is estimated using an assumed stable cash ﬂow ﬁgure.

The values assigned to the key assumptions represent management’s assessment of future trends in the fastenings

market and are based on both external and internal sources of historical data. Further information on sources of data

used can be found in each description of the key assumptions below.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 167

The recoverable amounts of Special Fasteners Engineering Co. Ltd (Taiwan), TR VIC SPA (Italy) and Serco Ryan Ltd

(within TR Fastenings Ltd) (UK) have been calculated with reference to the key assumptions shown below:

SFE VIC Serco

2022 2021 2022 2021 2022 2021

Long-term revenue growth rate

2.0%

1.6%

2.0%

Discount rate – post-tax

6.5%

6.8%

8.9%

8.4%

7.1%

7.0%

Discount rate – pre-tax

8.1%

8.5%

12.4%

11.6%

8.8%

8.6%

Terminal EBIT margin

15.3%

13.6%

13.4%

7.2%

8.2%

Key assumptions are not disclosed for the remaining CGUs as the goodwill is not signiﬁcant in comparison to the

carrying amount of goodwill.

Long-term revenue growth rate

Long-term growth rates into perpetuity have been determined as the lower of:

• The nominal GDP rates for the country of operation

• The long-term compound annual growth rate in EBITDA in years six to ten estimated by management

Post-tax risk adjusted discount rate

The discount rate applied to the cash ﬂows of each of the Group’s operations is based on the Weighted Average

Costof Capital (WACC) (using post-tax numbers). The cost of equity element uses the risk-free rate for ten-year bonds

issued by the government in the respective market, adjusted for a risk premium to reﬂect both the increased risk of

investing in equities and the systemic risk of the speciﬁc Group operating company.

In making this adjustment, inputs required are the equity market risk premium (that is, the increased return required

over and above a risk-free rate by an investor who is investing in the market as a whole) and the risk adjustment, beta,

applied to reﬂect the risk of the speciﬁc Group operating company relative to the market as a whole.

In determining the risk adjusted discount rate, management has applied an adjustment for the systemic risk to each

of the Group’s operations determined using an average of the betas of comparable listed fastener distribution and

manufacturing companies and, where available and appropriate, across a speciﬁc territory. Management has used

an equity market risk premium that takes into consideration studies by independent economists, the average equity

market risk premium over the past ﬁve years and the market risk premiums typically used by investment banks in

evaluating acquisition proposals.

To calculate the pre-tax discount rate we have taken the post-tax discount rate and divided this by one minus the

applicable tax rate. We consider this an appropriate approximation of the pre-tax rate as there are no signiﬁcant timing

dierences between the tax cash ﬂows and tax charges. The table above discloses the discount rate on a post and

pre-tax basis. This takes into account certain components such as the various discount rates reﬂecting dierent risk

premiums and tax rates in the respective regions. Overall, theBoard is conﬁdent that the discount rate adequately

reﬂects the circumstances in each location and is in accordance with IAS 36.

Terminal EBIT margin

The margins used in the value in use calculations are based on historic performance adjusted for any known or

expected changes to occur to existing operations based on management plans. Key adjustments relate to known

eciency gains from increased volumes achieved in the business as well as the transactional foreign exchange impact

based on forecast rates.

Sensitivity to changes in assumptions

The post-tax discount rate for VIC has been above average in recent years (FY2020: 10.8%; FY2019: 11.2%; FY2016-2018

average: c.9.3%), thus reducing headroom. Whilst FY2022 and FY2021 discount rates have reduced to 8.9% and 8.4%

respectively, and increased headroom, if the discount rate returns to FY2019/2020 levels, or above, then it is possible

that this might lead to an impairment of VIC’s goodwill. Outside of this sensitivity and despite the macro challenges,

management believe the outlook for VIC continues to be positive.

Excluding VIC, management believe that no reasonably possible change in any key assumptions would cause the

carrying value of any other cash generating unit to exceed its recoverable amount.

168 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

14 Intangible assets – Company

Assets under

course of

construction

£000

Other

£000

Total

£000

Cost

Balance at 1 April 2020 4,088 62 4,150

Additions 1,603 — 1,603

Balance at 31 March 2021

5,691 62 5,753

Balance at 1 April 2021 5,691 62 5,753

Additions 1,481 — 1,481

Disposals (145) — (145)

Balance at 31 March 2022 7,027 62 7,08 9

Amortisation and impairment

Balance at 1 April 2020, 31 March 2021, 1 April 2021 and 31 March 2022 — 62 62

Net book value

At 1 April 2020 4,088 — 4,088

At 31 March 2021 5,691 — 5,691

At 31 March 2022 7,027 — 7,027

The addition in assets under the course of construction in the year includes Project Atlas additions of £1.1m (FY2021:

£1.2m).

15 Equity investments – Company

Investments in subsidiaries

Total

£000

Cost

Balance at 1 April 2020 43,151

Additions 422

Disposals (108)

Balance at 31 March 2021

43,465

Disposals (22)

Balance at 31 March 2022 43,443

Provision

Balance at 1 April 2020, 31 March 2021, 1 April 2021 and 31 March 2022 1,145

Net book value

Balance at 1 April 2020 42,006

Balance at 31 March 2021 42,320

Balance at 31 March 2022 42,298

Details of principal subsidiary undertakings, country of registration and principal activity are included innote 31.

All subsidiaries have a reporting date concurrent with Trifast plc, except TR Formac (Shanghai) Pte Ltd which has a

reporting date of 31 December due to local regulatory requirements.

Following the acquisition of Serco Ryan Ltd in September 2005, the trade and assets of Serco Ryan were transferred

to fellow subsidiary TR Fastenings Ltd at book value. This resulted in an apparent overvaluation of the Serco Ryan Ltd

investment as held in the Company’s books, although there was no overall loss to the Group. Schedule 1 of SI 2008/410

of the Companies Act 2006 requires that, where such overvaluation is expected to be permanent, the investment should

be written down accordingly. The Directors consider that as the substance of the transaction was merely to reorganise

the Group’s operations, such a treatment would fail to give a true and fair view. Therefore, the diminution in value of the

investment in Serco Ryan Ltd has instead been re-allocated to the Company’s investment in Trifast Overseas Holdings

Ltd, being the immediate parent company of TR Fastenings Limited and directly owned by the Company.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 169

16 Deferred tax assets and liabilities – Group

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

2022

£000

2021

£000

2022

£000

2021

£000

2022

£000

2021

£000

Property, plant and equipment

(5)

(28)

1,824

1,689

1,819

1,661

IFRS 16 Leases

(211)

(207)

—

(211)

(207)

Intangible assets

(113)

1,600

1,864

1,487

1,751

Provision on inventories

(979)

(726)

—

(979)

(726)

Provisions/accruals

(875)

(413)

804

402

(71)

(11)

IFRS 2 Share-based Payments

(748)

(596)

—

(748)

(596)

Tax losses

(1,223)

(856)

—

(1,223)

(856)

Tax (assets)/liabilities

(4,154)

(2,939)

4,228

3,955

1,016

Tax set-o

1,367

400

(1,367)

(400)

—

Net tax (assets)/liabilities (2,787)

(2,539)

2,861

3,555

1,016

A potential £3.0m (FY2021: £2.2m) deferred tax asset relating to the Company’s trapped management losses was not

recognised on the grounds that recovery of these losses is highly unlikely.

A potential £1.3m (FY2021: £1.1m) deferred tax liability relating to the temporary dierences associated with

undistributed proﬁts in subsidiaries has not been recognised. This is on the grounds that we are able to control the

timing of these reversals and it is not considered probable that these amounts will reverse in the foreseeable future.

Movement in deferred tax during the year

1 April

2021

£000

Recognised

in income

£000

Recognised

on acquisition

£000

Recognised

in equity

£000

31 March

2022

£000

Property, plant and equipment 1,661 118 14 26

1,819

IFRS 16 Leases (207) 2 — (6)

(211)

Intangible assets 1,751 (261) — (3)

1,487

Provision on inventories (726) (184) (28) (41)

(979)

Provisions/accruals (11) (36) (6) (18)

(71)

IFRS 2 Share-based Payments (596) (178) — 26

(748)

Tax losses (856) (358) — (9)

(1,223)

1,016 (897) (20) (25)

Movement in deferred tax during the prior year

1 April

2020

£000

Recognised

in income

£000

Recognised

in equity

£000

31 March

2021

£000

Property, plant and equipment 1,814 (83) (70) 1,661

IFRS 16 Leases (253) 46 — (207)

Intangible assets 2,048 (256) (41) 1,751

Provision on inventories (715) (34) 23 (726)

Provisions/accruals (135) 105 19 (11)

IFRS 2 Share-based Payments (405) (135) (56) (596)

Tax losses (489) (387) 20 (856)

1,865 (744) (105) 1,016

1. Amounts recognised in equity include the deferred tax on IFRS 2 Share-based Payments of £28k (FY2021: £(72)k) and the equity

element of foreign exchange dierences taken to reserves

170 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

17 Deferred tax assets and liabilities – Company

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

2022

£000

2021

£000

2022

£000

2021

£000

2022

£000

2021

£000

Property, plant and equipment

—

153

125

153

125

Provisions/accruals

(3)

—

(3)

IFRS 2 Share-based Payments

(426)

(329)

—

(426)

(329)

Tax losses

(448)

(514)

—

(448)

(514)

Tax (assets)/liabilities

(877)

(846)

153

125

(724)

(721)

Tax set-o

153

125

(153)

(125)

—

Net tax assets (724)

(721)

—

(724)

(721)

A potential £3.0m (FY2021: £2.2m) deferred tax asset relating to the Company’s trapped management losses was not

recognised on the grounds that recovery of these losses is highly unlikely.

Movement in deferred tax during the year

1 April

2021

£000

Recognised

in income

£000

Recognised

in equity

£000

31 March

2022

£000

Property, plant and equipment 125 28 —

153

Provisions/accruals (3) — —

(3)

IFRS 2 Share-based Payments (329) (107) 10

(426)

Tax losses (514) 66 —

(448)

(721) (13) 10

(724)

Movement in deferred tax during the prior year

1 April

2020

£000

Recognised

in income

£000

Recognised

in equity

£000

31 March

2021

£000

Property, plant and equipment 133 (8) — 125

Provisions/accruals (1) (2) — (3)

IFRS 2 Share-based Payments (309) 16 (36) (329)

Tax losses (204) (310) — (514)

(381) (304) (36) (721)

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 171

18 Inventories – Group

2022

£000

2021

£000

Raw materials and consumables

7, 276

4,364

Work in progress

3,002

2,291

Finished goods and goods for resale

78,655

48,110

88,933

54,765

In FY2022, inventories of £141.6m (FY2021: £122.6m) were recognised as an expense during the year and included in

cost of sales. Inventories have been written down by an additional £0.7m (net) in the year (FY2021: £2.2m) in line with

the Group’s stock provisioning policy. Such write-downs were recognised as an expense during FY2022. No signiﬁcant

speciﬁc stock provisions have been reversed in the year.

