quickening the pace - tarsus group · the “quickening the pace” strategy targets countries that...

Quickening the pace

Annual Report and Accounts 2014Tarsus Group plcYear ended 31 December 2014

R+A_15_FC_A4_v1_CMYK_Layout 1 31/03/2015 15:13 Page 4

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CONTENTSBUSINESS REVIEW

4 Who we are

6 Strategy

9 Highlights

10 Chairman and Managing Director’s statement

14 Financial Review

BUSINESS REVIEW – GEOGRAPHICAL AREAS

16 Emerging Markets

28 US

32 Europe

GOVERNANCE

36 Corporate Social Responsibility

38 Board of Directors

39 Director’s Report

44 Corporate Governance Report

48 Nomination Committee Report

49 Audit Committee Report

54 Remuneration Committee Report

72 Director’s Responsibility Statement

FINANCIAL STATEMENTS

73 Independent Auditors’ Report

79 Consolidated income statement

80 Consolidated statement of comprehensive income

81 Consolidatedstatementoffinancialposition

82 Consolidatedstatementofcashflows

83 Consolidated statement of changes in equity

85 Notestotheconsolidatedfinancialstatements

121 Tarsus Group plc - company income statement

122TarsusGroupplc-companystatementoffinancialposition

123 TarsusGroupplc-companystatementofcashflows

124 Tarsus Group plc - company statement of changes in equity

125NotestothefinancialstatementsofTarsusGroupplc

OTHER INFORMATION

129 Shareholder information

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Business Review

who we are

WHAT WE DOTarsus owns and manages a portfolio of leading trade exhibitions in a range of sectors in the Emerging Markets, the USA and Europe. These exhibitions represent a vital B2B sales channel that facilitates the development and monetisation of relationships between buyers and sellers in their respective markets. Tarsus also reinforces its trade shows through online interaction and education and by the provision of market-leading publications and thought leadership conferences.

One key to Tarsus’ success is its ownership of leading brands backed by high quality local delivery and expertise. A “must attend” event – like Labelexpo Europe for example – is a valuable asset and presents significantbarrierstoentrytocompetitors.

Since its inception over sixteen years ago, Tarsus has developed its portfolio by both geography and industry through a combination of organic growth supplemented by strategic acquisitions. Our businesses are managed strongly at a local level with a focus on growing attendees and the Group is increasingly taking its brands into new territories to deliver organic growth. Acquisitions have been identifiedinfastergrowingmarketsorindustriesundergoing fundamental change – collectively “markets in transition” – adding to the Group’s growth dynamic.

THE MARKETPLACEThe global exhibition industry is valued at some $27bn and is forecast by industry commentators to grow at approximately 5% annually between now and 2018. While developed markets still account for the largest share of this - with North America alone

“The quality of our assets, the geographical positioning of our portfolio which is targeted at faster-growing economies and an increasing exposure to the US are key differentiators for the Group.”

Douglas Emslie, Group Managing Director

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representing over 40% - Emerging Markets are steadily increasing their penetration, with generally higher levels of GDP growth and a progressive increase in good quality exhibition space.

Tarsus has focused on rapidly building its Emerging Market exposure (Turkey, China, Dubai, Mexico and Indonesia) in recent years and at the end of 2014

Business Sector Key Events Brand EM US EU

Aerospace Dubai Airshow/MEBA ✓

Auto aftermarket AAITF ✓

Clothing OFFPRICE/SIUF ✓ ✓

Education GESS/Educatec ✓ ✓

Housewares Zuchex/Ideal Home ✓

Industrial Asansor/Komatek/Sign/Manufactura/ Plastimagen ✓

Labels & Printing Labelexpo/Gulf Pack and Print ✓ ✓ ✓

Medical MCI/Cardio/South Beach ✓ ✓

AMERICA EUROPEEMERGING MARKETS: Middle East, China, Turkey, South East Asia, Mexico

revenues from these markets accounted for 39% of the total.

Tarsus has a strong presence in the largest single market for exhibitions – the US – through its long-established OFFPRICE shows, the biennial Labelexpo Americas and its Medical Division.

TARSUS AT A GLANCE

Tarsus geographic footprint

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Business Review

strategy

STRATEGYTarsus launched its “Quickening the Pace” strategy in 2013.Thisseekstoacceleratethepaceoffinancialreturns to Shareholders through three principal levers:

• Driving organic growth from the existing portfolio by increasing visitor and exhibitor numbers

• Geograhical replication of major brands into fast growing markets

• Small acquisitions in selected geographies

Our strategy is building on the reshaping of the portfolio over the past few years, which has seen the Group’s exposure to selected Emerging Market economies expand progressively to take advantage of higher levels of growth. With the additions of Indonesia and Mexico in late 2013, the Group now considers its geographic footprint to be substantially complete.

This ability to deliver our strategy is enhanced by the entrepreneurial approach the Group takes towards developing its portfolio. Exhibition markets globally are consolidating and high quality assets are in demand. Tarsus’flexibilityandwillingnesstoworkinpartnershipwith vendors to develop their business and further their strategic goals is increasingly seen by the Group asapointofdifferentiationfromourcompetitorsandis attractive to vendors.

The “Quickening the Pace” strategy targets countries that are experiencing a fundamental shift in prospects - like Indonesia - or industries where technological innovation is driving growth - for example 3D printing.

In 2014, the acquisitions of SIUF in China and 3D Printshow in Europe are cases in point. SIUF is the largest underwear show in Asia and the ability to internationalise the business further through working

“Our ‘Quickening the Pace’ growth strategy gained further traction in 2014. Visitor numbers were up by 6%, our major events performed well and we made good progress with brand replication thus driving organic growth.”


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collaboratively with Tarsus was a key factor in sealing this aquisition. At the other end of the spectrum, 3D Printshow is a small business in an industry that is rapidly evolving and therefore attractive to the Group. Theextrafinancialfirepowerandmarketingexpertisethat Tarsus is able to deliver will facilitate a rapid expansion of this brand in 2015.

STRATEGIC PROGRESS IN 2014Our strategy gained further traction in 2014. Visitor numbers grew, our major events performed well and we made good progress with brand replication thus driving organic growth. The quality of our assets, and the geographical positioning of our portfolio, which is targeted at faster-growing economies are key differentiatorsfortheGroup.

Visitor growth - Visitor growth across the portfolio was 6% in 2014. Whilst there is no global measurement basis, this performance compares well with the CEIR index (US exhibition barometer) of visitor attendance which was up just 1.8%.

An ability to grow the attendances at exhibitions is a

key factor in their ultimate success. Deep knowledge of our customers requirements, up-to-date databases, must attend conferences and a focus on customer service all contribute to this goal.

Replications - Tarsus has a strong track record of successfully replicating its brands globally. Our Labelexpo portfolio has grown from two Western events and one in Singapore to a series in nine countries, the majority being in the Emerging Markets. This has been delivered by leveraging Tarsus’ resources, expertise and connections at both a local and global level.

Tarsus’ strategy to take leading brands in one of its markets and launch and develop them into others is building momentum. We replicated two events in 2014 with the Turkish homeware brand Zuchex and the Chinese auto-aftermarket brand AAITF launched into Indonesia. A further thirteen events are planned for 2015 as shown above.

Acquisitions - Tarsus’ acquisition strategy focuses on markets in transition and market-leading brands. By their nature such acquisitions provide higher growth

Tarsus’ “Quickening the Pace” strategy was launched at the beginning of 2013 and is designed to accelerate financial returns to shareholders through:• Organic growth from the existing portfolio by growing visitor and exhibitor numbers• Geographical replication of brands into faster-growing markets

Show 2014 2015 2016

AAITF 1 1 1

Cardio - 3 -

3D Printshow - 4 2

GESS - 2 -

IPE - 2 -

Zuchex 1 - 1

Labels - - 1

OFFPRICE - 1 -

Total 2 13 5

new replicationS

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Target Achieved2014

Accelerating earnings per share growth 5-10% pa 5%

Increasing share of revenues from US and Emerging Markets 75% 80%

Visitor growth 5% 6%

“Quickening the pace” - KPIs

This table shows the key performance indicators of the Group’s “Quickening the Pace” strategy

2012 2014*

UNITED STATES

2012 2014*

MIDDLE EAST

2012 2014*

CHINA

2012 2014*

TURKEY

2012 2014*

OTHER ASIA/SOUTH AMERICA

25,000

5,000

15,000

US & Emerging Markets revenue by location (£’m)

Since2009TarsushassignificantlyincreaseditsrevenuefromtheUSandtheEmergingMarkets.Tarsusisnowbuilding on these solid foundations and focusing on adding value to Quicken the Pace of growth.

and the possibility of internationalisation. In addition, Tarsus’ entrepreneurial culture is proving to be a valuable asset in terms of attracting potential vendors, many of whom are entrepreneurs themselves, who wish to further grow in partnership.

One of Tarsus’ key territories is Turkey and in February 2014 the Group added to its portfolio with the purchase of Komatek, Turkey’s largest trade exhibition for construction equipment and related products. This biennial show, based in Ankara, is one of Europe’s largestconstructioneventsandisexpectedtobenefitfrom a strong pipeline of major construction and investmentprojectsinTurkey.ThefirsteditionunderTarsus’ ownership will be held in May 2015.

The Group’s Medical business is being progressively repositioned to broaden its appeal to the mainstream medical market in the US. As part of this process twoeventswereacquiredduringtheyear.Thefirst,

in February 2014, was the Cardiometabolic Health Congress, an annual event based in Boston which also provides an established audience for Tarsus’ mainstream product, the Metabolic Medicine Institute, launched in late 2013. The second, in November 2014, was the South Beach Symposium, a leading annual educational event based in Miami for dermatologists, plastic surgeons and other physicians. Both events have the capability for replication into other locations intheUS,offeringanattractiveorganicgrowthopportunity.

Tarsus also bought 60% of the 3D Printshow, which had a current portfolio of market leading annual events in London, Paris and New York. This fast developing and transitioning sector has strong growth opportunities in many territories and good synergies with the existing Tarsus portfolio. Four new shows are planned for 2015.

20,000

10,000

0

22.624.6

4.2 5.0 3.97.6 7.8 7.8

1.03.3

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highlightsBusiness Review

FURTHER STRONG ORGANIC GROWTH Like-for-like revenues up 10%

IMPRESSIVE VISITOR GROWTH 6% increase across the Group

LABELEXPO AMERICAS STRENGTH Visitors up 12% and record rebookings for 2016

EARLY PROMISE IN MEXICO Tarsus’jointventurewithEJKrauseofftoagoodstartwith Expo Manufactura ahead and Plastimagen selling out its venue

EXPANSION IN TURKEY Komatek – Turkey’s leading construction event based in Ankara – added to portfolio

IN REPLICATIONS PROGRESS AAITF and Zuchex launched into Jakarta

MEDICAL PORTFOLIO RESHAPED AND EXPANDED As part of repositioning the business to appeal more to the mainstream medical market, the Group launched the Metabolic Medical Institute (MMI) and complemented this with the strategic acquisitions of the Cardiometabolic Health Congress and the South Beach Symposium

3D PRINTSHOW PURCHASED 3D printing is a fast growing and rapidly changing market and complementary to Tarsus’ existing printing portfolio. Rapid expansion is planned for the 3D Printshow brand in 2015

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Business Review

Chairman’s and Managing Director’s statement

3. Driving visitor growth The Group aims to drive visitor attendance at its events and growth of 6% in 2014 compares favourably with the CEIR index (a key barometer of the US exhibition industry) where visitor attendance was up just 1.8% in 2014.

FINANCIAL RESULTSThefinancialresultswereinlinewithBoard’sexpectations. Group revenues for the full year were £60.6m (2013: £75.9m), up 18% on a biennial basis (2012: £51.5m). Like-for-like revenues, at constant exchange rates, increased by 10%. Revenues were 7% adversely impacted by foreign exchange in 2014.

Groupadjustedprofitbeforetaxwas£17.0m(2013:£24.2m), up 15% on a biennial basis (2012: £14.8m). Netinterestexpenseof£1.7m(2013:£1.5m)reflectedincreased debt levels across 2014 as a result of acquisitions.Reportedprofitbeforetaxwas£8.2m(2013: £15.9m).

The adjusted tax charge of £2.5m (2013: £3.6m) represents 15% (2013: 15%) of the Group’s adjusted profitbeforetax.Thereportedtaxchargeis£1.4m(2013: £2.7m). The Group continues to focus on tax efficiencyandgeneratesnearlyallofitsprofitsoutsideoftheUK,includingmarketswithsignificantlylowertaxrates.

Adjusted earnings per share were 12.7p (2013: 20.0p), 4% up on a biennial basis (2012: 12.2p). Basic earnings per share for 2014 were 5.0p (2013: 12.2p).

The Group generated £16.0m (2013: £24.5m) of cash from operations, an increase of 31% against 2012, the comparative biennial year (2012: £12.2m). The Group’s

STRATEGIC OVERVIEWThe Group made further progress in delivering its “Quickening the Pace” strategy which is focused on acceleratingfinancialreturnstoshareholders.Thisis being achieved through a combination of organic growth from the existing portfolio, geographical replications of major brands across faster growth economiesandtheidentificationofsmallstrategicacquisitions in our selected geographies.

Tarsusmadefivestrategicacquisitionsintheyearandthese additions were aided by the attractiveness of the Group’s entrepreneurial culture to the vendors ofthosebusinesses.TheGroup’ssize,flexibilityandwillingness to work with vendors to develop their businesses in partnership with Tarsus is becoming increasingly attractive to partners and helps accelerate the overall strategy.

The Group assesses its performance against three KPIs:

1. Accelerating EPS growth Through targeting underlying growth at its exhibitions in growth markets, the Group aims to deliver enhanced financialreturnstoitsshareholders.Byproactivelymanaging its portfolio of events, adjusted EPS grew (on a constant currency basis over the biennial cycle) 5% to 12.7p, against a 5-10% growth target.

2. Increasing share of revenues from emerging markets and the US TheGrouphasidentifiedgeographies(certainemerging markets and the US) which it believes provide higher potential for growth. For the year ended 31 December 2014 the Group recorded 80% of revenues from its emerging markets and US events, ahead of its 75% target.

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net debt as at 31 December 2014 increased to £38.4m (2013: £28.6m).

Theboardisproposingafinaldividendof5.4ppershare, bringing the total for the year to 7.8p per share (2013: 7.3p per share), up 7%.

Thefinaldividend,subjecttoShareholderapproval,willbe paid on 8 July 2015 to Shareholders on the Register of Members on 29 May 2015. A scrip dividend will continuetobeofferedasanalternative.

CORPORATE ACTIVITYFive strategic acquisitions were completed during the year.

In December 2013, the Group agreed to acquire 50% of China (Shenzhen) International Brand Underwear Fair (“SIUF”), which runs the leading Asian show for underwear. The acquisition completed in March 2014.

Early in 2014, the Group purchased 60% of Komatek, which runs Turkey’s leading construction equipment event, thereby expanding the Group’s existing construction portfolio into a dominant position in Ankara.ThefirsteventunderTarsus’ownershipwilltake place in May 2015 and bookings tracking in-line with management expectations.

In March 2014, the Group purchased 100% of the assets of HealthScienceMedia Inc. in the US, which organises the Cardiometabolic Health Congress (“CMHC”). In November 2014, Tarsus bought 100% of the South Beach Symposium (“SBS”), a leading dermatology event based in Florida. Both of these acquisitions will further accelerate the development and repositioning of the medical business in the US.

In July 2014, the Group acquired 60% of 3D Printshow, which owns a portfolio of market leading annual events in London, Paris and New York. 3D Printshow is in a fast developing sector and has strong growth opportunities.

The Group also agreed to sell up to 18% of its French business to its French management, in line with a previously stated strategy to reduce its exposure to France.

OPERATING REVIEWEMERGING MARKETS

Dubai - The two principal events in 2014 were GESS (education) and MEBA (business aviation). Both produced strong performances in terms of visitor numbers and revenues. In 2015, the GESS brand is being extended with two replications in Mexico and

Indonesia,whileMEBAislaunchingthefirsteverbusiness aviation event into Morocco.

Turkey - This portfolio of events performed well. The larger shows, Zuchex, Ideal Home, The Flower Show and Sign, again recorded strong performances. Zuchex (housewares and gifts) was launched into Jakarta in November 2014 attracting over 150 exhibitors.

Lookingahead,2015willfeaturethefirsteditionunderTarsus’ ownership of Komatek (construction) as well as the next biennial edition of Asansor (lifts).

China - Hope, the Group’s Central China operation has continuedtoperformwellwithrevenuessignificantlyahead of 2013, led by its medical equipment events.

As previously announced, AAITF, held in February 2014, was behind the previous edition owing to protracted venue discussions. This event was moved to Shenzhen in January 2015 where it performed well. With an increasing focus on in-car electronics and vehicle customisation, forward bookings for 2016 are encouraging and a return to growth is expected. The brand was successfully launched into Indonesia in 2014. 2015 will see a further launch of the AAITF brand into Thailand.

The Group’s presence in China was strengthened by the acquisition of 50% of SIUF, the leading Asian showforunderwear.ThefirsteditionunderTarsus’ownership in May 2014 performed well.

Mexico - In Mexico, the Group established a 50% joint venture (“JV”) with EJ Krause in late 2013, based initially around Expo Manufactura, the country’s premier metalworking/manufacturing exhibition and Plastimagen (plastics). Both produced strong results in 2014 and the latest Expo Manufactura edition held in February 2015 also performed well.

12 Tarsus Group plc

of preventative medicine. In February 2014, CMHC (cardiology) was purchased and in November 2014 SBS (dermatology) was added.

The Group took the opportunity to reposition its educationalofferingwiththeassistanceofhighlyregarded medical universities, such as George Washington. In 2015, Tarsus intends to launch new education products, leveraging the databases acquired with CMHC and SBS. In addition it will look to replicate CMHC events regionally within the US to drive organic growth.

Labelexpo - Labelexpo Americas, the Group’s largest event in 2014, took place in September 2014 in Chicago and produced an excellent performance with revenues up by 13%, strong visitor attendance and record re-bookings for the 2016 event.

OFFPRICE - BothOffpriceeventsinLasVegasduring2014 performed well with solid revenue growth. Importantly, given increased competition for exhibition space in Las Vegas, the Group extended its venue contract to 2019.

EUROPE

France - Trading in the Group’s French business ended the year in line with Board expectations. In January 2014 agreement was reached to sell up to 18% of the French business for €1.5m to its French management. This is in line with the Group’s strategy of reducing its exposure in France.

UK - The Group purchased the 3D Printshow in July 2014 giving exposure to a rapidly transitioning market which has synergies with Tarsus’ existing business. The events in London and Paris were very successful and

This JV provides a foothold for Tarsus in Mexico and an opportunity to expand EJ Krause’s brands into Tarsus’ territories. This initiative began with Expo Comm being launched in Jakarta in November 2014. The JV plans to launch two further shows in 2015, replicating GESS and Industrial Print Expo (IPE) into Mexico.

Indonesia - The Group’s infrastructure event showed good progress. Construction accounts for approximately 10% of Indonesian GDP representing a market in transition with strong growth potential. The Group has formed a JV with DMG Events to launch a “Big 5 Construct” building materials exhibition in Jakarta in May 2015. DMG Events currently organize similar events using this major brand in Dubai, Saudi Arabia, Kuwait and India.

In line with its “Quickening the Pace” strategy two replicated events were launched in Jakarta in 2014, AAITF in May and Zuchex in November - both events were well received by customers.

US

Medical - The Group’s established anti-aging events in Orlando (May) and Las Vegas (December) were both strong shows with record attendances in 2014.

Overall, 2014 was a year of transition for the medical business. Changes to its end markets, including the introduction of Obamacare, have created some uncertainty owing to a lack of visibility over reimbursements to doctors. The Group has embarked on its stated strategy of broadening its preventative medicaleducationofferingbymovingintothemainstream medical market with the launch of the Metabolic Medical Institute (‘MMI’). Tarsus made two strategicacquisitionsaddressingdifferentareas

“Forward bookings for the Group’s major events in 2015 are strong across the board and the two largest exhibitions, Labelexpo Europe and the Dubai Airshow, are well ahead of their previous editions.”


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the business has in place an aggressive launch plan for 2015 which will see the addition of four new events worldwide.

OUTLOOK

Tradingforthefirsttwomonthsof2015hasbeenstrong. AAITF performed well in its new venue in Shenzhen and we are very encouraged by the move. OffpriceproducedanothergoodshowandExpoManufactura performed well. In Dubai, AIME, MRO and GESS were succesful. In addition, we are beginning to seesomeearlybenefitfromthebroadeningofourposition into the mainstream medical market.

Forward bookings for the Group’s major events in 2015 are strong and the two largest exhibitions, Labelexpo Europe and the Dubai Airshow, are well ahead of their previous editions. Across the portfolio, bookings are

tracking 10%+ ahead on a like-for-like basis.

Tarsus’ revenues are very heavily US dollar orientated andwearecurrentlybenefitingfromitsstrength.Thiscurrentstrength,ifmaintained,willbebeneficialtotheGroup’s reported results for 2015.

Given the current global geopolitical environment we have been deliberately cautious in our budgeting for 2015 but are increasingly positive about our trading prospects.

Douglas Emslie Group Managing Director

4 March 2015

Emerging Markets United States Europe

(£m) 2014 2013 2012 2014 2013 2012 2014 2013 2012

Biennial revenue 4.3 21.1 4.2 5.1 - 4.5 - 9.0 -

Annual revenue 19.4 16.0 14.4 19.5 18.7 18.1 12.3 11.1 10.3

Total revenue 23.7 37.1 18.6 24.6 18.7 22.6 12.3 20.1 10.3

Adjustedprofitbeforetax 7.3 14.0 5.4 11.7 8.8 11.0 1.2 4.8 1.1

Geographical Analysis

2012

2014 £60.6m

£51.5m

Revenue

2012

2014 £17.0m

£14.8m

adjusted profit before tax

2012

2014 12.7p

12.2p

adjusted earnings per share

2012

2014 15%

15%

adjusted effective tax rate

2012

2014 £16.0m

£12.2m

cash flow from operations

2012

2014 7.8p

6.8p

dividend per share

highlights

Neville Buch Chairman

4 March 2015

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Business Review

Financial Review

Statement of Financial Position ahead of the events in the following year.

During 2014, the Group generated £16.0m of cash from operations (2013: £24.5m; 2012: £12.2m).