No inventories are speciﬁcally pledged as security for liabilities.

Within the £88.9m (FY2021: £54.8m) carrying amount of inventories above, £1.9m (FY2021: £1.1m) is carried at net

realisable value.

19 Trade and other receivables

Current

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Trade receivables

54,132

48,810

—

Non-trade receivables and prepayments

6,388

4,384

233

Amounts owed by subsidiary undertakings

—

1,806

2,142

60,520

53,194

1,888

2,375

An explanation of credit risk and details of the security held over receivables is provided in note 26.

The trade receivables position for the Group at 1 April 2020 was £48.5m.

All contracts with customers do not contain a signiﬁcant ﬁnancing component. Expected credit losses for the Group

were calculated by ﬁrst grouping trade receivables by entity and looking at historic credit loss rates over ﬁve years.

This was then overlaid with considerations for overdue debt, forward-looking information (including Covid-19 and the

Russia Ukraine conﬂict) and any customer-speciﬁc risks.

Expected credit losses for the Company were assessed at year end and there had not been a signiﬁcant increase in

credit risk, therefore they are provided at 12-month ECL. No material provision was required in FY2021 or FY2022.

Non-current

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Amounts owed by subsidiary undertakings

—

66,344

44,318

172 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

20 Other interest-bearing loans and borrowings

This note provides information about the Group and Company’s existing interest-bearing loans and borrowings as at

31March 2022.

During the year the underlying facility arrangements transitioned from LIBOR to SONIA and SOFR. All EUR loans

continue to be calculated under EURIBOR. This had no signiﬁcant impact on the cost or availability of the underlying

facilities.

For more information about the security provided by the Group and Company over loans or the Group and Company’s

exposure to interest rate, foreign currency and liquidity risk, see note 26.

Current Non-current

Initial loan value Rate Maturity

2022

£000

2021

£000

2022

£000

2021

£000

Group (excluding Company)

Right-of-use liabilities Various 2022-2050

3,009

2,707

10,660

10,018

Company

Revolving Credit Facility SONIA/SOFR/

EURIBOR

+ 1.10% to 2.20%

2024 — — 50,713 17,389

Prepaid arrangement fees

—

(206)

(419)

Right-of-use liabilities Various 2022-2024

Total Group 3,028

2,726

61,190

27,030

Total Company 19

50,530

17,012

1. Subject to leverage ratchet mechanism from <1.0x to >2.5x, current interest margin of 1.35% (based on 1.27x leverage)

21 Trade and other payables

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Trade payables

26,619

21,891

—

Amounts payable to subsidiary undertakings

—

270

4,558

Non-trade payables and accrued expenses

16,473

16,767

1,079

681

Other taxes and social security

2,157

2,475

220

267

45,249

41,133

1,569

5,506

The amounts payable to subsidiary undertakings are repayable on demand and no interest is charged.

Non-trade payables and accrued expenses includes £1.1m (FY2021: £1.2m) of contract liabilities. For consistency,

theprior year contract liabilities disclosure has been restated to include the balance at 31 March 2021. The balance at

31March 2021 was fully recognised as revenue in the year ending 31 March 2022. The balance at 31 March 2022 relates

to invoices raised in the year which will be recognised as revenue in the next ﬁnancial year.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 173

22 Employee beneﬁts

Pension plans

Deﬁned contribution plans

The Group operates a number of deﬁned contribution pension plans, which include stakeholder pension plans whose

assets are held separately from those of the Group, in independently administered funds.

The total expense relating to these plans in the current year was £2.1m (FY2021: £1.9m) and represents contributions

payable by the Group to the funds.

At the end of the ﬁnancial year, there were outstanding pension contributions of <£0.1m (FY2021: <£0.1m), which are

included in creditors.

Share-based payments

The Group share options (including SAYE plans) provide for an exercise price equal to the average quoted market

price of the Group shares on the date of grant. In the case of SAYE, this price is discounted in line with HMRC limits.

Thevesting period is generally three or ﬁve years. The options expire if they remain unexercised after the exercise

period has lapsed. Furthermore, options are forfeited if the employee leaves the Group before the options vest,

unlessfor retirement, redundancy or health reasons. The options are equity settled.

The number and weighted average exercise prices of share options are as follows:

2022 2021

Options

Weighted

average

exercise

price Options

Weighted

average

exercise

price

Outstanding at beginning of year

2,564,293 0.94

949,653 1.65

Granted during the year

426,951 1.05

2,316,659 0.86

Forfeited/lapsed during the year

(316,959) 1.14

(580,602) 1.72

Exercised during the year

(51,422) 1.04

(121,417) 1.05

Outstanding at the end of the year 2,622,863 0.93

2,564,293 0.94

Exercisable at the end of the year

2,424 1.93

29,076 1.58

The options outstanding at 31 March 2022 had a weighted average remaining contractual life of 2.3 years (FY2021:

3.0years) and exercise prices ranging from £0.86 to £1.93 (FY2021: £0.86 to £1.93).

The weighted average share price at the date of exercise for share options exercised in 2022 was £1.46 (FY2021: £1.41).

The fair value of services received in return for share options granted is measured by reference to the fair value of share

options granted. The estimate of the fair value of the services received is measured based on the Black–Scholes model.

The contractual life of the option is used as an input into this model.

174 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

22 Employee beneﬁts continued

Board deferred equity bonus shares

The Board deferred equity bonus shares have been discussed in more detail in the remuneration report (pages 109 to

129). The number of deferred equity bonus shares are as follows:

Deferred

equity bonus

Outstanding at beginning of year

669,910

Shares exercised

(35,219)

Outstanding at the end of the year 634,691

Exercisable at the end of the year

634,691

The above includes 36,703 shares for C Foo relating to his employment as TR Asia MD. He did not sit on the Board.

Italso includes 95,219 shares for G Roberts relating to when she was a Board Director. She stepped down from the

Board on 31 March 2020.

These nil cost options are subject to a three-year service period and the fair value has been calculated using the

discounted dividend model (DDM). This is based on expected dividends over the three-year term. They are equity

settled shares.

The weighted average share price at the date of exercise for share options exercised in FY2022 was £1.40

(FY2021:£1.40).

The options outstanding at 31 March 2022 had a weighted average remaining contractual life of nil years

(FY2021:nilyears).

Senior manager (SM) and OEB LTIP shares

The number of SM LTIP shares is as follows:

SM LTIP

Outstanding at beginning of year

2,916,761

Granted during the year

1,520,827

Lapsed during the year

(89,707)

Exercised during the year

(55,118)

Outstanding at end of year 4,292,763

The shares granted between 30 December 2016 and 14 November 2018, which vested on 30 December 2019,

were subject to a base award and a multiplier award. The base award required a service period of three years from

date of grant and was also subject to personal performance conditions being met during the performance period.

Themultiplier award was determined by a non-market performance condition which was achieved at 31 March 2019,

meaning the maximum multiplier was applied to the shares that vested. The method of settlement for these shares is

amixture of equity and cash settled. The fair value has been calculated using the DDM. Thiswas at grant date for the

equity settled awards. The fair value for the cash settled awards were remeasured to the date the awards vested. The

weighted average share price at the date of exercise for share options exercised in FY2022 was £1.39p (FY2021: £1.19).

The awards granted in FY2020-22 are subject to a non-market performance condition of underlying EPS growth for a

three-year period starting on 1 April 2019/20/21 and a service condition of three years from the grant date. The method

of settlement for these shares is a mixture of equity and cash settled. The fair value has been calculated using the DDM.

This was at grant date for the equity settled awards. The fair values for the cash settled awards are remeasured at the

reporting date.

The FY2020 non-market performance condition requires underlying EPS to grow by 5% per annum for a 25% payout,

15% per annum for a 100% payout, with straight-line vesting for growth in between 5% and 15% per annum. If growth

isless than 5% per annum the payout is nil.

The FY2021 non-market performance condition requires underlying EPS to be 10.55p for a 25% payout, 13.28p for

a100% payout, with straight-line vesting for growth in between. If growth is less than 10.55p the payout is nil.

The FY2022 non-market performance condition requires underlying EPS to grow by 16% per annum for a 25% payout,

25% per annum for a 72% payout (strong), with straight-line vesting in between. Maximum payout requires 37% growth

per annum, with straight-line vesting in between maximum and strong.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 175

Board LTIP shares

The Board LTIP shares are part of the remuneration policy approved at the 2020 AGM and have been discussed in more

detail in the remuneration report (pages 109 to 129). The maximum number of Board LTIP shares are as follows:

Board

LTIP shares

Outstanding at beginning of year

1,715,579

Granted during the year

690,140

Lapsed during the year

(493,333)

Outstanding at end of year 1,912,386

The above includes 155,048 shares for G Roberts relating to when she was a Board Director. She stepped down from

the Board on 31 March 2020.

These nil cost options are subject to performance (EPS growth and TSR performance) and service conditions over a

three-year period. The fair value for the EPS element has been calculated using the DDM whilst the fair value for the

TSR element has been calculated using the Monte-Carlo simulation. They are equity settled shares. In line with IFRS2

the amount recognised as an expense has been adjusted to reﬂect the number of awards for which the service and

non-market performance conditions are expected to be met.

The options outstanding at 31 March 2022 had a weighted average remaining contractual life of 1.5 years (FY2021:

1.5years).

Date of

grant

Type of

instrument

Valuation

model

Number

outstanding

31 March

2022

price on

date of

grant

(£)

Exercise

price

(£)

Expected

volatility

Vesting

period

(yrs)

Expected

life

(yrs)

Risk-

free

rate

Expected

annual

dividend

Fair

value

(£)

01/10/2017 SAYE 5

Year

Black–

Scholes

27,957

2.24 1.77 31.18 5.00 5.00 0.82 1.56 0.72

01/10/2018 SAYE 3

Year

Black–

Scholes

2,424

1.92 1.93 24.59 3.00 3.00 0.84 2.01 0.28

01/10/2018 SAYE 5

Year

Black-

Scholes

21,290

1.92 1.93 30.01 5.00 5.00 1.03 2.01 0.42

01/10/2019 SAYE 3

Year

Black-

Scholes

62,169

1.60 1.78 27.58 3.00 3.00 0.45 2.66 0.19

01/10/2019

SAYE 3

Year

Black-

Scholes

25,714

1.60 1.78 28.46 5.00 5.00 0.43 2.66 0.24

15/09/2020 SAYE 3

Year

Black-

Scholes

1,392,560

0.98 0.86 36.62 3.00 3.00 -0.10 1.22 0.27

15/09/2020 SAYE 5

Year

Black-

Scholes

703,131

0.98 0.86 33.12 5.00 5.00 -0.06 1.22 0.29

10/08/2021 SAYE 3

Year

Black-

Scholes

314,372

1.44 1.05 40.39 3.23 3.23 0.21 1.11 0.54

10/08/2021 SAYE 5

Year

Black–

Scholes

73,246

1.44 1.05 34.99 5.23 5.23 0.34 1.11 0.55

Total SAYE share options 2,622,863

176 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

22 Employee beneﬁts continued

Board LTIP shares continued

Date of

grant

Type of

instrument

Valuation

model

Number

outstanding

31 March

2022

price on

date of

grant

(£)