Thekeynon-operatingcashflowsin2014included:

• Dividends paid of £7.0m

• Deferred consideration payments totaling £5.1m

• Tax and interest paid totaling £3.4m

• Acquisition of SIUF, 3D Print, Komatek, Cardio and SBS £17.9m

• Net proceeds from issue of shares £9.6m

• Proceeds from agreement to part dispose of France £0.8m

NET DEBTThe Group’s funding objective is to ensure that thebusinesshassufficientresources,securedoncompetitiveterms,tomeetitsvariousfinancialcommitments as they arise. It achieves this objective byactivelymonitoringitscashflowsandrequirementson both an historic and forward looking basis. The Group is cautious in its approach, applying appropriate sensitivities to both the quantum and timing of its projections.

In July 2014 Tarsus’ external bank debt facility of £60m was extended to remain in place until September 2019. At 31 December 2014 93% of all borrowings were denominated in Sterling with the remainder

FINANCINGThe geographical composition of Tarsus’ international eventportfoliomeansthatrevenuesandprofitsare generated in a range of currencies, principally US Dollars, Euros, Turkish Lira and Sterling. In 2014 approximately 49% of revenues were generated in US Dollars, 16% in Euros, 13% in Turkish Lira, 7% in Sterling and 11% in Chinese Renminbi. As a result, the Group’s Sterling translated trading results are significantlyaffectedbyanychangesinprevailingexchange rates during the year. The average exchange rates applicable for 2014 were:

• US$: 1.61 - a weakening against Sterling of 2% compared with 2013

• Euro: 1.24 - a weakening against Sterling of 5% compared with 2013

• Turkish Lira: 3.53 - a weakening against Sterling of 16% compared with 2013

2015 budgeted exchange rates are US$: 1.60, Euro: 1.25 and Turkish Lira: 3.60.

CASH FLOWSTarsuscontinuestogeneratestrongcashflowsfromitsoperations. The larger events in the Group’s portfolio typically have a positive working capital cycle and the business in general has a low capital investment requirement.

The biennial nature of the Group’s event portfolio results in a decrease in working capital (excluding cash) in even years, including 2014, which do not include the Group’s two largest events. This occurs as deferred income relating to these events builds up in the

“Our high quality portfolio is delivering strong growth in revenues, profits and cash. With a strong balance sheet we are well positioned to achieve our ‘Quickening the Pace’ strategy.”

Dan O’Brien, Group Finance Director

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denominated in US dollars. The Group has entered intointerestrateswapstofixtheinterestratespayableunder its banking facilities.

The Group’s net debt was £38.4m at 31 December 2014 (31 December 2013: £28.6m).

NET ASSETSAs at 31 December 2014, the Group had net assets of £37.5m (31 December 2013: £40.2m).

INTANGIBLE ASSETSIntangible assets comprise goodwill, trademarks and customer lists. The carrying value of intangible assets at 31 December 2014 was £126.8m (31 December 2013: £98.0m).

WORKING CAPITALItistheGroup’spolicytorecogniseprofitsuponthecompletion of an event. Until completion, revenues and costs are held on the Statement of Financial Position. Included in net current liabilities as at 31 December 2014 is deferred income of £28.5m (2013: £18.4m; 2012: £25.3m). Prepaid event costs of £3.7m (2013: £2.8m; 2012: £2.5m) are included in Trade and other receivables.

ACQUISITIONS, DISPOSALS AND

RELATED PARTY TRANSACTIONSOn 6 January 2014, the Company agreed to sell up to 18% of its French business to French management, for €1.5m. This was a related party transaction.

On 5 February 2014, the Company acquired 60% of SADA Uzmanlik Fuarlari A.S. (“SADA”) in Turkey. SADA organises a single event - Komatek - which is Turkey’s largest trade exhibition for construction equipment and related products.

On 7 February 2014, the Company acquired 100% of the assets of HealthScienceMedia Inc. in the US. The expected consideration for the acquisition of the assets is £8.1m in aggregate payable in cash.

On 18 March 2014, the Company acquired 50% of China (Shenzhen) International Brand Underwear Fair (“SIUF”) in China, which runs the leading Asian show for underwear.

On 30 July 2014, the Company acquired 60% of 3D Printshow Ltd in the UK. 3D Print had a portfolio of market leading annual events in London, Paris and New York.

On 10 November 2014, the Company acquired 100% of the assets of the South Beach Symposium for a total expected consideration of £6.5m. SBS is a leading educational event for Dermatologists, Plastic Surgeons andotherphysiciansandrepresentsasignificantaddition to the Group’s medical division.

The Company also raised £10m (gross) through the placing of 5.0m new ordinary shares with existing and new investors on 10 February 2014 reducing the Company’s gearing level following these acquisitions.

POST BALANCE SHEET EVENTSThere were no post balance sheet events.

KEY PERFORMANCE INDICATORSThe Group measures its performance using a number offinancialandoperationalmeasureswhicharecommented upon throughout the Operating Review. Thesefinancialmeasuresprincipallyincludelike-for-likerevenuegrowth,adjustedprofitbeforetax,adjustedEPS and dividend per share.

The Group also focuses on the geographical and divisional composition of its business with the stated strategy of increasing the proportion of revenues from Emerging Markets and the US. Tarsus also has an operational target to grow the number of visitors attending its events by at least 5% per annum.

Dan O’Brien Group Finance Director 4 March 2015

16 Tarsus Group plcDubai Airshow 2013

(£m) 2014 2013 2012

Biennial revenue 4.3 21.1 4.2

Annual revenue 19.4 16.0 14.4

Total revenue 23.7 37.1 18.6

Adjustedprofitbeforetax 7.3 14.0 5.4

39%Percentage of Group revenue generated

from Emerging Markets in 2014

From Mexico City to Jakarta, Dubai to Istanbul, the Emerging Markets are key to the

Group’s continued growth and success.

Emerging marketsMiddle East

China

Turkey

Southeast Asia

Mexico

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MIDDLE EASTEmerging Markets

LOOKING BACK – REGIONAL HIGHLIGHTSAEROSPACE - The UAE boasts excellent global connections with its carriers Emirates and Etihad Airways. Its aviation industry continues to forge ahead with an expansion strategy, leading global passenger traffictablesandplacingrecordbreakingaircraftorders.Dubaialsobenefitsfromitscentrallocation,with over two-thirds of the world’s population within eighthoursflyingtimeoftheUAE.

The Group ran three aerospace industry events in the region during 2014.

Aircraft Interiors Middle East, (AIME) is co-located with the Maintenance, Repair & Overhaul (MRO) Middle East show. Firmly established as the ideal platform for attendees to network and form new relationships in the Middle East, the 2014 edition reported strong attendance with 3,344 visitors from 75 countries, 80 airlines and 229 exhibitors.

MEBA is produced biennially by the Group on behalf of MEBAA - the Middle East and North Africa Business Aviation Association. For its sixth edition, MEBA again attracted the most prominent names and companies in regional business aviation and provided the industry with adecisiveplatformtoaddressandinfluencetheissuesdirectlyaffectingthesectorintheMiddleEastandNorthAfrica. MEBA attracted 8,314 visitors and 422 exhibitors.

EDUCATION - As the education sector continues to be a key pillar for development initiatives in the Gulf States, the Group’s GESS brand continued to perform strongly and was expanded during 2014 in direct response to market demand.

Held in the prestigious Dubai World Trade Centre, GESS Dubai was originally launched in 2008. A truly

With its open economy, sizeable middle class population with high per capita income and excellent, modern infrastructure, the United Arab Emirates (UAE) offers many compelling reasons for doing business in the region. Commanding economic superiority in the GCC, the Emirate of Dubai is the wealthiest and second largest of the seven United Arab Emirates. Also the most populated with over 2.2 million inhabitants, Dubaihasdiversifieditseconomyinordertosurvive the decline of its fossil fuels and set up industry-specificfreezonesthroughoutthecitytoattractforeigninvestment.Offeringapro-businessenvironment, the entrepreneurial spirit is alive and well in Dubai.

KEY FACT : MEBA (middle east business Aviation) event ACHIEVES double digit REVENUE growth

Tarsus Group plc 19

international event covering the full spectrum of educational supplies and solutions. GESS Dubai 2014 saw the launch of the inaugural GESS Education Awards. Replications of GESS are planned for the Mexican and Indonesian markets in 2015.

MEDICAL - The American Academy of Anti-Aging Medicine (A4M) is the Group’s conference and education business based in the US specialising in educating physicians and healthcare professionals inthefieldofpreventive,anti-agingandaestheticmedicine. In 2014, A4M Dubai was appointed as the regional partner for the A4M and a new international officewasestablished.

A valuable growth opportunity for the Group, the 3rd American Anti-Aging Conference was held in Dubai in November while several aesthetic medicine fellowship andcertificationcourseswererunthroughouttheyear.

LOOKING AHEADForward bookings are strong for 2015’s events including the Group’s largest event, the Dubai Airshow.

Maximising organic growth

Tarsus has been operational in Dubai since acquiring F&E in 2007 whose portfolio comprised the Dubai Airshow, GESS (Gulf Educational Supplies & Solutions), Gulf Print & Pack and MEBA (Middle East Business Aviation). In recent years the Group has enjoyed good organic growth from the aerospace and education sectors and has further expanded its activities in the region with events in the medical sector.

GESSDubaiwasfirstheldin2006asaconferencebythe British Educational Supplies Association with 25 UK companies exhibiting and 300 visitors. Bought by Tarsusin2008,itsprofilewaswidenedtoincreaseitsinternational appeal. Gaining the endorsement of the UAE Ministry of Education and education industry trade associations including Worlddidac and Didacta, 2008’s reworked format attracted 150 exhibitors from 15 countries and 3,000 visitors from 21 countries.

With the on-going support of the UAE Ministry of Education, GESS Dubai is the only education exhibition within the region to have the presence of seven Ministries of Education and other education authorities. This allows the event to host high level discussions that seek to change the education sector in the region and provides a platform for their delegations to network, have training and make purchases from the exhibitors. Under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, whose support has been demonstrated by his annual visits to the show, GESS Dubai is undeniably the leading educational event in the Middle East Region.

Over the past three years, the show has grown visitor numbers by an average of 20% increase per annum and by 33% compared with 2013. 2014 saw GESS Dubai consolidate its position as the region’s leading platform for showcasing the latest educational solutions from around the world with 350 exhibitors from 35 countries and 9,000 visitors from 74 countries.

2008 2014

Exhibitors 150 350

Countries exhibiting 15 35

Visitors 3,000 9,000

Countries visiting 21 74

20 Tarsus Group plc

LOOKING BACK – REGIONAL HIGHLIGHTS

AUTOMOTIVE AFTERMARKET - With more than 137 million cars on its roads, revenue from the automotive after-sales services market - which includes car maintenance,parts,in-carelectronicsandmodification- exceeded 450 billion yuan ($72.95 billion) in 2013. This is forecast to exceed 766 billion yuan in 2015, according to Chinanews.com.

The 10th edition of AAITF was held in Guangzhou. Attracting over 250,000 professional buyers, the show

With a population of over 1.3 billion, China is renowned as one of world’s leading economies. Playing an increasingly important and influential role on the global stage, China is still developing and offers unprecedented regional growth.With annual growth of 10% for over 30 years, China has transformed itself into an economic success story. Owing to its sheer size, China is divided into regional economies. One of the most exciting Emerging Markets in which to do business and delivers opportunities in abundance.

The Chinese market was immature by current standardswhenTarsusfirstlaunchedLabelexpoinChina in 2003 and COTTM (China Outbound Travel & Tourism Market) in 2004. Since those early days, the business landscape has been transformed.

Emerging Markets

China

KEY FACT : CHINA IS the 3rd largest exhibition market in the world with leading infrastructure

OpeningitsfirstofficeinShanghaiin2005,Tarsusnow ranks in the top ten non-domestic exhibition organisers with over 30 events.

Tarsus Group plc 21

featured over 3,000 exhibitors and witnessed the launch of over 20,000 new products.

CLOTHING - Complementing Tarsus’ existing clothing business in the USA – OFFPRICE – Tarsus acquired the China (Shenzhen) International Brand Underwear Fair (SIUF) in March 2014. SIUF was launched in 2006 and hasbecometheleadingshowintheAsiaPacificmarketfor underwear garments. It is an annual event, held in May at the Shenzhen Exhibition and Conference Centre in Southern China.

The global underwear market is currently valued at approximately $30 billion. The Chinese market was valued at approximately $10 billion in 2010 and is the fastest growing market globally, supported by a strong domestic manufacturing and retail base.

The2014event,thefirstundertheGroup’sownership,covered an exhibition area of 58,500 square meters (up from 51,000 in 2013) registering 589 exhibitors (up from 522 in 2013) and 50,000 visitors.

LABELS & PACKAGE PRINTING - Tarsus organises two Labelexpo events in China – Labelexpo Asia in Shanghai and Labelexpo South China in Guangzhou. Formerly known as the South China Label Show, the new look Labelexpo South China was held in December 2014. Graduating to become a full Labelexpo-branded event, the show underlined its position as the region’s largest event for the label and package print industry with over 150 exhibitors and 5,297 visitors (up 4% on the 2012 edition).

OTHER BUSINESS SECTORS - Hosting numerous other events across China as part of its joint venture with Hope, a highlight included the eighth edition of the

China Horse Fair (CHF) which achieved record results with 2,400 buyers and 140 exhibitors. China Outbound Travel & Tourism Market (COTTM) celebrated its tenth anniversary and reported a 60% rise in visitor numbers with over 3,000 attendees and more than 400 exhibitors from 65 countries.

LOOKING AHEAD AAITFwasthefirstlargeeventof2015andtookplaceat its new venue in Shenzhen. This is a transitional year for the event given its change of location, however it performed well and we are encouraged by the move.

Organic growth in an ever emerging market The Chinese exhibition industry

continues to go from strength to strength and as part of Tarsus’ strategy remains a critical market for the Group to operate in. Though many of Tarsus’ events are held in China’s largest cities in the East and South of the country such as Shanghai, Guangzhou and Shenzen, this business is experiencing strong, sustainable growth from its events held in Central and Western China.

Established in May 2008, the Tarsus-Hope Exhibition Company is an international joint venture formed by Tarsus and Hubei Hope Exhibition (Hope). Founded in 1996, Hope is one of China’s earliest and most respected independent event organisers.

Through strong organic growth, Hope has steadily developed its event portfolio to cover more than sixlocationsincludingofficesinShanghaiandtheso-called second tier cities of Wuhan, Zhengzhou, Hefei, Changsha, and Chengdu. It organises over 20 successful exhibitions annually which cover industries such as medical equipment, health care, advertising and printing, manufacturing, sports and leisure.

This growth pattern has been driven by inward investment from the Chinese Government and also by private companies moving manufacturing away from the costly Eastern Seaboard into these provincial areas where the infrastructure is good with high population density. As Tarsus has been active within the wider Chinese exhibition industry since 2004, the Group has stayed ahead of the curve by identifying a growing demand outside of its key brands for quality exhibitions in these areas.

Tarsus was the only international exhibition organiser to be represented on the British Government’s largest ever trade delegation to China in late 2013. The Chinese Government has been proactively exploring opportunities for commercial partnerships with foreign companies in recent years and this is a good indication that China will continue to foster strategic relations with international companies to develop its exhibition industry into a world leader.

With so much development opportunity, Tarsus Hope is ideally placed to continue its strong organic growth through event replications into second and third tier cities in Central and Western China.

22 Tarsus Group plc

LOOKING BACK – REGIONAL HIGHLIGHTS

HOUSEWARES - The Turkish housewares/gift sector continues to register good annual growth, fuelled by a vigorous house building program as well as an increase in marriage.

Zuchexwasfirstheldin1989andissupportedby the Turkish Houseware Association. The event connects manufacturers and suppliers of housewares, homestyle, gifts and electrical appliances, with retailers and distributors from the region. The 25th edition, held in September 2014, presented the latest product designs from 617 exhibitors and hosted 31,992 visitors.

Zuchex’s sister show Ideal Homex, held earlier in the year, proved equally successful with 296 exhibitors and 22,519 visitors.

INDUSTRIAL - The region’s most important platform for showcasing the latest innovations in sign making, advertising and digital print technologies, SIGN Istanbul

Turkey strategically links the European and Asian continents. Together with Mexico, Turkey has been identified as one of the world’s next Emerging Market economies.

With a population of approximately 75 million, Turkeyoffersalarge,skilledandcosteffectivelabour force. In addition, some 60% of its population is aged under 35 thus providing substantial growth potential. Turkey is in an earlystageofdevelopmentandoffersattractiveprospectsforgrowthandbusinessdiversification,being an excellent springboard for business with central Asia and the Middle East.

Tarsus has been active in the Turkish market since 2011 when it acquired Istanbul-based IFO. This was quickly followed with the acquisitions of CYF and Life Media in 2012 and SADA in 2014. Tarsus is on track to be the largest international exhibition organiser in Turkey by net exhibition space in 2015.

TURKEYEmerging Markets

KEY FACT : tarsus on target to be the largest international organiser in turkey in 2015

Tarsus Group plc 23

2014 generated sales of US$68 million for exhibitors in four days. Hosting 390 exhibitors from 33 countries, the 16th edition of this annual trade fair was visited by 20,916 industry professionals with one in seven visitors being from overseas.

OTHER SECTORS - Widely regarded by the trade as a must attend event for international suppliers looking to boost their export sales, the Flower Show Turkey was staged in November 2014. As Eurasia’s premier eventfortheprofessionalhorticulturalandfloriculturalsector, the show is one of Group’s key brands in Turkey and has international appeal with 333 exhibitors from 21 countries and 11,385 visitors from 44 countries.

The Recycling, Environmental Technologies and Waste Management International Fair (REW Istanbul) enjoyed 10% growth in visitor numbers with 10,203 professionals from 56 countries attending 2014’s event. Supported by the Turkish Ministry of Environment and Urban Planning, the show featured 304 exhibitors from 26 countries.

LOOKING AHEAD Of Tarsus’ existing brands, there will be editions of Zuchex, Ideal Homex, Sign, Yapi Decoor, REW, Flower Show Turkey and ASANSOR in 2015. Pre-bookings for these events remain in line with the Group’s expectations.

The purchase of Komatek (SADA) further strengthened Tarsus’ position in the Turkish market and added scale totheGroup’sAnkaraoperations.Heldforthefirsttime under Tarsus’ ownership in 2015, Komatek is the largest construction equipment exhibition in Turkey and one of the largest events in Europe. With US$1.0 trillion worth of major construction and investment projects expected to be completed in Turkey between now and 2023, the Group anticipates strong growth in the future.

As one of the Group’s six main geographical areas for growth, Turkey will also see the introduction of anumberofnewevents.Coveringfireprotection,security technology and IT security, SecuriTex Eurasia takes place in Ankara, while ISG Eurasia will be co-located alongside REW in Istanbul and cover the occupational health and safety industry.

Being held in June 2015, AAITF Istanbul will be a further launch of the AAITF brand outside of China. Turkey has the world’s 16th largest automotive industry (as of 2012) and is a major vehicle manufacturing centre with annual exports in excess of US$21.6bn (2013). AAITF Istanbul 2015 is strategically located to not only meet the changing needs of Turkey’s domestic auto aftermarket sector, it will also focus on attracting trade buyers from across the Eurasian region, the Balkans, CIS, Middle East and North Africa.

Strengthening market position through scale and expertise

Active in Turkey since 2011, the Group has executed a disciplined acquisition strategy, purchasing existing successful exhibition businesses.

TurkeyofferstheGroupimmense scope for

growth in the coming years across its existing portfolio of events in Istanbul and, more recently, in Ankara. Thecountryhasundergonesignificantchangewithinward investment in its infrastructure and driven by an increasing middle class with rising disposable income. As the world’s 18th largest economy, Turkey has experienced strong economic growth over the past decade – one of the best performing markets with only China outpacing it in recent years.

Owning three of the top 10 exhibition brands in Turkey – Zuchex, Komatek and Ideal Homex - Tarsus is well positioned to leverage continued growth across its market sectors as it consolidates its interests and applies its deep exhibition knowledge.

Bought in February 2014, Komatek is the region’s largest trade fair for construction equipment. Its acquisition was complementary to Tarsus’ CYF business, which owns Yapi Decoor (a building materials event), the biennial Asansor show and the Group’s infrastructure event in Indonesia.

Although Istanbul dominates Turkey’s exhibition market owing to its location and links, Komatek is expected to post good organic growth in future years as Ankara’s importance as an exhibition destination is anticipated to increase when the new Akyurt venue is built.

Tarsus’ immediate focus is to capitalise on the potential it now has with good critical mass in the construction industry. The Group is well placed to enhance its resilience and grow market share by exploiting synergies across its events through the sharing and cross fertilisation of data and expertise.

24 Tarsus Group plc

LOOKING BACK – REGIONAL HIGHLIGHTSAUTOMOTIVE AFTERMARKET - Tarsus partnered with Dyandra Promosindo, organiser of the Indonesian Motor Show to launch the inaugural AAITF Jakarta in March 2014. As one of the world’s fastest growing economies, Indonesia has experienced a dramatic surge in automotive vehicle ownership. With car sales approaching one million units per year, Indonesia is a critically important market for global automotive aftermarket suppliers.

2014’s event attracted 1,839 visitors and provided a lucrative business to business platform for 49 international and 22 local suppliers of automotive aftermarket products to meet with retailers, distributorsandautomotivemodificationandtuningworkshop owners from Indonesia and Southeast Asia.

Southeast Asia offers excellent opportunities for businesses looking beyond the traditional BRIC nations (Brazil, Russia, India, China) and is a strategic region where economic growth and development are predicted to surpass the global average.ASEAN’s Free Trade Agreement combined with its wealth of natural resources, low-cost skilled workforce and growing middle class ensuretheregionoffersdynamicandvibrantopportunities for commercial growth. Tarsus has predominantly focused the core of its business interests in Indonesia since 2013 by acquiring PT Infrastructure Asia and partnering with Dyandra Promosindo. Southeast Asia’s biggest economy, Indonesia is the fourth most populous country in the world with over 250 million inhabitants and is a rising powerhouse on the global stage.

Emerging Markets

SOUTHEAST ASIA

KEY FACT : INDONESIA REPRESENTS A MARKET IN TRANSITION WITH CONSTRUCTION REPRESENTING10% of INDONESIAN GDP

Tarsus Group plc 25

HOUSEWARES - With its large population and as the fastest growing economy in the G20 after China, Indonesiaofferstremendouscommercialprospectsforthe housewares sector. The culture of family gatherings, entertaining at home and a growing middle class of 120

millionpeopleprovidesasignificantpotentialmarketforsales.