Exercise

price

(£)

Expected

volatility

Vesting

period

(yrs)

Expected

life

(yrs)

Risk-

free

rate

Expected

annual

dividend

Fair

value

(£)

30/09/2015 Board

deferred

equity

DDM

192,233

1.16 n/a n/a 2.56 2.56 n/a 1.81 1.11

15/07/2016 Board

deferred

equity

DDM

191,512

1.35 n/a n/a 2.71 2.71 n/a 2.07 1.28

26/07/2017 Board

deferred

equity

DDM

250,946

2.17 n/a n/a 2.68 2.68 n/a 1.61 2.08

30/12/2016 SM LTIP –

equity

DDM

351,142

2.05 n/a n/a 3.00 3.00 n/a 1.46 1.96

23/07/2019 Board LTIP

– EPS

DDM

384,915

2.07 n/a n/a 3.00 3.00 0.42 2.05 1.95

23/07/2019 Board LTIP

– TSR

Monte-

Carlo

simulation

164,964

2.07 n/a 25.96 3.00 3.00 0.42 2.05 1.15

23/07/2019 SM LTIP –

equity

DDM

694,792

2.07 n/a n/a 3.00 3.00 n/a 2.05 1.95

23/07/2019 SM LTIP –

cash

DDM

40,500

2.07

n/a n/a 3.00 1.31 n/a 0.00 1.50

08/06/2020 SM LTIP –

equity

DDM

35,000

1.30 n/a n/a 3.00 3.00 n/a 3.28 1.17

25/11/2020 Board LTIP

– EPS

DDM

470,657

1.43 n/a n/a 3.00 3.00 -0.03 0.00 1.43

25/11/2020 Board LTIP

– TSR

Monte-

Carlo

simulation

201,710

1.43 n/a 41.8 3.00 3.00 -0.03 0.00 0.69

25/11/2020 SM LTIP –

equity

DDM

672,500

1.43 n/a n/a 3.00 3.00 n/a 0.00 1.43

25/11/2020 SM LTIP –

cash

DDM

61,000

1.43

n/a n/a 3.00 2.65 n/a n/a 1.50

25/11/2020 OEB LTIP DDM

938,002

1.43 n/a n/a 3.00 3.00 n/a 0.00 1.43

03/08/2021 Board LTIP

– EPS

DDM

483,098

1.45 n/a n/a 3.00 3.00 0.11 1.11 1.40

03/08/2021 Board LTIP

– TSR

Monte-

Carlo

simulation

207,042

1.45 n/a 41.2 3.00 3.00 0.11 1.11 0.68

03/08/2021 OEB LTIP DDM

675,327

1.45 n/a n/a 3.00 3.00 n/a 1.11 1.40

03/08/2021 SM LTIP –

equity

DDM

763,500

1.45 n/a n/a 3.00 3.00 n/a 1.11 1.40

03/08/2021 SM LTIP –

cash

DDM

61,000

1.45

n/a n/a 3.00 2.34 n/a 2.00 1.10

Total share options (inc SAYE) 9,462,703

1. The share price used to determine the fair value at FY2022 was 115p (FY2021: 150p)

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 177

Expected volatility was determined by calculating the historic volatility of the Group’s share price over one,

twoand three years back from the date of grant. The expected life used in the model has been adjusted, based on

management’s best estimate, for the eects of non-transferability, exercise restrictions and behavioural considerations.

The exercise price used is in line with the appropriate award documentation. In the case of SAYE awards, this price is

discounted in line with HMRC limits. For Board, OEB and Senior Manager LTIP awards granted in the form of nil-cost

options, the exercise price is nil.

The risk-free rate has been set as the continuously compounded yield as at the grant date on zero coupon government

bonds of a term commensurate with the expected life assumption.

The dividend yield has been set equal to the historic dividend yield as at the date of grant.

The Group recognised total charges of £0.8m (FY2021: £1.1m) in relation to share-based payment transactions in the

year. Of this, £(4)k (FY2021: £39k) relates to cash settled awards to which a liability is recognised on the statement of

ﬁnancial position in trade and other payables. The remaining amount relates to equity settled awards.

As at 31 March 2022, outstanding options to subscribe for ordinary shares of 5p were as follows:

Grant date/employees entitled

Number of

instruments

Contractual life

of options

01/10/17 SAYE 27,957 Oct 2022

01/10/18 SAYE 23,714 Oct 2021, Oct 2023

01/10/19 SAYE 87,883 Oct 2022, Oct 2024

15/09/20 SAYE 2,095,691 Oct 2023, Oct 2025

10/08/21 SAYE 387,618 Oct 2024, Oct 2026

Total outstanding options 2,622,863

Board deferred equity bonus shares 634,691 Sep 2018, Jul 2019, 2020

Senior manager and OEB LTIP shares 4,292,763 Dec 2019, Jul 2022, Nov 2023, Aug 2024

Board LTIP shares 1,912,386 Jul 2022, Nov 2023, Aug 2024

Total 9,462,703

All options require continued employment from grant date to the later of vesting date or exercise date.

23 Provisions

Group

Dilapidations

£000

Total

£000

Balance at 31 March 2021 1,023 1,023

Recognised on acquisition 23 23

Increase in the year 42 42

Balance at 31 March 2022 1,088 1,088

Dilapidations relate to a portfolio of properties and external advisers were used to provide estimates of potential costs

and likelihood of sub-letting. The future cash ﬂows were then discounted using risk-free rates over thelength of the

leases. These will be utilised on vacation.

All amounts represent a best estimate of the expected cash outﬂows, although actual amounts paid could be lower orhigher.

Group

2022

£000

2021

£000

Non-current (greater than 1 year)

1,088

1,023

Current (less than 1 year)

—

Balance at 31 March 1,088 1,023

1. Provisions greater than 1 year relate to dilapidations for leases with end dates between 2023 and 2030

In respect of the Company there are £nil provisions (FY2021: £nil).

178 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

24 Capital and reserves

Capital and reserves – Group and Company

See statements of changes in equity on pages 144 and 145.

Share capital

Number of ordinary shares

2022 2021

In issue at 1 April

136,032,461

122,632,912

Shares issued

51,422

13,399,549

In issue at 31 March – fully paid 136,083,883

136,032,461

The total number of shares issued during the year was 51,422 for a consideration of £0.1m (FY2021: 13,399,549 shares

for£16.1m). The majority of the shares issued in FY2021 (13,278,132) related to the equity raise in June 2020. In FY2022

and FY2021, all shares were issued for cash.

2022

£000

2021

£000

Allotted, called up and fully paid

Ordinary shares of 5p each

6,804

6,802

The holders of ordinary shares (excluding own shares held) are entitled to receive dividends as declared from time to

time and are entitled to one vote per share at meetings of the Company.

Reserves

Share premium represents the amount subscribed for share capital in excess of nominal value.

The merger reserve has arisen under Section 612 of the Companies Act 2006 and is a non-distributable reserve.

InJune2020 the Company successfully completed placings of shares which increased the merger reserve by £14.8m.

During the year the Group purchased 1,955,720 shares (FY2021: 44,280) on the open market via the Trifast EBT for an

average price of £1.55per share, total £3.0m (FY2021: £0.1m). 90,337 shares (FY2021: 743,384) were transferred out

of the own shares held reserve at a weighted average cost of £1.59, total cost £0.1m (FY2021: weighted average cost of

£1.88, total cost £1.4m) to fulﬁl all of the exercise of awards in the year, excluding SAYE. The number of ordinary shares

held at 31 March 2022 was 2,194,470 (FY2021: 329,087). These shares are in the own shares held reserve and are to help

meet future employee share plan obligations.

The translation reserve comprises all foreign exchange dierences arising from the translation of foreign operations,

aswell as from the translation of liabilities that hedge the Group’s net investment in foreign subsidiaries.

Dividends

During the year the following dividends were recognised and paid by the Group:

2022

£000

2021

£000

Final paid 2021 – 1.60p (FY2020: nil) per qualifying ordinary share

2,156

—

Interim paid 2021 – nil (FY2020: 1.20p) per qualifying ordinary share

—

1,457

2,156

1,457

After the balance sheet date and subject to shareholder approval at the Annual General Meeting which is to be held

on 7 September 2022 a ﬁnal dividend of 1.40p per qualifying ordinary share (FY2021: 1.60p) was proposed by the

Directors. An interim dividend of 0.70p per qualifying ordinary share (FY2021: nil) was paid in April 2022. See the

ﬁnancial review for further details.

2022

£000

2021

£000

Final proposed 2022 – 1.40p (FY2021: 1.60p) per qualifying ordinary share

1,874

2,156

Interim paid 2022 – 0.70p (FY2021: nil) per qualifying ordinary share

937

—

2,811

2,156

1. FY2022 amount calculated using the number of ordinary shares in issue less the number of shares in the own shares held reserve at

31 March 2022

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 179

25 Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 March 2022 was based on the proﬁt attributable to ordinary

shareholders of £9.0m (FY2021: proﬁt of £5.8m) and a weighted average number of ordinary shares outstanding during

the year ended 31March 2022 (net of own shares held) of 135,880,620 (FY2021: 133,821,189), calculated as follows:

Weighted average number of ordinary shares

2022 2021

Issued ordinary shares at 1 April

136,032,461

122,632,912

Net eect of shares (held)/issued

(151,841)

11,188,277

Weighted average number of ordinary shares at 31 March 135,880,620

133,821,189

Diluted earnings per share

The calculation of diluted earnings per share at 31 March 2022 was based on proﬁt attributable to ordinary

shareholders of £9.0m (FY2021: proﬁt of £5.8m) and a weighted average number of ordinary shares outstanding during

theyear ended 31 March 2022 (net of own shares held) of 136,864,935 (FY2021: 134,257,324), calculated as follows:

Weighted average number of ordinary shares (diluted)

2022 2021

Weighted average number of ordinary shares at 31 March

135,880,620

133,821,189

Eect of share options on issue

984,315

436,135

Weighted average number of ordinary shares (diluted) at 31 March 136,864,935

134,257,324

The average market value of the Company’s shares for the purposes of calculating the dilutive eect of share options

was based on quoted market prices for the period that the options and deferred equity awards were outstanding.

Underlying earnings per share

2022 EPS 2021 EPS

EPS (total)

Earnings

£000 Basic Diluted

Earnings

£000 Basic Diluted

Proﬁt after tax for the ﬁnancial year

8,977 6.61p 6.56p

5,790 4.33p 4.31p

Separately disclosed items:

Acquired intangible amortisation

1,593 1.17p 1.16p

1,428 1.07p 1.06p

Project Atlas

1,041 0.77p 0.76p

1,082 0.81p 0.81p

Acquisition costs

508 0.37p 0.37p

— — —

Restructuring costs

— — —

377 0.28p 0.28p

Loss on disposal of TR Formac

(Malaysia) SDN Bhd — — — 280 0.21p 0.21p

Equity raise costs

— — —

59 0.04p 0.04p

Tax charge on adjusted items above

(607) (0.45)p (0.44)p

(641) (0.48)p (0.47)p

Tax adjusted items

(386) (0.28)p (0.28)p

— — —

Underlying proﬁt after tax 11,126 8.19p 8.13p

8,375 6.26p 6.24p

The ‘underlying diluted’ earnings per share is detailed in the above tables. In the Directors’ opinion, this reﬂects the

underlying trading performance of the Group and assists in the comparison with the results of earlier years (see note 2).

180 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

26 Financial instruments

(a) Fair values of ﬁnancial instruments

There is no signiﬁcant dierence between the fair values and the carrying values shown in the balance sheet.

(b) Financial instruments risks

Exposure to credit, liquidity, interest rate and currency risks arise in the normal course of the Group’s business,

andtheGroup continues to monitor and reduce any exposure accordingly. Information has been disclosed relating

tothe individual Company only where a material risk exists.

(i) Credit risk

Credit risk is the risk of ﬁnancial loss to the Group if a customer or counterparty to a ﬁnancial instrument fails to meet

its contractual obligations. The maximum exposure with respect to credit risk is represented by the carrying amount

on the balance sheet. Cash and cash equivalents are with approved counterparty banks and other ﬁnancial institutions.

Counterparty banks are assessed prior to opening bank accounts and on an ongoing basis to ensure exposure to credit

risk is at an acceptable level.

Management considers credit risks arises principally from the Group’s receivables from customers. A credit policy is in

place and the exposure to credit risk is monitored on an ongoing basis.

Credit evaluations are performed on all customers requiring credit over a predetermined amount. All overdue debts

are monitored regularly and customers are put on credit hold if payments are not received on time as appropriate.

Thecarrying amount of trade receivables represents the maximum credit exposure for the Group. These procedures

were further enhanced as a result of macro level uncertainties. The maximum exposure to credit risk at the balance

sheet date was £54.1m (FY2021: £48.8m), being the total carrying amount of trade receivables net of an allowance.

Management does not consider there to be any signiﬁcant unimpaired credit risk in the year-end balance sheet

(FY2021: £nil), and to date have not seen a signiﬁcant increase in risk as a result of macro level uncertainties.

There have been no signiﬁcant changes to estimation techniques or signiﬁcant assumptions made during the

reportingperiod.

At the balance sheet date there were no signiﬁcant geographic or sector-speciﬁc concentrations of credit risk,

althoughwe continue to monitor the light and heavy vehicle sectors closely due to the ongoing challenges in these

speciﬁc end markets.

Impairment losses

The movement in the allowance for impairment in respect of trade receivables and contract assets during the year was

as follows:

2022

£000

2021

£000

Balance at 1 April

(1,048)

(1,149)

Impairment (loss)/reversal movement

(257)

101

Balance at 31 March (1,305)

(1,048)

There are no signiﬁcant losses/bad debts provided for speciﬁc customers. The allowance account for trade

receivablesis used to record impairment losses where a credit risk has been identiﬁed, unless the Group is satisﬁed

thatno recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written

oagainst the trade receivables directly.

(ii) Liquidity and interest risk

Liquidity risk is the risk that the Group will not be able to meet its ﬁnancial obligations as they fall due.

The Group holds debt and hence its main interest and liquidity risks are associated with the maturity of its facilities

against cash inﬂows from around the Group. The Group’s objective is to maintain a balance of continuity of funding

andﬂexibility through the use of banking facilities as applicable.

At 31 March 2022, the Group’s banking facilities with a group of three lenders comprised a revolving multi-currency

credit facility (RCF) of up to £80.0m (FY2021: up to £80.0m).

This Revolving Credit Facility of up to £80.0m originally matured in April 2023. The facility includes an accordion of up

to £40.0m and the option to extend maturity up to April 2024. The option to extend the facility was agreed at the end

of calendar year 2021. The facility is guaranteed by 16 Group companies which exceed thresholds in various ﬁnancial

metrics as speciﬁed by lenders. Interest on this facility is charged at the aggregate rate of SONIA/SOFR/EURIBOR

plus a margin of 1.1% to 2.2%, in accordance with a formula incorporating the ratio of consolidated net debt against

theconsolidated underlying EBITDA of the Group.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 181

Covenant headroom – at 31 March 2022

The RCF in place as at 31 March 2022 is subject to quarterly covenant testing as follows:

Interest cover: Underlying EBITDA

to net interest

to exceed a ratio of four.

Adjusted leverage: Total net debt

to underlying EBITDA

not to exceed a ratio of three.

These covenants currently provide signiﬁcant headroom and forecasts indicate no breach is anticipated. See ﬁnancial

review for further details.

1. As deﬁned in the facility agreement

Liquidity tables

The following are the contractual maturities of the existing ﬁnancial liabilities, excluding trade and other payables as

the contractual cash ﬂows are equal to carrying amount and cash ﬂows are within one year:

2022

Carrying

amount

£000

Contractual

cash ﬂows

£000

Less than

1 year

£000

1 to 2

years

£000

2 to 5

years

£000

Over 5

years

£000

Non-derivative ﬁnancial liabilities

Group and Company

Revolving Credit Facility (see note 20)

50,507 50,713 — — 50,713 —

Right-of-use liabilities (see note 12)

13,711 15,110 3,228 2,626 4,900 4,356

Total Group and Company 64,218 65,823 3,228 2,626 55,613 4,356

1. In addition to the above, there are interest charges of £0.5m in FY2022 relating to the Revolving Credit Facility. Future interest

charges are based on a leverage ratchet mechanism, see note 20

2021

Carrying

amount

£000

Contractual

cash ﬂows

£000

Less than

1 year

£000

1 to 2

years

£000

2 to 5

years

£000

Over 5

years

£000

Non-derivative ﬁnancial liabilities

Group and Company

Revolving Credit Facility (see note 20) 16,970 17,389 — — 17,389 —

Right-of-use liabilities (see note 12) 12,786 14,408 3,023 2,427 4,542 4,416

Total Group and Company

29,756 31,797 3,023 2,427 21,931 4,416

1. In addition to the above, there are interest charges of £0.2m in FY2021 relating to the Revolving Credit Facility

The prior year liquidity table above has been restated to include the maturity analysis for the undiscounted value of

lease liabilities and carrying amount of revolving credit facility.

182 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

26 Financial instruments continued

(b) Financial instruments risks continued

(ii) Liquidity and interest risk continued

Liquidity headroom

Trading forecasts show that the facilities in place at 31 March 2022 provided sucient liquidity headroom. The Group

continues to maintain positive relationships with a number of banks and the Directors believe that appropriate facilities

will continue to be made available to the Group as and when they are required.

Facilities that were available at 31 March 2022 (excluding bank overdrafts and lease liabilities):

2022 2021

Available

facilities

£000

Utilised

facilities

£000

Unutilised

facilities

£000

Available

facilities

£000

Utilised

facilities

£000

Unutilised

facilities

£000

Group and Company

Revolving Credit Facility

80,000 50,713 29,287

80,000 17,389 62,611

Total Group and Company 80,000 50,713 29,287

80,000 17,389 62,611

In addition there is an accordion facility of £40m as part of the RCF agreement, which provides potential additional

ﬁnance under current agreed terms subject to credit approval.

Interest risk

The Group monitors closely all loans outstanding which currently incur interest at ﬂoating rates. When appropriate,

theGroup makes use of derivative ﬁnancial instruments, including interest rate swaps and caps. The Group will

continue to review this position going forward.

In respect of income-earning ﬁnancial assets and interest-bearing ﬁnancial liabilities, the following table indicates the

split between ﬁxed and variable interest rates at the balance sheet date.

Further details of the rates applicable on interest-bearing loans and borrowings are given in note 20.

All assets and liabilities in place at year end bear interest at a ﬂoating rate and therefore may change within one year.

Interest rate table

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Variable rate instruments

Financial assets

26,741

30,265

604

2,256

Financial liabilities

(50,507)

(16,970)

(50,507)

(16,970)

Net (debt)/cash (23,766)

13,295

(49,903)

(14,714)

1. Net of prepaid arrangement fee of £0.2m (FY2021: £0.4m)

Sensitivity analysis

A change of one percentage point in interest rates (using the net amount in the table above) at the balance sheet date

would change equity and proﬁt and loss by £0.2m (FY2021: £0.2m). This calculation has been applied to risk exposures

existing at the balance sheet date.

This analysis assumes that all other variables, in particular foreign currency rates, remain consistent and considers

the eect of ﬁnancial instruments with variable interest rates. The analysis is performed on the same basis for the

comparative period.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 183

(iii) Foreign currency risk

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than

local functional currency. The Group faces additional currency risks arising from monetary ﬁnancial instruments held

innon-functional local currencies.

Operational foreign exchange exposure

Where possible, the Group tries to invoice in the local currency at the respective entity. If this is not possible, then to

mitigate any exposure, the Group tries to buy from suppliers and sell to customers in the same currency.

Where possible, the Group tries to hold the majority of its cash and cash equivalent balances in the local currency at

therespective entity.

Monetary assets/liabilities

The Group continues to monitor exchange rates and buy or sell currencies in order to minimise open exposure to

foreign exchange risk. The Group does not speculate on exchange rates. No foreign exchange derivative ﬁnancial

instruments are held at the balance sheet date.

The Euro denominated RCF utilised facility of €29.8m (£25.2m) is net investment hedged against the net asset value

ofTR VIC, TR Kuhlmann, TR Holland and TR España. The USD denominated RCF utilised facility of $8.5m (£6.4m)

is net investment hedged against the net asset value of Falcon. Therefore, all foreign exchange movements that are

being hedged are taken to the translation reserve. The remaining Euro and US Dollar denominated RCF utilised facility

of €13.1m and $10.6m respectively (£11.0m and £8.1m respectively) is naturally hedged by equivalent intercompany

debtorassets in the Company.

The Group’s exposure to foreign currency risk is as follows (based on the carrying amount for cash and cash

equivalents held in non-functional currencies):

31 March 2022

Sterling

£000

Euro

£000

US Dollar

£000

Singapore

Dollar

£000

Total

£000

Cash and cash equivalents exposure

1,404 4,333 7,160 363 13,260

31 March 2021

Sterling

£000

Euro

£000

US Dollar

£000

Singapore

Dollar

£000

Total

£000

Cash and cash equivalents exposure 585 4,071 6,515 57 11,228

Sensitivity analysis

Group

A 1% change in signiﬁcant foreign currency balances against local functional currency at 31 March 2022 would have

changed equity and proﬁt and loss by the amount shown below. This calculation assumes that the change occurred

atthe balance sheet date and had been applied to risk exposures existing at that date.

This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain constant.

Theanalysis is performed on the same basis for the comparative period.