Driven by a boom in home ownership in Indonesia with consumer spending accounting for 57% of GDP, the inaugural Zuchex Indonesia presented a valuable opportunity for the housewares industry.

Held in November in Jakarta, the show made history as the firsteventofitskindinIndonesiawithover150exhibitorsfrom Indonesia joining foreign players from Turkey, Malaysia, Korea and China. The show attracted 3,129 buyers from major retailers including Alun-alun Indonesia, Kumala Home, Ace Hardware, Debenhams, Lotte Mart, The Hard Rock Cafe, The Four Seasons, Carrefour, Parkson and Centro, Hotel Mulia and Kawan Lama Internusa.

INFRASTRUCTURE - Indonesia is now gearing up with plans to invest heavily in modernising its infrastructure to upgrade roads, ports, water facilities, and power plants. With the new Indonesian President Joko Widodo comingtoofficeinOctober,plansareunderwaytoinvite the private sector to participate in this program and take advantage of investment opportunities.

Tarsus’ annual Indonesia Infrastructure Week (IIW) brings together infrastructure related exhibitions, conferences and seminars with the aim of accelerating infrastructure developmentacrossIndonesia.Itoffersanunprecedentedopportunity for the infrastructure, construction and technology community to come together to build and strengthen existing partnerships between the public and private sector from Indonesia and abroad. 2014’s events attracted 10,328 visitors and 207 exhibitors.

LOOKING AHEAD Following on from the success of 2014’s events within the region, Indonesia Infrastructure Week and AAITF Jakarta will both return in 2015. In addition, the AAITF brand is being extended into Thailand with the launch

of AAITF Bangkok in December 2015. GESS will be the latest Tarsus-owned brand to be replicated into the market with GESS Indonesia 2015.

The Group is also working with dmg events to launch in May 2015 in Jakarta the Big 5 Construct Indonesia exhibition to serve the country’s escalating construction sector. dmg events organises the Big 5 series of exhibitions, the Middle East’s largest construction event in Dubai, and events in Saudi Arabia, Kuwait and India. With construction representing 10% of Indonesian GDP, the new show will bring the international building and construction world together in a single location to provide a valuable meeting place to source products, conduct business and build strategic partnerships.

Mobilising for growth in Emerging Markets Southeast Asia, in particular Indonesia, is an increasingly important market for Tarsus since its

acquisition of a stake in PT Infrastructure Asia (PTIA) in 2013.

Highly entrepreneurial, PTIA was a new start-up when it launched IIICE (since rebranded as Infrastructure Week) in 2009. It has quickly become one of Indonesia’s fastest growing exhibition organisers and is a vital strategic partner for the Group. Providing a strong foothold for doing business in what is the region’s largest economy, Tarsus’ joint venture with PTIA will enabletheCompanytofosterandrealisesignificantgrowth in the coming years.

Initially building on PTIA and Infrastructure Week’s Government support and strong local reputation, the Group is galvanising its plans for future expansion through organic growth and new product launches.

The wider Indonesian exhibition industry is highly fragmented and dominated by many small local organisers with a few international organisers such as Tarsus operating there. Tarsus’ strategy going forward is to capitalise on the growth of the Indonesian exhibition market as it starts to consolidate and mature.

Tarsus has carved out a strong and trusted reputation around the world and it has been evolving its business accordingly in the South East Asian region. Taking a systematic approach, the Group has been putting into place the resources it needs at a local level, such as effectiverecruitmentandgettingtherightskillset,todeliver and widen its events portfolio.

The Indonesian market is undergoing a period of rapid change, with a marked shift away from its historical emphasis on consumer events towards B2B exhibitions. Tarsus is using its global expertise to raise the standard of trade exhibitions in the Indonesian market. Utilising all of its organising skills and knowledge, Tarsus’ commitment is to design and run events of the highest international standard with specialised exhibitors and highlyqualifiedvisitors.

26 Tarsus Group plc

Emerging Markets

MEXICO

Dubbed as a MINT country, Mexico (along with Indonesia, Nigeria and Turkey) has been identified as one of the next crucial locations on the global map for commercial growth and brand expansion.

With the US to the North and Latin America to the South, Mexico is perfectly placed for cross border trade.

As part of the world’s largest free trade agreement, Mexicooffersanattractivebusinessenvironmentto overseas investors. Rapid advances in its infrastructure, a growing middle class and rapidly declining poverty rates lead to forecasts that the country will enjoy a higher GDP per capita than all but three European countries by 2050.

Tarsus has staged events in Mexico since 2004 when the firstLabelSummitLatinAmericawasheldinMexicoCity.

In December 2013, Tarsus and EJ Krause & Associates (EJK) formed a strategic partnership to expand into Emerging Markets with the Group acquiring a 50% interest in two major exhibitions owned by EJK. The two events in the joint venture were Plastimagen Mexico, the leading exhibition for the plastics industry in Latin America and Expo Manufactura, Mexico’s premier manufacturing event. In addition it was agreed that the joint venture would launch a number of its key brands into the Mexican market.

KEY FACT : PLAStimagen’s 19th edition in 2014 attracted over 700 exhibitors from 21 countries

Tarsus Group plc 27

LOOKING BACK – REGIONAL HIGHLIGHTSINDUSTRIAL - The 18th edition of Expo Manufactura drew record attendance with almost 10,000 professionals came together to generate business within the manufacturing and processing industries. Attracting over 300 exhibitors from 18 countries, representing more than 600 brands, exhibitors at ExpoManufacturapresentedacompleteofferingof what manufacturers in any industry need and use in their assembly. 2014’s edition showed strong growth, expanding by nearly 14%. A large share of this expansion came from companies providing solutions for the automotive, aerospace, and medical device sectors.

Plastimagen took place in November and celebrated its 19th edition with its largest event to date with 12% growth in exhibit space. Over 700 leading companies exhibited the latest cutting edge plastics products, trends and technology from 22 countries. Plastimagen has become the business hub for the plastics industry in Latin America, gathering over 28,000 decision makers and has emerged as one of the most prominent international events for the plastics industry. This year, global participation grew by 6.8%, and included attendees from over 36 countries. In addition,theexhibitionfloorcontained13internationalpavilions including newcomers Germany and the UK. Business deals conducted by exhibitions during the sell-out event topped $120 million.

LOOKING AHEAD As one of the largest and fastest-growing markets with close trading ties with the US, the Mexican exhibition marketofferssubstantialpotentialforgrowth.Buildingon2014’ssuccess,theGroupisrunningthefirstever edition of Industrial Print Expo. Co-located with 2015’s Expo Manufactura, Industrial Print Expo will beMexico’sfirsttradeshowexclusivelydedicatedtoindustrial print within manufacturing.

The 12th edition of Label Summit Latin America will be held in Mexico City in April while Plastimagen next returns to the capital in March 2016. Tarsus-owned brand replications are also planned with the inaugural edition of GESS Mexico in April 2015 and AAITF Mexico in June 2016.

Strategic alliances to accelerate growth into new markets

Strategic alliances are a key element of Tarsus’ growth

strategy and its joint venture (JV) with EJ Krause (EJK) signed in late 2013, has accelerated Tarsus’ footprint in what is poised to be a major global trading region.

Although Tarsus has been operational in Mexico for over ten years with its Label division, the Mexican exhibition industry is very fragmented and requires local knowledge and expertise. EJK was founded in 1984 and is one of the largest privately held exhibition companies in the world. Headquartered in the US EJK hasofficesonthreecontinentsandproducesover80eventsin16differentindustrieswhichmakeitanidealpartner for Tarsus in the Mexican market.

This JV is one of the largest international exhibition companies in Mexico. A major platform for our continued international expansion, the partnership enables the Group to further its programme of event replications as well as launch several new events. Servicing the needs of Mexico’s dynamic economy, two of Tarsus’ key brands – GESS and AAITF - are being launched in 2015 and beyond.

GESS is an established major brand in the Middle East education market and the Mexican replication allows Tarsus to build on its expertise and expand into this fast-growing economy. Quality education plays a key role in the economic development of any nation and is one of the key forces in enabling growth. Mexico’s national education system currently serves 35 million children and President Enrique Peña Nieto’s government allocated a record investment of over $47 billion for education in 2014.

Mexico has the world’s eighth largest automotive industry (2013) and as production is now overtaking Brazil. It is a major vehicle exporter, with giants such as Nissan, Mazda, Honda and Audi all racing to set up factories. AAITF Mexico 2016 is strategically located to not only meet the needs of Mexico’s domestic auto aftermarket sector, but also focus on attracting trade buyers from Central and South America.

28 Tarsus Group plcLabelexpo Americas 2014

Tarsus Group plc 29

(£m) 2014 2013 2012

Biennial revenue 5.1 - 4.5





from the United States in 2014

united statesunited states

With operations across the United States from Las Vegas to New York , America is an

important territory for the Group

30 Tarsus Group plc

LOOKING BACK – REGIONAL HIGHLIGHTSCLOTHING - The OFFPRICE retail industry has gone from strength to strength in recent years. The continuing uncertain economic climate has contributed to a growth in demand for value products and 40% of clothes purchased in the US are now discounted.

From apparel to footwear, accessories to jewellery, available from 20% to 70% below the wholesale price, it is easy to see why the OFFPRICE Show is a must-see. First held in 1995, this biannual discount clothing and accessories event started with just 24 exhibitors andhasgrownsignificantlyunderTarsus’ownership.Celebrating its 40th edition in August 2014, the show’s sheer scale demonstrated its development with 10,600 visitors and over 500 exhibitors occupying 1,200 exhibition stalls. The event continues to attract over 1,000 new retailers at each edition.

LABELS & PACKAGE PRINTING - Labelexpo Americas, the Group’s largest event of 2014, took place in September 2014 in Chicago. The biggest dedicated event for the label and package printing industry in

The United States remains the world’s biggest single market for exhibitions where few sectors are not represented. The market overall continues to show impressive growth and exposure to this dynamic is a must for any serious exhibition operator.Tarsus has been active in the North American exhibition and publishing industry since being founded in 1998. Starting with the Labelexpo brand which was launched in 1989, Tarsus increased its interests there by acquiring OFFPRICE in 1999 with additional acquisitions of TSNN in 2000 and its Medical business in 2006.

united states

KEY FACT : 40th edition of OFFPRICE show attracted 10,600 visitors and over 500 exhibitors

Tarsus Group plc 31

the US, this edition was enhanced with several new and innovative feature areas (Smart Mart and Craft Beverage Day) to open new markets and attract new exhibitors and visitors to the show.

Marking its 25th anniversary, the event registered a 12% increase in visitors with 16,029 attendees and achieved a record-breaking 83% onsite rebooking rate for 2016’s event. Labelexpo Americas 2014 also saw theofficiallaunchoftheLabelAcademy,theGroup’sglobaltrainingandcertificationprogrammewhichprovides a set of e-learning modules for label industry employees.

MEDICAL - 2014 closed with thousands of medical practitioners attending the 22nd Annual World Congress in Anti-Aging Medicine which was held in Las Vegas. Proving to be the largest event the Medical division has hosted to date, this congress featured more than 320 exhibitors and over 80 speakers from a varietyofmedicalfieldsandspecialties.

During the year Tarsus broadened its preventative medicaleducationofferingwiththelaunchoftheMetabolic Medical Institute (MMI). In addition, the Group acquired the South Beach Symposium and the Cardiometabolic Health Congress (CMHC) during the year. SBS is a market-leading event annually held in Miami and focuses on all aspects of dermatology; the acquisition also included a soon to be launched online education business.

ThefirsteditionoftheCMHCundertheGroup’sownership since its acquisition in February 2014, took place in Boston in October. Over 1,400 clinicians attendedtheeventwhichofferedmorethan50sessions and symposia covering the latest science and strategy for managing patients with cardiovascular and metabolic disorders.

A key step in the transitioning of the Group’s Medical business and the implementation of the “Quickening the Pace” strategy, both of the acquisitions are complementary to Tarsus’ existing Medical business and will accelerate MMI’s move into the mainstream medical market.

LOOKING AHEAD Tarsus continues to focus on the US as one of its key geographical areas for growth.

Of the existing key brands, OFFPRICE will be expanding its presence from Las Vegas and New York City to Miami in June 2015, while Labelexpo Americas has strong re-bookings for 2016’s edition.

Having acquired 60% of the 3D Printshow in the third quarter of 2014, editions of the show are set to take place again in 2015 in New York and in California for thefirsttime.

Mature shows still yielding organic growth

Starting with just 24 exhibitors in 1995, OFFPRICE has grown into a Las Vegas Fashion Week staple and means big business for its stakeholders.

In 2014 OFFPRICE marked its 40th edition with 500 plus exhibitors and over 8,000 buyers attending.

Today, buyers from all 50 states and several international locations stream through the doors to see what fashion deals are available for them to add to their stores.

OFFPRICE has demonstrated a steady growth over the years, growing to 132,000 square-foot Fashion Week mainstay that it is today. Few could have anticipated the show equating to the size of two football pitches at the beginning.

There are 15 companies that joined the show in 1995 that are still exhibiting today. The exhibitors understand what it takes to remain successful and do what it takes to have a stand packed with great product that catches the eye of retailers. When viewed through the lens of the buyers, the current state of OFFPRICE couldn’t be better.

OFFPRICE exhibitors write hundreds of millions of dollars’ worth of business twice a year. They need OFFPRICE as our exhibitors testify:

Sharpe’s Department Stores: “OFFPRICE has been great for us, keeping us competitive in an increasingly tough marketplace. We’d be lost without it. Truthfully, OFFPRICE is no longer an apparel trade show in the desert as it is a community.”

“I don’t know where I would be without OFFPRICE. Seriously. I mean we just found some huge, great accounts that we’d never have gotten without OFFPRICE,” Klayman Pants.

As co-founder Ed Bernard said of the 40th edition: “OFFPRICE has put a lot kids through college, built a lot of houses, paid for a lot of cars. I’m very proud of it. It’s been a great run!”

32 Tarsus Group plcHeavent Paris 2014

Tarsus Group plc 33

EUROPE

(£m) 2014 2013 2012

Biennial revenue - 9.0 -





by Europe in 2014

Home to one of the Group’s largest shows - the bienniel Labelexpo Europe - and a

portfolio of French events, Europe remains an important part of the group.

34 Tarsus Group plc

LOOKING BACK – REGIONAL HIGHLIGHTSFRANCE - Tarsus has a broad portfolio of business services events in France covering sectors including education, marketing, IT and the events and meetings industry. Tarsus agreed to sell up to 18% of its French business to management in January 2014 and the division nowaccountsforlessthan5%oftheGroup’sprofits.

Heavent Paris is Europe’s market leading trade show for the events industry. Its 14th edition was well received but as show visitors were by accreditation-onlyforthefirsttime,numbersweredownby15% compared with 2013. Its sister show, Heavent Meetings which is held in Cannes, performed well with 6,000 scheduled meetings, 350 VIP-hosted buyers and 250 exhibitors.

The 19th edition of Educatec-Educatice was held in Paris in November. Covering all aspects of the French education system, the exhibition registered an increase in visitors of over 5% visitors compared with its last edition in 2013.

In line with our ‘Quickening the Pace’ strategy, the Group’s business has been increasingly focused on selective Emerging Markets to reduce exposure to the slower growing European markets.

europe

KEY FACT : labels & Labeling magazine has 25,500 readers from 114 countries

Tarsus Group plc 35

INDUSTRIAL - With the 3D printing market becoming more mainstream and demand predicted to grow exponentially, Tarsus acquired 60% of the 3D Printshow in July 2014. While there is huge interest from consumers, market research indicates that strong growth is likely to come from industrial systems where 3D printers will be used for prototyping and for manufacturing in healthcare,

aerospace and the automotive industries. Gaining increasedprofile,eventechnologygiantssuchasHPare getting in early to claim a share of this burgeoning market. Two events were run during 2014 under Tarsus’ co-ownership in London and Paris. London hosted 5,025 visitors and 70 exhibitors and France featured 59 exhibitors and attracted 3,880 visitors.

LABELS & PACKAGE PRINTING - Supportive of the Labelexpo Global Series of events, Labels & Labeling magazinewasfirstpublishedinJanuary1979.Aimed directly at the label industry, it is now globally recognised as the industry’s leading trade title with over 25,500 readers from 114 countries. 2014 saw Labels and Labeling experience its best ever year by generating its highest amount of sales across the publishing portfolio.

OTHER BUSINESS SECTORS - Online Recruitment (Onrec) magazine is for HR directors, personnel managers, job boards and recruiters providing them with information on the internet recruitment industry. During 2014, Onrec events including its annual awards programme and an exhibition and conference, were held in the UK. A regional trade conference was staged in Denmark.

LOOKING AHEAD Forward bookings for the Group’s major events during 2015, including Labelexpo Europe, are strong and well ahead of their previous editions. Across the portfolio, bookings are tracking 10% plus ahead on a like-for-like basis. The 3D Printshow has an aggressive launch plan in place for 2015 with four new events scheduled

alongside the existing events in London, Paris and New York.

GROWING OUR EVENTS THROUGH DEVELOPING INDUSTRIESQ&A with Kerry Hogarth, founder of the 3D Printshow

WhatbenefitshasthejointventurewithTarsusbroughtto you and the 3D Printshow?

Tarsus has given us the ability to expand at a much faster rate, ensuring we secure new shows in some key countries.

The partnership has helped us to establish ourselves as an industry event. Working together has given us the opportunity to cohabit with the Dubai Airshow, thus ensuring we are well established within industry and aerospace application.

The investment has meant we have been able to hire a permanent events and sales team. Having a full time team means we can plan years ahead, work smarter and sell more.

What areas of the business has the partnership helped enhance the most?

Having the ear and support of the Tarsus operations team has given us a great insight into how to work smarter. Having access to tried and tested systems is a huge support.

Beingabletofinanciallyplanaheadandhirefulltimestaffhasmeantwecanexpandfasterandinamuchmorecosteffectiveway.

Securing a partnership with such a well-respected business has opened doors with larger businesses and customers and has meant we are taken more seriously in the industry.

How do you see the 3D Printshow brand developing in thenextfiveyears?

The size of the shows will substantially grow across all our major cities and we will be established as the global leading industry show in additive manufacturing and 3D printing.

In 2015 we will launch our media arm and the sister publication to 3D Printshow. Our new magazine and news website is called ‘Disruptive’ and over the next fiveyears,itwillbecomethevoiceofthe3Dprintingecosystem.

3D Printshow currently leads in the prosumer and consumermarketplacefor3Dshows,butwithinfiveyears we will also lead in the Industrial applications and business element.

36 Tarsus Group plc

CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTSAs a global company, Tarsus is strongly committed to corporate social responsibility (CSR) – to acting responsibly, operating sustainably and contributing to the communities in which we work and live. This is a summary of some of the key activities that our Corporate Social Responsibility Committee and Group employees have taken part in this year.

SUSTAINABILITY AND ENVIRONMENTAL POLICIES Tarsus is committed to ensuring its operations are as environmentally friendly as possible, and has a number of company-wide policies to achieve this, including:

i)Keepingstafftraveltoaminimumandmakingactiveuse of alternative means of communication (e.g. video conferencing etc) to reduce travel requirements and reduce the Group’s overall carbon footprint where possible;

ii) Discouraging the printing of emails and making information available online in addition to in print to reduce paper wastage; and

iii) Encouraging the development and use of Mobile Apps at our events, which contain all show data to reduce the volume of print event guides required.

CORPORATE CHARITY SUPPORT - EVENTS FOR NAMUWONGOTarsus once again chose to support Events for Namuwongo; its corporate charity choice for the last few years. Following on from the success of taking part in 2013’s Three Peaks Challenge, Team Tarsus challenged themselves to take on the London to Paris

Governance

Corporate Social Responsibility

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abuse, sexual exploitation, AIDS, a derelict sanitation system and an average wage of just 20p a day. This is real life in Namuwongo, a slum community of up to 30,000 people living near Kampala, Uganda.

In spite of their life-threatening living conditions, the inhabitants are hardworking, energetic people, striving to solve their own problems and improve their lives. Events for Namuwongo works with the community to facilitate real change – and build a long-lasting friendship with the community in the process.

cycle ride.

A 23-strong team made up of Tarsus’ employees and fellow exhibition industry professionals put in a lot ofdedicationandtrainingbeforesettingoffinJune.Covering over 200 miles in just three long gruelling days, the team raised £31,955.

Events for Namuwongo is an innovative partnership of companies and individuals from the Events Industry who have come together to support this Ugandan community and give its inhabitants a brighter future.

Poverty, chronic malnutrition, polluted water, drug

38 Tarsus Group plc

Board of directorsGroup Structure

EXECUTIVE DIRECTORS1. Neville Buch (68) (Chairman) founded the Group when it launched in 1998. He was previously Executive Chairman of Blenheim Group plc, a leading international exhibition, publishing and conference company which was acquired by United Business Media plc for £593 million in 1996.

2. Douglas Emslie (48) (Group Managing Director) joined the Group when it launched in 1998 as Finance Director, becoming Group Managing Director in 2000. Prior to joining the Group he held senior management positions at Blenheim Group plc and after its takeover, United Business Media plc. He is past Chairman and remains a Director of both the Association of Event Organisers and the Events Industry Alliance. He is also thefirstinternationalboardmemberoftheUSindustrytrade body – SISO.

3. Dan O’Brien (47) (Group Finance Director) joined the Group in July 2011. Since qualifying as a Chartered Accountant with Deloitte in 1991 he has held the role of CFO at TV production company Shine Group and at the listed B2B publisher Huveaux plc. He also held seniorfinancerolesatHansonplc,computergamescompany Eidos and Digital Theatre.

NON-EXECUTIVE DIRECTORS4. David Gilbertson (58) (Non-executive Director) joined the Group in March 2014 as the Company’s Senior Independent Director, Chairman of the Remuneration Committee and a member of the Nomination, Audit and Disclosure Committees. Prior to joining the Group he held the position of Chief ExecutiveOfficeratEmapLimitedandInformaplc.HeisChairmanofWTG,BriefingMediaLtd,MLexmarketintelligence, Gambling Compliance, Green Power Conferences and Old St Labs, a non-executive director of Sigaria and an adviser to Metal Pages Ltd.