Equity and proﬁt or loss

Foreign currency Local currency

2022

£000

2021

£000

Euro Sterling

(8)

US Dollar Singapore Dollar

(16)

(31)

US Dollar Taiwanese Dollar

(21)

(22)

Euro Taiwanese Dollar

(5)

(19)

184 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

26 Financial instruments continued

It is the Board’s desire to maximise long-term returns. As such, the generation and disciplined deployment of free

cash is a core aspect of Trifast’s strategy. The following framework and priorities have been established and these

arerefreshed as part of our annual budgeting process.

Capital allocation priorities

The Board’s key capital allocation priorities are as follows:

• Continue to maintain adequate working capital as required to support organic growth in the short-term

• Strategic and targeted investments to drive sustainable long-term organic growth

• Realise acquisitions in line with our acquisition strategy

• A progressive dividend policy, maintaining a medium-term target dividend cover range at the top end of between

3xto 4x

Special dividends and share buy-backs, having been considered, do not currently form part of our capital allocation

framework.

Cash conversion

Outside of the signiﬁcant investment in inventory in FY2022 (see ﬁnancial review for further details), the Group has

been, and continues to expect to be, consistently cash generative. In the longer term the Board continues to target

normalised cash conversion of 70% to 80%, as we invest in the balance sheet to support our ongoing organic growth.

2019 2020 2021 2022

Net debt to underlying EBITDA 0.54x 0.80x (0.87)x

1.27x

Calculated in line with the banking agreement.

Maximum adjusted leverage covenant – 3.0x.

The Board has determined that in the current macroeconomic and shareholder environment, it is appropriate to adopt

a prudent but ﬂexible capital structure and will seek to operate in certain circumstances, e.g. non-organic investment,

with leverage of up to 2.0x adjusted net debt (before IFRS16):underlying EBITDA. The Board also seeks to maintain a

minimum leverage of 1.0x to ensure an appropriate level of balance sheet eciency.

The Group has various borrowings and available facilities (see section (b) (ii) Liquidity and interest risk) that contain

certain external capital requirements (‘covenants’) that are considered normal for these types of arrangements.

Asdiscussed above, we remain comfortably within all such covenants.

The capital structure of the Group is provided below:

2022

£000

2021

£000

Borrowings (note 20)

64,218

29,756

Equity

139,145

131,804

Capital employed 203,363

161,560

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 185

27 Financial guarantee contracts

Company

The Company has cross guarantees on its UK banking facilities with its three UK subsidiaries. The amount outstanding

at the end of the year was £nil (FY2021: £nil).

The Company has a guarantee with HSBC, involving the UK trading subsidiaries for a Group Class Guarantee facility of

£1.1m (FY2021: £1.1m).

28 Related parties

Group and Company

Compensation of key management personnel of the Group

Full details of the compensation of key management personnel on the board are given in the Directors’ remuneration

report on pages 123 to 126. Compensation for key management personnel outside the board, which comprises of the

OEB, totalled £1,543k (FY2021: £1,273k).

Transactions with Directors and Directors’ close family relatives

During the period, a relative of the Chair became employed by TR Fastenings Ltd following an external recruitment

process. The relative is paid on an arm’s length basis, with aggregate payroll costs totalling £22k (FY2021: £nil).

There were no other related party transactions with Directors, or Directors’ close family members, in the year

(FY2021:£nil).

Related party transactions

Details of principal subsidiary undertakings, country of registration and principal activities are included in note 31.

Company related party transactions with subsidiaries – income/expenditure FY2022

Rent

income

£000

Income

management

fees

£000

Loan

interest

receivable

£000

Total

income

£000

Expenditure

management

fees

£000

Loan

interest

payable

£000

Total

expense

£000

TR Fastenings Ltd

290 277 — 567 1,168 35 1,203

Lancaster Fastener Co Ltd

— 13 — 13 — — —

Precision Technology

Supplies Ltd — 41 — 41 — — —

TR Southern Fasteners Ltd

— 13 2 15 — — —

TR Norge AS

— 17 — 17 — — —

TR Fastenings AB

— 73 — 73 — — —

TR Miller BV

— 65 6 71 — — —

TR Hungary Kft

— 76 — 76 — — —

TR VIC SPA

— 139 8 147 — 2 2

TR Kuhlmann GmbH

— 62 — 62 — — —

TR Fastenings España

— 43 54 97 — — —

TR Fastenings Inc

— 120 86 206 — — —

TR Falcon Fastening Solutions

— — — — — — —

TR Asia Investments Pte Ltd

— 92 — 92 — — —

Total 290 1,031 156 1,477 1,168 37 1,205

186 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

28 Related parties continued

Related party transactions continued

Company related party transactions with subsidiaries – income/expenditure FY2021

Rent

income

£000

Income

management

fees

£000

Loan

interest

receivable

£000

Total

income

£000

Expenditure

management

fees

£000

Loan

interest

payable

£000

Total

expense

£000

TR Fastenings Ltd 290 330 — 620 197 38 235

Lancaster Fastener Co Ltd — 24 — 24 — — —

Precision Technology

Supplies Ltd — 38 — 38 — — —

TR Southern Fasteners Ltd — 21 — 21 — — —

TR Norge AS — 21 — 21 — — —

TR Fastenings AB — 101 — 101 — — —

TR Miller BV — 79 — 79 — — —

TR Hungary Kft — 81 — 81 — — —

TR VIC SPA — 132 — 132 — — —

TR Kuhlmann GmbH — 61 — 61 — — —

TR Fastenings España — 74 34 108 — — —

TR Fastenings Inc — 112 49 161 — — —

TR Asia Investments Pte Ltd — 165 — 165 — — —

Total

290 1,239 83 1,612 197 38 235

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 187

2022 2021

Balances

receivables

£000

Balances

payables

£000

Balances

receivables

£000

Balances

payables

£000

TR Fastenings Ltd

2,577 —

119 4,260

Lancaster Fastener Company Ltd

30 —

126 —

Precision Technology Supplies

24 —

136 —

TR Southern Fasteners Ltd

100 —

38 —

TR Norge AS

8 —

97 —

TR Fastenings AB 454 — 248 —

TR Miller Holding BV

1,703 —

15 —

TR Hungary Kft

455 —

55 3

TR VIC SPA

4,765 —

41 —

TR Kuhlmann GmbH

21 —

41 —

TR Fastenings España

3,781 —

3,015 —

TR Fastenings Inc

8,766 —

3,265 —

TR Falcon Fastening Solutions

26 —

— —

TR Asia Investments Holdings Pte Ltd

958 —

873 —

TR Formac Pte Ltd

34 —

238 —

Special Fasteners Engineering Co Ltd

23 —

30 —

Power Steel & Electro-Plating Works SDN Bhd

29 —

38 —

TR Fastenings Poland Sp Zoo

51 —

47 —

Non-trading dormant subsidiaries

— 267

Trifast Overseas Holdings Ltd

44,345 —

38,038 —

Trifast Holdings BV

— 3

— 28

68,150 270

46,460 4,558

All related party transactions are on an arm’s length basis.

29 Subsequent events

There are no material adjusting events subsequent to the balance sheet date.

There are no other material non-adjusting events subsequent to the balance sheet date.

188 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

30 Accounting estimates and judgements

The preparation of ﬁnancial statements in conformity with Adopted IFRS requires management to make judgements,

estimates and assumptions that aect the application of policies and reported annual amounts of assets and liabilities,

income and expenses. Actual results may dier from these estimates. The estimates and underlying assumptions are

reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is

revised if the revision aects only that period, or in the period of the revision and future periods if the revision aects

both current and future periods.

Key judgements

In preparing the ﬁnancial statements and applying the Group’s accounting policies, key judgements made by

management includes the fair value of assets acquired in a business combination and Project Atlas costs meeting the

capitalisation criteria under IAS 38 Intangible Assets.

The fair value of assets acquired in a business combination is a new key judgement due to the acquisition of Falcon.

Judgements and estimates are made in assessment of the net assets acquired, including the identiﬁcation and

valuation of intangible assets and their useful lives. The assets were valued by an external valuer using the income

methodology. The main assumptions used to establish value were proﬁtability, growth, discount and tax rates.

Another key judgement made by management relates to Project Atlas costs meeting the capitalisation criteria under

IAS 38 Intangible Assets, allowing directly attributable costs to be capitalised. The judgement includes identifying and

quantifying the costs that should be capitalised, which principally relate to the design and build of the IT infrastructure,

from the overall Project Atlas spend.

The March 2021 IFRS IC agenda decision update on ‘Conﬁguration and customisation costs in a cloud computing

arrangement’ was considered in reaching this judgement. Management concluded that the Group has control of the

software intangible asset and hence it is appropriate to capitalise these costs due to the following factors:

• The Group has a right to take possession of a copy of the software and run it on either our own or a third party’s

computer infrastructure

• The ‘on-premises’ system functionality continues to provide an appropriate level of value in use for the Group in

comparison to the cloud version

This judgement will be reviewed periodically and if either of these circumstances change (the right to obtain a copy or

the functionality diminishes) it could lead to an impairment of the intangible asset.

In the year, £1.1m (FY2021: £1.2m) (see notes 13 and 14) has been capitalised. The costs expensed in the income

statement are disclosed in note 2. Other than the above, no judgements have been made, other than those involving

estimations, that have a signiﬁcant eect on the amounts recognised in the ﬁnancial statements.

Sources of estimation uncertainty

The sources of estimation uncertainty that management have identiﬁed which may result in a material adjustment

to the carrying amount of assets and liabilities in the next ﬁnancial year are inventory valuation and recoverability

ofgoodwill.

Inventories are stated at the lower of cost and net realisable value with a provision being made for obsolete and

slow-moving items. Initially, management makes a judgement on whether an item of inventory should be classiﬁed as

standard or customer speciﬁc. This classiﬁcation then largely determines when a provision is recognised. Management

then estimates the net realisable value of the stock for each individual classiﬁcation. In most circumstances,

aprovision is made earlier for customer-speciﬁc stock (compared to standard) because it generally carries a greater

risk of becoming obsolete or slow moving given the fastenings are designed speciﬁcally for an individual customer.

Theamount of write-downs recognised as an expense in the period relating to this estimate is detailed in note 18.

The carrying amount of inventory at year end was £88.9m, of which £57.8m related to customer-speciﬁc stock

(FY2021:carrying value £54.8m, customer-speciﬁc stock £27.9m).

The key sensitivity to the carrying amount of customer-speciﬁc inventory relates to the future demand levels for

speciﬁc products stocked for individual customers. In the event that an individual customer’s demand for products

speciﬁc to them unexpectedly reduced, the Company might be required to increase the inventory provision. Although

one customer taking such action is unlikely to result in a material adjustment, multiple customers taking such action

over a short timescale could result in a material adjustment. The range of possible outcomes includes a write o of

the carrying amount at year end, to a write back of the customer-speciﬁc inventory provision at year end (£6.1m;

FY2021:£5.5m).

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 189

The carrying amount of goodwill at year end was £24.8m (FY2021: £23.1m) of which £2.9m (FY2021: £2.9m) relates to

VIC. As part of the impairment review testing, no impairment was required in the year for VIC (FY2021: £nil), but the

recoverability of the remaining goodwill is sensitive to changes in discount rate. The uncertainty in the economy could

cause an increase in discount rate which could lead to an additional impairment. For more information, please see note 13.