5. Tim Haywood (51) (Non-executive Director) joined the Board of Directors as a Non-Executive Director in July 2014. He is Chairman of the Audit Committee and a member of the Remuneration, Nomination and Disclosure Committees. He is Group Finance Director at Interserve plc and prior to that was Finance Director of St Modwen Properties. Earlier roles include Group Finance Director at Hagemeyer UK and senior positions in Williams Holdings. Tim is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of its Sustainability Board. He is also a member of the Enterprise Leadership Team of Business in the Community.

6. Robert Ware (60) (Non-executive Director) joined the group in February 2000. He was a director of MEPC Limited (“MEPC”) until June 2003. Initially Corporate Development Director, he was appointed Deputy Chief Executive in May 1999. In 2003 he left MEPC and listed The Conygar Investment Company PLC, an AIM-Listed company of which he is the Chief Executive. He is also Chairman of the Marwyn Value Investors Limited, Terra Catalyst Fund and Marwyn Management Partners Limited.

COMPANY SECRETARY7. Simon Smith (39) (Group Company Secretary and HeadofCorporateAffairs)wasappointedCompanySecretary of the Company on 3 November 2009. An Associate of the Institute of Chartered Secretaries and Administrators he has previously held company secretarial positions at PartyGaming plc, Associated British Foods plc, BG Group plc and KPMG.

1. 2. 3.

4. 5. 6.

7.

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GOVERNANCE – DIRECTORS’ REPORT

The Directors present the Directors’ Report and the audited financial statements for the year ended 31 December2014.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The Group operates as an integrated media group primarily engaged in exhibitions, but with associated conferences,publishing, education and internet activities. The principal activity of the Company is the holding of investments.

A review of the Group’s business model, strategy and prospects is set out in the Business Review on pages 4 to 35(which forms part of the Directors’ Report) and incorporates the Chairman’s and Group Managing Director’sStatement on pages 10 to 13 and the Financial Review on pages 14 to 15.

The board confirms that the annual report and accounts, taken as a whole, is fair, balanced and understandable andprovides the information necessary for shareholders to assess the performance, strategy and business model of theGroup.

RESULTS AND DIVIDENDS

The results for the year are set out in the Consolidated Income Statement on page 79. During the year the Groupmade a profit after tax of £6.8million (2013: £13.2 million).

Subject to the approval of shareholders at the Annual General Meeting, to be held on 22 June 2015, the Boardproposes to pay a final dividend of 5.4p per share (2013: 5.0p per share) on 8 July 2015 to shareholders on theregister as at 29 May 2015.

The Company has in place a Dividend Access Plan (“DAP”) and has engaged a trustee to receive dividends on behalfof shareholders who have elected for the trustee to do so under the rules of the DAP. This allows shareholders tochoose whether to receive their cash dividends from a UK source (from Tarsus Group Limited), as opposed to an Irishsource (i.e., the Company). As an alternative to the DAP, shareholders may choose to receive their dividends as a scripissue in new ordinary shares. The directors are empowered by ordinary resolution of the Company to offer this scripalternative pursuant to Article 138 of the Company’s Articles of Association, which authority expires at the end of theAnnual General Meeting held in 2017.

Full details of any scrip dividend alternative will be sent to shareholders, together with Forms of Election orStatements of Entitlement (as appropriate), in a separate circular in due course.

DIRECTORS

The following directors held office in respect of the Company throughout the year:

Appointed ResignedExecutive Directors

Neville Buch 3 October 2008 –Douglas Emslie 12 September 2008 –Dan O’Brien 4 July 2011 –Gary Marshall 31 March 2010 5 March 2014Hugh Scrimgeour 3 October 2008 31 January 2015

Independent Non-executive Directors

Robert Ware 3 October 2008 –Paul Keenan 19 December 2008 31 July 2014David Gilbertson 5 March 2014 –Tim Haywood 31 July 2014 –

The biographies of the directors in office when these financial statements were approved are shown on page 38.

Tarsus ARA 2014 Pages 39to78_JW1_Layout 1 01/04/2015 10:27

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SHARE CAPITAL

As at 31 December 2014, the Company had 101,200,318 ordinary shares in issue and admitted to the Official Listof the UK Listing Authority and to trading on the main market of the London Stock Exchange.

On 15 January 2015, the Company issued and allotted 35,835 ordinary shares to satisfy valid elections under theCompany’s scrip dividend alternative.

On 16 January 2015, the Company issued and allotted 27,082 ordinary shares in connection with exercises of optionsin respect of the Tarsus Group plc Company Share Option Plan 2008.

As at 4 March 2015, the Company had an authorised share capital of 120,000,002 ordinary shares of 5 pence each(£6,000,000.10), of which 101,263,235 ordinary shares are in issue and admitted to the Official List of the UK ListingAuthority and to trading on the main market of the London Stock Exchange. Each ordinary share carries the right toone vote and there are no shares held in treasury. The total number of voting rights in the Company as at 4 March2015 was therefore 101,263,235.

Details and explanations of the movement in the Company’s issued share capital during the financial year ended 31December 2014 are shown on page 107.

The Company announced on 8 March 2010 that it had agreed terms to acquire the remaining 20% interest in MCIOpco, LLC (“MCI”) that it did not already own from Dr Robert Goldman and Dr Ronald Klatz (the “Vendors”) for aconsideration of US$10.75m (the “Acquisition”). The Company issued 5,820,878 ordinary shares of 5 pence each(the “Consideration Shares”) to the Vendors under the terms of the Acquisition. In accordance with the terms of theAcquisition, the Company, Neville Buch, Douglas Emslie and the Vendors entered into a lock-in undertaking whichprovides that, subject to certain exceptions, neither of the Vendors will sell their interest in the Consideration Sharesunless either Neville Buch or Douglas Emslie (or both of them) have sold any of the ordinary shares held by them atthe date of the undertaking, whereupon each Vendor shall have the right to sell the same percentage of his holdingof Consideration Shares as is represented by the number of ordinary shares sold by Mr Buch or Mr Emslie to theaggregate holding of ordinary shares of Mr Buch and Mr Emslie. The Vendors are also permitted to sell theConsideration Shares in other limited circumstances, being: (i) to realise funds required to settle tax obligationsarising under the Acquisition or as a result of their receipt of additional ordinary shares as a result of their holdingof Consideration Shares (for example, as a result of a scrip dividend); (ii) following a change of control of the Companywhere Neville Buch and Douglas Emslie cease to be members of the Board or executive level management; (iii) oneyear following the date when both Neville Buch and Douglas Emslie cease to be members of the Board or executivelevel management; (iv) by way of buy-back of ordinary shares by the Company to the extent that Neville Buch andDouglas Emslie participate in such buy-back; (v) to family members, trusts and controlled companies; or (vi) to accepta takeover offer. The lock-in undertaking will terminate upon the earlier of: (i) a change of control of the Company;(ii) the bankruptcy, insolvency, liquidation or dissolution of the Company; (iii) when either or both of Mr Buch or MrEmslie have sold more than 50% of the ordinary shares held by them at the date of the undertaking; or (iv) theConsideration Shares held by the Vendors collectively representing less than 50% of the Consideration Sharesallotted to them as consideration for the Acquisition.

At the Annual General Meeting of the Company held on 23 June 2014, the Company was given authority to makemarket purchases of up to 10,106,343 of its own ordinary shares. The Company did not make any purchasespursuant to this authority prior to 31 December 2014. Accordingly, as at 31 December 2014, such authority remainedin force in relation to 10,106,343 ordinary shares in the capital of the Company.

At the Annual General Meeting of the Company held on 23 June 2014, the directors were generally andunconditionally authorised to exercise all or any powers of the Company to allot equity securities (as defined insection 560 of the UK Companies Act 2006, as if the Company were incorporated in England) to such persons, at suchtimes and on such terms as they think proper, up to a maximum nominal amount of £1,682,706.15 during the periodfrom 23 June 2014 until the earlier of 23 September 2015 or the conclusion of the Annual General Meeting of theCompany held to approve the report and accounts of the Company for the financial year of the Company ending on31 December 2014.


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DIVIDEND WAIVER AND NON VOTING SHARES

As at 4 March 2015, of the ordinary shares in issue, 523,541 were held in employee benefit trusts in relation toawards made under the Group’s Share Plans. The trustee of the employee benefit trusts has waived all dividendand voting rights in respect of these shares. This waiver only subsists while the shares are held by the employeebenefit trusts.

SUBSTANTIAL SHAREHOLDINGS

As at 4 March 2015, the Company had been notified and/or was aware of the following notifiable holdings of votingrights in accordance with Chapter 5 of the Financial Conduct Authority’s Disclosure Rules and Transparency Rules:

Percentage of capital and voting rights Number of

at 4 March 2015 Ordinary Shares

Hargreave Hale 9.38 9,494,147AXA Framlington Investment Management 8.85 8,957,713Neville Buch 8.78 8,891,251Rathbones 6.90 6,982,623Artemis Investment Management 5.46 5,528,908Philip O’Donnell 5.39 5,458,778JO Hambro Capital Management 5.36 5,425,924Blackrock 4.11 4,160,879Investec Asset Management 3.33 3,369,023Standard Life Investments 3.32 3,365,583Dr Robert Goldman 3.19 3,233,355Dr Ronald Klatz 3.19 3,233,355

DIRECTORS’ SHARE INTERESTS

The interests of the directors in the Company’s ordinary shares (in respect of which transactions are notifiable underthe Financial Conduct Authority’s Disclosure Rules and Transparency Rules 3.1.2R) as at 1 January 2014 and 31December 2014 are set out below:

Number of ordinary shares Number of ordinary sharesat 1 January 2014 at 31 December 2014

Neville Buch 8,867,046 8,891,251Douglas Emslie 906,303 1,022,396Dan O’Brien 8,000 67,436Hugh Scrimgeour 58,121 58,121Robert Ware 284,215 301,585David Gilbertson* - 10,000Tim Haywood* - -

*opening balance shown as at date of appointment

DONATIONS

During the year the Company made charitable donations of £24,069 (2013: £21,652). No political donations weremade (2013: £nil).


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EMPLOYEES

Good communication with employees is regarded as an essential feature of the Group’s business culture. Employeesreceive regular updates on corporate performance and developments through various formal and informal channelsof communication, including the Group’s website and internal intranet. The Group is committed to cultivating anenvironment in which all staff feel empowered to make suggestions and provide feedback on the Company, itsperformance and working conditions.

Employees are encouraged to become shareholders in the Company and a significant number participate in theGroup’s share plans, details of which are set out in the Remuneration Committee Report on pages 54 to 71.

The Board believes there are many benefits to having a diverse workforce and we remain committed to ensuring thatthis continues to be reflected in our recruitment policies. Applications for employment by disabled persons arealways fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staffbecoming disabled, every effort is made to ensure that their employment with the Group continues and thatappropriate training is arranged. It is the policy of the Group that the training, career development and promotionof disabled persons should, as far as practicable, be identical to that of other employees.

The Company seeks to employ a workforce which reflects the diverse community of our society irrespective of sex,age, marital status, disability, sexual preference or orientation, race, colour, religion, ethnic or national origin. TheCompany believes that all employees should be treated with dignity and respect and the Company endeavours toprovide a working environment free from discrimination, victimisation or harassment.

The Group tries to assist its employees to achieve an appropriate work/life balance, by measures including policieson parental, maternity and paternity leave and flexible working, where appropriate.

CREDITOR PAYMENT POLICY

It is not the Company’s policy to follow any standard or code on payment practice. However, the Company agreespayment terms with its suppliers on an individual basis and abides by those payment terms. Company creditor daysat the end of the year amounted to 23 (2013: 51). The Group creditor days at the end of the year amounted to 65(2013: 46).