There are also longer-term risks involved with the recoverability of goodwill which could result in a material adjustment

to the carrying amounts of assets and liabilities. These estimates depend upon the outcome of future events and may

need to be revised as circumstances change.

31 Trifast plc subsidiaries

Country of

incorporation

or registration

Issued and

fully paid

share capital

Principal

activity

Percentage of ordinary

shares held

Oce addressGroup Company

Europe

Trifast

Overseas

Holdings Ltd

United

Kingdom

£112 Holding

Company

100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Trifast

Holdings B.V.

Netherlands €18,427 Holding

Company

100% — KVK 33268836, Vestigingsnr.

000018832806, Kelvinstratt 5, 7575

AS Oldenzaal, Netherlands

TR Fastenings

Ltd

United

Kingdom

£10,200 Manufacture

and distribution

of fastenings

100% — Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

TR Southern

Fasteners

Limited

Republic

of Ireland

€254 Distribution of

fastenings

100% — Mallow Business & Technology Park,

Mallow, Co. Cork, P51 HV12,

Republic of Ireland

TR Norge AS Norway NOK 300,000 Distribution of

fastenings

100% — Masteveien 8, NO-1481 Hagan,

Norway

TR Miller

Holding B.V.

Netherlands €45,378 Distribution of

fastenings

100% — Kelvinstraat 5, 7575 AS, Oldenzaal,

Netherlands

Lancaster

Fastener

Company Ltd

United

Kingdom

£40,000 Distribution of

fastenings

100% — Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

TR Fastenings

Sweden SEK 1,500,000 Distribution of

fastenings

100% — Box 4133, Smedjegatan 6, 7tr,

SE-131 04 Nacka, Sweden

TR Hungary Kft Hungary HUF 68,257,300 Distribution of

fastenings

100% — Szigetszentmiklós, Leshegy út 8,

2310 Hungary

TR Fastenings

Poland

Sp. Z o.o

Poland PLN 50,000 Distribution of

fastenings

100% 100% Al Jerozolimskie 56c,

00-803 Warszawa, Poland

TR VIC SPA Italy €187,200 Manufacture

and distribution

of fastenings

100% — Via Industriale, 19,

06022 Fossato Di Vico (PG), Italy

VIC Sp. Z o.o. Poland PLN 50,000 Distribution of

fastenings

100% — Wroclaw, ul Wiosenna 14/2,

Poland

TR Kuhlmann

GmbH

Germany €25,000 Distribution of

fastenings

100% — Lerchenweg 99, 33415 Verl,

Germany

Precision

Technology

Supplies Ltd

United

Kingdom

£10,000 Distribution of

fastenings

100% — Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

TR Fastenings

España –

Ingenieria

Industrial, S.L.

Spain €3,085 Distribution of

fastenings

100% — Calle De La CiIencia 43, Viladecans,

Barcelona, CP 08840, Spain

190 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

Country of

incorporation

or registration

Issued and

fully paid

share capital

Principal

activity

Percentage of ordinary

shares held

Oce addressGroup Company

Asia

TR Asia

Investment

Holdings Pte

Ltd

Singapore S$4 Holding

Company

100% — 57 Senoko Road, Singapore 758121

TR Formac

Pte Ltd

Singapore S$315,000 Manufacture

and distribution

of fastenings

100% — 57 Senoko Road, Singapore 758121

TR Formac

(Shanghai)

Pte Ltd

China US$200,000 Distribution of

fastenings

100% — Room D,1F, Building 2,No 390 Ai Du

Road, China (Shanghai) Pilot Free

Trade Zone, Shanghai

Special

Fasteners

Engineering Co

Ltd

Taiwan TW$100,000,000 Manufacture

and distribution

of fastenings

100% — 9F.-3 No. 366, Bo Ai 2nd Rd.,

Kaohsiung 81358, Taiwan, R.O.C

TR Formac

Fastenings

Private Ltd

India INR 18,850,000 Distribution

of fastenings

100% — Door No:6,

05th Cross Street, Mangala Nagar,

Porur, Chennai-600 116, India

Power Steel &

Electro-Plating

Works SDN Bhd

Malaysia MYR 4,586,523 Manufacture

and distribution

of fastenings

100% — Suite 1609, Tingkat 16, Plaza

Pengkalan, Batu 3 Jalan Sultan Azlan

Shah 51200 Kuala Lumpur, Malaysia

TR Formac

Co. Ltd

Thailand THB 60,000,000 Distribution

of fastenings

100% — 28, 3rd Floor

Motorway Road, Prawet,

Bangkok 10,250, Thailand

Americas

TR Fastenings

Inc

USA US$20,000 Distribution

of fastenings

100% — 10811 Vine Crest Drive, Suite 190,

Houston, Texas 77086, USA

TR Falcon

Fastening

Solutions

USA $1000 Distribution

of fastenings

100% — 10715 John Proce Road,

Charlotte, North Carolina,

28273, USA

Trifast Holdings

(US) Inc

USA $1 Holding

Company

100% — 251 Little Falls Drive,

Wilmington, Delaware,

19808, USA

31 Trifast plc subsidiaries continued

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 191

Country of

incorporation

or registration

Issued and

fully paid

share capital

Principal

activity

Percentage of ordinary

shares held

Oce addressGroup Company

Dormants

Trifast

Systems Ltd

United

Kingdom

£100 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Ivor Green

(Exports) Ltd

United

Kingdom

£5,000 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Charles

Stringer’s Sons

& Co. Limited

United

Kingdom

£18,000 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Fastech

(Scotland) Ltd

United

Kingdom

£100 Dormant 100% 100% International House,

Stanley Boulevard,

Hamilton Intnl Technology Park,

Blantyre, Glasgow, Scotland,

G72 0BN

Micro Screws &

Tools Ltd

United

Kingdom

£1,000 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Trifast

International

Ltd

United

Kingdom

£2 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Rollthread

International

Ltd

United

Kingdom

£10,000 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

TR Group Ltd United

Kingdom

£100 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Fastener

Techniques Ltd

United

Kingdom

£73,939 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Trifast

Qualifying

Employee Share

Ownership

Trustee Ltd

United

Kingdom

£2 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Triﬁx Ltd United

Kingdom

£100 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

Serco Ryan Ltd United

Kingdom

£3,000 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

TR Europe Ltd United

Kingdom

£2,500 Dormant 100% 100% Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex, TN22 1QW, UK

All of the above subsidiaries have been included in the Group’s ﬁnancial statements.

192 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

32 Alternative Performance Measures

The Annual Report includes both GAAP measures and Alternative Performance Measures (APMs), the latter of which

are considered by management to allow the readers of the accounts to understand the underlying trading performance

of the Group. A number of these APMs are used by management to measure the KPIs of the business (see pages 14 and

15 for key performance indicators) and are therefore aligned to the Group’s strategic aims. They are also used at Board

level to monitor ﬁnancial performance throughout the year.

The APMs used in the Annual Report (including the basis of calculation, assumptions, use and relevance) are detailed in

note 2 (underlying proﬁt before tax, EBITDA and underlying EBITDA) and below.

• Constant Exchange Rate (CER) ﬁgures

These are used predominantly in the ﬁnancial review and give the readers a better understanding of the performance

of the Group, regions and entities from a trading perspective. They have been calculated by translating the FY2022

income statement results (of subsidiaries whose presentational currency is not Sterling) using FY2021 average annual

exchange rates to provide a comparison which removes the foreign currency translational impact. The impacts of

translational gains and losses made on non-functional currency net assets held around the Group have not been

removed.

• Revenue growth vs GDP

This is a KSI for the Group as our ambitious growth strategy makes revenue growth in excess of prevailing macro

conditions an important barometer of the Group’s success. Organic revenue is calculated by removing the impact

ofany acquisitions in the current or prior year, growth is calculated at Actual Exchange Rate and then this is

comparedto GDP.

• Underlying operating margin

Underlying operating margin is used in the ﬁnancial review to give the reader an understanding of the performance of

the Group and regions. It is calculated by dividing underlying operating proﬁt (see return on capital employed section

for reconciliation to operating proﬁt) by revenue in the year.

• Underlying eective tax rate

This is used in the underlying diluted EPS calculation. It removes the tax impact of separately disclosed items in the

year to arrive at a tax rate based on the underlying proﬁt before tax.

2022 2021

Proﬁt impact

£000

Tax impact

£000

ETR

Proﬁt impact

£000

Tax impact

£000

ETR

Proﬁt before tax

10,617 (1,640) 15.5%

7,78 4 (1,994) 25.6%

Separately disclosed items

3,142 (993) 31.6%

3,226 (640) 19.8%

Underlying proﬁt before tax 13,759 (2,633) 19.1%

11,010 (2,634) 23.9%

• Underlying diluted EPS

A key measure for the Group, as it is one of the measures used to set the Directors’ variable remuneration, as disclosed

in the Directors’ remuneration report. The calculation has been disclosed in note 25.

• Underlying cash conversion as a percentage of underlying EBITDA

This is another key metric used by investors to understand how eective the Group were at converting proﬁt into

cash. The adjustments made to arrive at underlying cash conversion from cash generated from operations are detailed

below. To reconcile operating proﬁt to underlying EBITDA, see note 2.

2022

£000

2021

£000

Underlying cash conversion

(13,630)

26,021

Project Atlas

(983)

(1,082)

Restructuring costs

(19)

(358)

Acquisition costs

(508)

—

Cash generated from operations (15,140)

24,581

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 193

• Adjusted net (debt)/cash to adjusted underlying EBITDA (adjusted leverage) ratio

This removes the impact of IFRS 16 Leases from both net debt and underlying EBITDA and IFRS 2 Share-based

Payments from underlying EBITDA to better reﬂect the banking facility covenant calculations. Underlying EBITDA is

reconciled to operating proﬁt in note 2.

2022

£000

2021

£000

Net (debt)/cash

(37,477)

509

Right-of-use lease liabilities

13,711

12,786

Adjusted net (debt)/cash (23,766)

13,295

2022

£000

2021

£000

Underlying EBITDA

20,409

17,59 6

IFRS 2 Share-based Payment charge and other related costs

760

1,225

Operating lease payments

(3,560)

(3,583)

Adjusted underlying EBITDA 17,609

15,238

• Adjusted interest cover

This is adjusted EBITDA to adjusted net interest to better reﬂect the banking facility covenant calculations, removing

the impact of IFRS 16 Leases. Underlying EBITDA has IFRS 16 Leases and IFRS 2 Share-based Payments removed above

and is reconciled to operating proﬁt in note 2.

2022

£000

2021

£000

Net interest

(987)

(972)

Right-of-use liability interest

326

313

Adjusted net interest (661)

(659)

• Underlying return on capital employed (ROCE)

Return on capital employed is a key metric used by investors to understand how ecient the Group is with its capital

employed. The calculation is detailed in the Glossary on page 200. The numerator is underlying EBIT which has been

reconciled to operating proﬁt below. Note 2 explains why the separately disclosed items have been removed to aid

understanding of the underlying performance of the Group.

2022

£000

2021

£000

Underlying EBIT/underlying operating proﬁt

14,746

11,982

Separately disclosed items within administrative expenses

Acquired intangible amortisation

(1,593)

(1,428)

Project Atlas

(1,041)

(1,082)

Acquisition costs

(508)

—

Restructuring costs

—

(377)

Loss on disposal of TR Formac (Malaysia) SDN Bhd

—

(280)

Equity raise costs

—

(59)

Operating proﬁt 11,604

8,756

• Working capital as a percentage of revenue

This is calculated as current assets excluding cash, less current liabilities excluding debt like items as a percentage of

Group revenue. It is a KPI for the Group as it remains a key focus to ensure ecient allocation of capital on the balance

sheet to improve quality of earnings and reduce the additional investment needed to support organic growth.

194 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

33 Reconciliation of net cash ﬂow to movement in net (debt)/cash

2022

£000

2021

£000

Net change in cash and cash equivalents

(4,865)

3,264

Proceeds from new loan

(32,980)

—

Repayment of borrowings

—

26,656

Net (increase)/decrease in right-of-use liabilities

(751)

2,089

Net (proceeds) /repayment from borrowings

(33,731)

28,745

Increase/(decrease) in net debt before exchange rate dierences

(38,596)

32,009

Movement in prepaid arrangement fees

(213)

(240)

Exchange rate dierences

823

(990)

(Increase)/decrease in net debt

(37,986)

30,779

Opening net cash/(debt)

509

(30,270)

Closing net (debt)/cash (37,477)

509

Net debt is reconciled to the balance sheet as follows:

2022

£000

2021

£000

Cash and cash equivalents

26,741

30,265

Other interest-bearing loans and borrowings

(50,507)

(16,970)

Right-of-use liabilities

(13,711)

(12,786)

Closing net (debt)/cash (37,477)

509

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 195

34 Changes in ﬁnancial liabilities including both cash ﬂows and non-cash changes

2022

£000

2021

£000

Group

Finance liabilities at 1 April 29,756

58,997

Cash ﬂow changes

30,003

(30,314)

Foreign exchange on ﬁnancial liabilities

518

(736)

Arrangement fees unwinding

213

240

Right-of-use liabilities acquisitions

867

—

Right-of-use liabilities additions

2,861

1,637

Right-of-use liabilities disposals

—

(68)

Finance liabilities at 31 March 64,218

29,756

2022

£000

2021

£000

Company

Finance liabilities at 1 April 17,031

43,647

Cash ﬂow changes

32,961

(26,408)

Foreign exchange on ﬁnancial liabilities

344

(503)

Arrangement fees unwinding 213 240

Right-of-use liabilities additions

—

Finance liabilities at 31 March 50,549

17,031

Liabilities arising from ﬁnancing activities include other interest-bearing loans and borrowings and

right-of-useliabilities.

196 Trifast plcAnnual Report for the year ended 31 March 2022

Financial statements

Notes to the ﬁnancial statements continued

for the year ended 31 March 2022

35 Revenue from contracts with customers

In line with IFRS 15 Revenue from Contracts with Customers we have included the disaggregation of external revenue

by sector, breaking this down by our geographical operating segments.

March 2022 UK Europe

North

America Asia Total

Light vehicle

5% 11% 5% 4% 25%

Health & home

3% 12% — 6% 21%

Distributors

13% 1% — 6% 20%

Energy, tech & infrastructure

6% 5% 2% 3% 16%

General industrial

7% 5% 1% 1% 14%

Heavy vehicle

2% 2% — — 4%

Revenue from external customers (AER) 36% 36% 8% 20% 100%

March 2021 UK Europe

North

America Asia Total

Light vehicle 7% 12% 3% 5% 27%

Health & home 3% 14% — 8% 25%

Distributors 11% — — 5% 16%

Energy, tech & infrastructure 6% 5% 2% 3% 16%

General industrial 5% 6% — 1% 12%

Heavy vehicle 2% 1% — 1% 4%

Revenue from external customers (AER) 34% 38% 5% 23% 100%

36 Acquisition of Falcon Fasteners Solutions Inc (‘Falcon’)

On 31 August 2021, Trifast acquired 100% of the voting equity interests of Falcon for a consideration of $8.3m (£6.0m)

on a cash-free/debt-free basis, subject to adjustment for net cash and working capital in the business at completion.

The consideration was paid on completion and was met from the Company’s existing bank facilities.

Falcon was originally founded in 1979 as a family-owned distributor of industrial fastenings and Category ‘C’ components

and now operates from two locations in North Carolina and Kentucky. Over 90% of production components supplied by

Falcon are customer specials. The business specialises in designing customised supply chain solutions that support lean

principles in manufacturing to reduce cost and improve eciency for its clients. Falcon serves a diverse range of sectors

with minimal crossover with TR’s existing North American customer base. Trifast intends to retain all sta at both Falcon

and its existing US operation with the acquired business being re-branded as TR Falcon.

Trifast will be investing into Falcon to further develop the opportunities in the North American market and expect the

acquisition of Falcon to be earnings enhancing in the ﬁrst full year of ownership.

In the year ended 31 December 2020, Falcon reported revenue of $11.5m (£8.9m) and proﬁt before tax of $1.3m

(£1.0m). Gross assets at the same date were $5.3m (£3.9m). These ﬁgures were not audited.

The fair value of trade and other receivables is £0.7m. The gross contractual ﬂows to be collected are £0.7m. The best

estimate at acquisition date of the contractual ﬂows not to be collected is £nil.

Since the acquisition date, Falcon has contributed £4.9m to Group revenues and £0.3m to Group proﬁt before

tax.Ifthe acquisition had occurred on 1 April 2021, Group revenue would have increased by an estimated £8.1m and

Group proﬁt before tax would have increased by an estimated £0.6m. In determining these amounts, management

has assumed that the fair value adjustments that arose on the date of acquisition would have been the same as if the

acquisition had occurred on 1 April 2021.

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 197

Eect of acquisition

Provisional

values on

acquisition

£000

Property, plant and equipment 121

Right-of-use assets 890

Intangible assets 2,908

Deferred tax asset 20

Inventory 1,548

Trade and other receivables 712

Cash and cash equivalents 313

Trade and other payables (659)

Provisions (23)

Right-of-use liabilities (867)

Net identiﬁable assets and liabilities 4,963

Total consideration

6,163

Goodwill on acquisition 1,200

1. Made up of £6.0m consideration and £0.2m net working capital/cash adjustment

Intangible assets that arose on the acquisition include the following:

• £2.1m of customer-related intangibles, with an amortisation period deemed to be twelve years

• £0.5m of marketing-related intangibles, with an amortisation period deemed to be ﬁve years

• £0.3m of contract-based intangibles, with an amortisation period deemed to be four years

Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is deductible

fortaxpurposes. It mostly represents potential future customer relationships and contracts and Falcon’s

assembledworkforce.

Eect of acquisition

The Group has incurred £0.5m of costs in relation to the acquisition of Falcon in the period. These costs have

been included as separately disclosed items in administrative expenses in the Group’s consolidated statement

ofcomprehensive income.

198 Trifast plcAnnual Report for the year ended 31 March 2022

Glossary of terms

AER

Actual Exchange Rate.

Assets

Anything owned by the Company having a monetary

value; e.g. ﬁxed assets such as buildings, plant and

machinery, vehicles (these are not assets if rented and

not owned) and potentially including intangibles such as

trademarks and brand names, and current assets, such as

inventory, debtors and cash.

Average capital employed

Averaged using month-end balances and opening capital

employed. Capital employed is the sum of net assets and

gross debt.

Balance sheet (or statements of ﬁnancial position)

These provide a ‘snapshot’ at a date in time of who

owns what in the Company, and what assets and debts

represent the value of the Company.

The balance sheet is where to look for information about

short-term and long-term debts, gearing (the ratio of

debt to equity), reserves, inventory values (materials

andﬁnished goods), capital assets, cash and the value

ofshareholders’ funds. The balance sheet equation is:

Capital + Liabilities (where the money came from)

= Assets (where the money is now)

Book build

Book building is the process by which an underwriter

attempts to determine the price at which an initial public

oering (IPO) or Placing of equity will be oered.

Broker option

The broker option has been issued to facilitate the

participation by existing shareholders of the Company,

being shareholders of the Company who hold shares in

the Company.

CAGR

Compounded Annual Growth Rate.

Cash ﬂow

The movement of cash in and out of a business from

day-to-day direct trading and other non-trading eects,

such as capital expenditure, tax and dividend payments.

Category ‘C’ components

Low-value components that are wrapped up into our

supply proposition for a customer.

CER

Constant Exchange Rate.

Current assets

Cash and anything that is expected to be converted

intocash within 12 months of the balance sheet date.

Forexample, debtors or inventory.

Current liabilities

Money owed by the business that is generally due

forpayment within 12 months of balance sheet date.

Forexample: creditors, bank overdrafts or tax.

Depreciation

The proportion of cost relating to a capital item, over an

agreed period, (based on the useful life of the asset); for

example, a piece of equipment costing £10,000 having

alife of ﬁve years might be depreciated over ﬁve years

ata cost of £2,000 per year.

This would be shown in the income statement as a

depreciation cost of £2,000 per year; the balance sheet

would show an asset value of £8,000 at the end of year

one, reducing by £2,000 per year; and the cash ﬂow

statement would show all £10,000 being used to pay

foritin year one.

Dividend

A dividend is a payment made per share to a company’s

shareholders and is based on the proﬁts of the year,

but not necessarily all the proﬁts. Normally a half-year

dividend is recommended by a company board whilst the

ﬁnal dividend for the year is proposed by the board of

directors and shareholders consider and vote on this at

the Annual General Meeting.

Additional information

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 199

Dividend cover

Underlying diluted earnings per share over proposed

dividend per share in the year.

Earnings before

There are several ‘Earnings before….’ ratios. The key

onesbeing:

• PBT Proﬁt/earnings before taxes

• EBIT Earnings before interest and taxes

• EBITDA Earnings before interest, taxes, depreciation

and amortisation

• Underlying proﬁt before separately disclosed items

(see note 2)

Earnings relate to operating and non-operating proﬁts

(e.g. interest, dividends received from other investments).

GAAP

Generally Accepted Accounting Practice.

Gearing

The ratio of debt to equity, usually the relationship

between long-term borrowings and shareholders’ funds.

GDPR

The General Data Protection Regulation is a regulation

by which the European Parliament, the Council of the

European Union and the European Commission intend

tostrengthen and unify data protection for all individuals

within the European Union. It also addresses the export of

personal data outside the EU.

Goodwill

Any surplus money paid to acquire a company that

exceeds its net assets fair value.

ICAEW

Institute of Chartered Accountants in England & Wales.

Intellectual property (IP)

This is an intangible asset such as a copyright or patent.

to control an original work and is granted by law for a

speciﬁed number of years.

A patent is a government grant to an inventor, assuring

the inventor the sole right to make, use and sell an

invention for a limited period.

Legal entity identiﬁer (LEI)

An LEI is a unique identiﬁer for persons that are

legalentities or structures including companies, charities

andtrusts. The obligation for legal entities or structures

to obtain an LEI was endorsed by the G20 (the leaders

of the 20 largest economies). Further information on

LEIs, including answers to frequently asked questions,

can be found at https://www.gleif.org/en/about-lei/

questions-and-answers

MiFID

MiFID applied in the UK from 2007, and was revised by

MiFID II, in January 2018, to improve the functioning of

ﬁnancial markets in light of the ﬁnancial crisis and to

strengthen investor protection. MiFID II extended the

MiFID requirements in a number of areas – new market

structure requirements, including:

• New and extended requirements in relation to

transparency

• New rules on research and inducements

• New product governance requirements for

manufacturers and distributors of MiFID ‘products’

• Introduction of a harmonised commodity position

limits regime

For more, visit www.fca.org.uk/markets/miﬁd-ii

Non-pre-emptive rights

This term refers to an issue or sale of any equity securities

by a company to which pre-emptive rights do not apply.

200 Trifast plcAnnual Report for the year ended 31 March 2022

OEM

Original equipment manufacturers.

PDMR

This term stands for Persons Discharging Managerial

Responsibility. These relate to people who are board

directors or senior management, who have access to

price-sensitive information on a regular basis. As a result,

if they buy or sell shares at any time this must be declared

in a PDMR notice which is released by the company via

the London Stock Exchange News Service (RNS). PDMRs

may not deal in the company’s shares in a close period.

P/E ratio (price per earnings)

The P/E ratio is an important indicator as to how

the investing market views the health, performance,

prospects and investment risk of a plc. The P/E ratio is

arrived at by dividing the share price by the underlying

diluted earnings per share.

Placing

A placing (called a placement in the USA) is the issue of

new securities, which are sold directly to holders, usually

institutional investors. Unlike a rights issue, a placing of

shares is not an oer to existing shareholders; simply to

any suitable buyers who can be found. The advantage

of a placing is that it is a cheaper and simpler method

ofraising funds for the business.

PPE

PPE stands for Personal Protective Equipment and

includes items such as masks, helmets, gloves, eye

protection and high-visibility clothing and is designed

tokeep people safe.

Pre-emptive rights

Pre-emptive rights are a clause in an option, security

ormerger agreement that gives the investor the right to

maintain his or her percentage ownership of a company

by buying a proportionate number of shares of any future

issue of the security.

Proﬁt

The surplus remaining after total costs are deducted from

total revenue.

Proﬁt and loss account (P&L) (or income

statement)

The P&L shows how well the company has performed in

its trading activities and would cover a trading account

for a period.

The P&L shows proﬁt performance and typically shows

sales revenue, cost of sales/cost of goods sold, generally

a gross proﬁt margin, ﬁxed overheads and/or operating

expenses, and then a proﬁt before tax ﬁgure (PBT).

Reserves

The accumulated and retained dierence between proﬁts

and losses year-on-year since the company’s formation.

Retained proﬁt/earnings

Business proﬁt which is after tax and dividend payments

to shareholders; retained by the business and used

forreinvestment.

Return on capital employed (ROCE)

A fundamental ﬁnancial performance measure.

Apercentage ﬁgure representing earnings before interest

and tax against the money that is invested in the business.

Underlying EBIT ÷ average capital employed (net assets +

gross debt) × 100 = ROCE.

Glossary of terms continued

Additional information

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 201

Rights issue

A rights issue is the term for when a company oers more

of its ordinary shares to current shareholders, usually to

raise extra capital for the business.

Share capital

The balance sheet nominal value paid into the company

by shareholders at the time(s) shares were issued.

Shareholders’ funds

A measure of the shareholders’ total interest in

thecompany, represented by the total share capital

plusreserves.

Statements of cash ﬂow

The statements of cash ﬂows show the movement and

availability of cash through and to the business over a

given period. For any business ‘cash is king’ and essential

to meet payments, for example to suppliers, sta and

other creditors.

Stock code

A stock code is used to ﬁnd a listing on the regulatory

market such as the London Stock Exchange. Trifast’s

stock code is TRI.

Third party logistics (3PL)

3PL in logistics and supply chain management is

an organisation’s use of third-party businesses to

outsource elements of its distribution, warehousing

andfulﬁlmentservices.

Tier 1

A subcontractor to the OEM.

Trademark

The name or a symbol used by a manufacturer or dealer

to distinguish its products from those of competitors.

Aregistered trademark is one that is ocially

registeredand legally protected.

Working capital

Current assets excluding cash, less current liabilities

excluding debt like items representing the required

investment, continually circulating, to ﬁnance inventory,

debtors and work in progress.

202 Trifast plcAnnual Report for the year ended 31 March 2022

Five year history

Not restated

for IFRS 2

2019 2020 2021 20222018

Revenue £197.6m £209.0m £200.2m £188.2m

£218.6m

GP margin

30.5% 30.0% 27. 5% 26.5%

26.7%

Underlying operating proﬁt

1,2

£22.7m £21.6m £15.8m £12.0m

£14.7m

Underlying operating proﬁt margin

1,2

11.5% 10.4% 7.9% 6.4% 6.7%

Operating proﬁt

£19.0m £17.1m £4.1m £8.8m

£11.6m

Operating proﬁt margin

9.6% 8.2% 2.0% 4.7%

5.3%

Underlying EBITDA

1,2

£24.7m £23.9m £21.2m £17.6m

£20.4m

Underlying PBT

1,2

£22.2m £21.0m £14.7m £11.0m

£13.8m

PBT

£18.5m £16.4m £3.0m £7. 8 m

£10.6m

ROCE %

1,2,

20.1% 13.9% 8.8% 6.8%

8.3%

Total dividend per share 3.85p 4.25p 1.20p 1.60p

2.10p

Dividend increase % 10.0% 10.4% (71.8)% 33.3%

31.3%

Dividend cover 3.6x 3.0x 7. 2x 3.9x

3.9x

Underlying diluted EPS

1,2

13.78p 12.79p 8.64p 6.24p

8.13p

Diluted EPS

12.20p 9.90p (0.19)p 4.31p

6.56p

Adjusted net debt/(cash)

£7.4m £14.2m £15.2m £(13.3)m

£23.8m

Cash conversion % of underlying EBITDA

1,2

68.1% 71.4% 105.1% 147.9% (66.8)%

Share price at 31 March 255p 193p 95p 150p

115p

1. Before separately disclosed items, see note 2

2. Presented after adoption of IFRS 16 Leases from FY2020

3. Adjusted net debt/(cash) is excluding the impact of IFRS 16 Leases

Additional information

Strategic report Governance Financial statements Additional information

Trifast plcAnnual Report for the year ended 31 March 2022 203

Company and advisers

Company

Trifast plc

Incorporated in the United Kingdom

Registered number: 01919797

LSE Premium Listing

Ticker: TRI

LEI REFERENCE: 213800WFIVE6RWK3CR22

Head oce and registered oce

Trifast House

Bellbrook Park, Uckﬁeld

East Sussex TN22 1QW

Telephone: +44 (0)1825 747366

Committee memberships as at 1 April 2022

Audit & Risk Committee

Clive Watson (Chair)

Scott Mac Meekin

Claire Balmforth

Remuneration Committee

Claire Balmforth (Chair)

Scott Mac Meekin

Clive Watson

Nomination Committee

Jonathan Shearman (Chair)

Scott Mac Meekin

Claire Balmforth

Clive Watson

Plc Sustainability Committee

Mark Belton (Chair)

Clive Watson

Scott Mac Meekin

Claire Balmforth

Clare Foster

Company Secretary

Christopher Morgan

Email: companysecretariat@trifast.com

Advisers

Registered auditor

BDO LLP

2 City Place, Beehive Ring Road

Gatwick

West Sussex RH6 0PA

Corporate stockbroker

Peel Hunt LLP

100 Liverpool Street

London EC2M 2AT

Solicitor

Charles Russell Speechlys, LLP

Compass House, Lypiatt Road

Cheltenham GL50 2QJ

Registrar

Computershare Investor Services plc

The Pavilions, Bridgwater Road

Bristol BS13 8AE

ESG consultants

Brite Green

33 Cavendish Square

London W1G 0PW

Financial PR

TooleyStreet Communications Limited

15 Colmore Row

Birmingham B3 2BH

204 Trifast plcAnnual Report for the year ended 31 March 2022

Financial calendar

AGM 12 noon, 7 September 2022

Half-yearly results November 2022

Trading update February 2023

Financial year end 31 March 2023

Pre-close trading update April 2023

Preliminary results June 2023

1. Dates are provisional and subject to change

Details of the Company’s up-to-date ﬁnancial reporting calendar can be found on our website at www.trifast.com/

investors/ﬁnancial-information/ﬁnancial-calendar

Dividend calendar

Proposed ﬁnal dividend 1.40p

Ex-dividend date 15 September 2022

Final dividend record date 16 September 2022

Final dividend payment date 14 October 2022

Annual General Meeting (AGM)

The Annual General Meeting will be held at 12 noon on Wednesday 7 September 2022 at Trifast House, Bellbrook Park,

Uckﬁeld, East Sussex TN22 1QW.

The Notice of Meeting, which includes special business to be transacted at the AGM together with an explanation of

theresolutions to be considered at the meeting, is made available on the Company website and communicated directly

to shareholders.

Company website

We are delighted to have recently launched our new Group website at www.trifast.com and have taken the opportunity

to integrate our previous commercial and investor websites. We hope that you will ﬁnd this new platform a useful

source of information and where you can learn more about Trifast, its products and activities. This new format we

believe will also help to improve the understanding of our business objectives. The dedicated investors section

includesthe latest news feeds and new interactive tools that will allow an investor to engage and monitor the

investment and its performance.

Registrar

Trifast’s Registrar is Computershare Investor Services. They can be contacted for any matters relating to your

shareholding, including notiﬁcation of change in name and address; enquiries about dividend payments; and

submission of proxy form for voting at the Annual General Meeting.

Shareholders who receive duplicate sets of Company mailings because they have multiple accounts should contact

Computershare to have their accounts amalgamated. Computershare oers a facility whereby shareholders can access

their shareholdings in Trifast via their website.

Please have your Shareholder Reference Number to hand whenever you contact the Registrar www.computershare.com/uk

Additional information

This report is printed on Nautilus

Superwhite 100% recycled.

Printed sustainably in the UK by Pureprint,

a CarbonNeutral® company with FSC®

chain of custody and an ISO 14001 certiﬁed

environmental management system

recycling over 100% of all dry waste.

www.lyonsbennett.com

Trifast House,

Bellbrook Park,

Uckﬁeld,

East Sussex

TN22 1QW

Tel: +44 (0)1825 747366

Fax: +44 (0)1825 747368

www.trifast.com

Trifast plcAnnual Report for the year ended 31 March 2022