GOING CONCERN

A full description of the Group’s business activities, financial position, cash flows, liquidity position, committed facilitiesand borrowing position, together with the factors likely to affect its future development and performance, is set outin the Business Review, Financial Review and in the notes to the accounts.

Having reviewed the Company’s and the Group’s liquid resources, borrowing facilities and operating budgets andcash flow forecasts, the directors believe that the Company and the Group have adequate resources to continue asa going concern for the foreseeable future.

ANNUAL GENERAL MEETING

The Notice convening the Annual General Meeting, to be held at 11.00am on 22 June 2015 at The Writers Room,Radisson Blu Hotel, Dublin Airport, Dublin 2, Ireland, is contained in a separate circular that will be sent out nearerto the meeting. That circular will also detail the resolutions to be proposed at the Annual General Meeting.

AUDITORS NON-AUDIT FEES

Deloitte LLP are the Company’s auditors effective since 24 June 2013. Deloitte LLP performed non-audit servicesduring the year ended 31 December 2014. Their fees for this work were £147,000.

It is the Group’s policy to separate tax advice from audit work (which is governed by different terms) and not to awardnon-audit work to the auditors if this were thought likely to compromise their objectivity and independence.


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DISCLOSURE OF INFORMATION TO AUDITORS

The directors who held office at the date of approval of this Directors’ Report confirm that, as far as each of them isaware, there is no relevant information of which the Company’s auditors are unaware; and each director has takenall the steps that he ought to have taken as a director to make himself aware of any relevant audit information andto establish that the Company’s auditors are aware of that information.

AUDITORS

Deloitte LLP have indicated their willingness to continue in office, and a resolution proposing that they be reappointedwill be proposed at the Annual General Meeting.

RELATED PARTY TRANSACTIONS AND POST BALANCE SHEET EVENTS

On 6 January 2014 the Company agreed to sell up to 18% of its French business to Romuald Gadrat, the incumbentManaging Director of the division and a related party, for €1.5m in cash.

There are no post balance sheet events that require disclosure by the Company.

By order of the BoardSimon SmithCompany Secretary4 March 2015


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GOVERNANCE – CORPORATE GOVERNANCE REPORT

UK CORPORATE GOVERNANCE CODE COMPLIANCE

With the exception of the relevant provisions in the Companies ( Jersey) Law 1991, Jersey does not have a system ofcorporate governance equivalent to that found in the UK. The Company, however, voluntarily complies with thecorporate governance requirements set out in the Financial Conduct Authority’s Disclosure Rules and TransparencyRules and complies with the UK Corporate Governance Code published in September 2012 by the FinancialReporting Council (the ‘Code’) which is publicly available at www.frc.org.uk.

Throughout the year to 31 December 2014, the Company has complied with all the Code’s principles. The explanationof how the main principles have been applied is set out below and in the Board Committee Reports on pages 48 to 71.

BOARD OF DIRECTORS

The Board currently comprises three Executive Directors (including the Chairman) and three independent Non-executive Directors. In accordance with corporate governance best practice, the Board has resolved that all directorsof the Company will retire and offer themselves for re-election at the 2015 Annual General Meeting. A circulardetailing the resolutions to be proposed at the Annual General Meeting will be sent to shareholders in due course.

In accordance with the Code, the Company is headed by an effective Board, which is collectively responsible for thesuccess of the Company. The Board provides strong leadership whilst ensuring that a framework of prudent andeffective controls exists in order to assess and manage risk. The Board has adopted a formal schedule of mattersreserved to the Board, setting out those issues which must be referred to the Board for decision. The principalresponsibilities of the Board are to direct and approve the Company’s strategy, manage its portfolio of investmentsand manage its relationship with the investment community and other stakeholders.

The Chairman, who holds 8.78% (2013: 8.78%) of the Company’s current issued share capital, is responsible formanagement of the Board, for strategy (in conjunction with the Group Managing Director and the Board), for externalrelations and for communication.

The Group Managing Director is responsible for the day-to-day running of the business. He also chairs an ExecutiveManagement Committee comprising the senior executives that exercise managerial responsibility across the Group.This body is primarily concerned with operational issues, and reports to the Board via the Group Managing Director.

The different roles of the Chairman and the Group Managing Director are defined and a responsibility statement inrespect of their roles has been agreed and adopted by the Board.

The terms and conditions of appointment of the Non-executive Directors are available for inspection at the registeredoffice of the Company during normal business hours and will be available at the Annual General Meeting on 22 June2015 from 10.30am until the conclusion of the meeting.

In accordance with the Code, the Company has taken out directors’ and officers’ liability insurance in respect of anypotential legal action against the directors.

INDEPENDENT NON-EXECUTIVE DIRECTORS

The Board considers Robert Ware, David Gilbertson and Tim Haywood to be independent Non-executive Directors.The Board views each of these Non-executive Directors to be independent of management, independent injudgement and character and free from any business or other relationship which could materially interfere with theexercise of their independent judgement. Hugh Scrimgeour resigned from his role of Senior Independent Directoron 5 March 2014 to become an Executive Director of the Group and Executive Chairman of Tarsus China, he retiredas a director on 31 January 2015.

David Gilbertson joined the Board of Directors of the company on 5 March 2014 and was appointed the SeniorIndependent director for the remainder of the year ending 31 December 2014. He is also the Chairman of theRemuneration Committee and a member of the Nomination, Audit and Disclosure Committees.

Paul Keenan resigned from the board on 31 July 2014. Tim Haywood replaced him as a director of the company on31 July 2014 and is the Chairman of the Audit Committee and a member of the Remuneration, Nomination andDisclosure Committees.


Tarsus Group plc 45


The Board, when making its determination on the independence of Robert Ware, gave particular consideration tothe fact that he has been serving as Director of Group companies for at least nine years (including the time he servedon the board of Tarsus Group Limited prior to the Group’s redomiciliation to Ireland). The Code suggests that lengthof service of nine years or more is relevant to a determination of independence and that re-appointment should besubject to rigorous review. The Board concluded that Robert Ware remains independent in judgement and character,his commitment to the Company is undiminished and his performance continues to be effective.

The Board takes the view that the public company experience and independence of the Non-executive Directors issuch as to counterbalance any perceived concerns arising from the substantial shareholding of the Chairman. TheBoard has consulted the Company’s major shareholders through the Company’s advisers and has established thatthey regard the size of that shareholding as a strength of the Company rather than a matter for concern.

COMPANY SECRETARY

All directors have access to the advice and services of the Company Secretary, who is responsible for ensuring thatBoard procedures are observed and that the directors receive advice as to their duties as directors. The appointmentand removal of the Company Secretary is a matter for the Board as a whole. The Company Secretary is Simon Smith,who was appointed on 3 November 2009. Ogier Corporate Services ( Jersey) Limited is appointed to act as AssistantCompany Secretary. A formal procedure exists whereby any director, in furtherance of his duties, may takeindependent professional legal advice at the Company’s expense.

The interests of the directors in the Company’s share plans are set out in the Remuneration Committee Report onpages 67 to 69.

COMMITTEES OF THE BOARD

There are a number of standing Committees of the Board to which various matters are delegated. They all haveformal terms of reference approved by the Board which are available on the Group’s website (www.tarsus.com). Thereports of the Committees are set out on pages 48 to 71.

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS IN 2014

The Board meets not less than five times a year in Ireland. Details of the number of meetings and attendance recordsare set out in the table below. The Chairman has also met with the Non-executive Directors without the otherExecutive Directors present. Led by the Senior Independent Director, the Non-executive Directors have met withoutthe Chairman present.

Board Audit Remuneration Nomination Committee Committee Committee

Neville Buch 5/5 – – 3/3Douglas Emslie 5/5 – – –Dan O’Brien 5/5 – – –Gary Marshall* 1/1 – – –Hugh Scrimgeour* 4/5 1/1 1/1 1/1Robert Ware 5/5 4/4 3/3 3/3Paul Keenan* 3/3 3/3 2/2 2/2David Gilbertson* 4/4 3/3 2/2 2/2Tim Haywood* 2/2 1/1 1/1 1/1

*Gary Marshall, Paul Keenan and Hugh Scrimgeour resigned as directors on 5 March 2014, 31 July 2014 and 31January 2015 respectively. David Gilbertson and Tim Haywood were appointed on 5 March 2014 and 31 Julyrespectively. The meeting attendance shown reflects only those meetings held during the respective directors’appointment on the Board.


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BOARD EVALUATION

The directors have undertaken a formal and rigorous evaluation of their performance for the year ended 31December 2014. During 2014 the Company Secretary circulated a questionnaire to each director that sought viewson various issues concerning the operation and effectiveness of the Board and each of the Board Committees, theeffectiveness of the Chairman, the Executive Directors and the Non-executive Directors. The evaluation sought toconsider the balance of skills, diversity, experience, independence and knowledge of the directors and explored howthe Board works as a unit. The results have been reviewed by the Board, led by the Chairman and discussed withindividual directors, except that the performance of the Chairman was reviewed by the Non-executive Directors, ledby the Senior Independent Director.

TRAINING AND DEVELOPMENT

An induction programme is arranged for newly appointed directors which include papers and meetings on thebusiness, current strategy and shareholder expectations. Guidance is also given on the duties, responsibilities andliabilities of a director of a listed company and key Board policies and procedures.

Directors have access to training as required and are encouraged to continue their own professional developmentthrough attendance at seminars and briefings.

RELATIONS WITH SHAREHOLDERS

The Company regards it as normal to engage in a regular dialogue with its shareholders. The Chairman, the GroupManaging Director and the Group Finance Director have a full programme of meetings and consultations with theCompany’s major shareholders, both private and institutional, in which they regularly discuss strategy andgovernance, including issues of remuneration. In turn, the Chairman ensures that the views of the major shareholdersare communicated to the whole Board. In the course of the year the majority of major shareholders were visited andconsulted.

Robert Ware has in past years attended meetings with investor groups and analysts. All the Non-executive Directorscould, if they wished, attend other meetings with major shareholders, and would do so if specifically requested bysuch shareholders. At present, the Non-executive Directors do not generally attend meetings with the Company’smajor shareholders. Where appropriate, major shareholders are offered the opportunity to meet any new Non-executive Director. The Senior Independent Director is available to shareholders if they have concerns for whichcontact through the Chairman or Group Managing Director is inappropriate.

The Company increasingly regards its websites as an important communication tool with shareholders as well as thewider public.

RESTRICTIONS ON THE TRANSFER OF SHARES

There are no restrictions on the transfer of the ordinary shares, except where a holder refuses to comply with anotice requesting details of parties who have a beneficial interest in a particular holding of shares, and the extent oftheir interest. In such cases, where the identified shares make up 0.25% or more of the ordinary shares in issue, thedirectors may refuse to register a transfer of any of the identified shares in certificated form and, so far as permittedby the Uncertificated Securities Regulations 2001, a transfer of any of the identified shares which are held in CREST,unless the directors are satisfied that they have been sold outright to an independent third party.

So far as the directors are aware, other than those disclosed in relation to the MCI Acquisition (on page 40 of thisreport), there were no arrangements at 31 December 2014 by which, with the Company’s co-operation, financialrights carried by securities are held by a person other than a holder of securities, nor any arrangements betweenholders of securities which are known to the Company and which may result in restrictions on the transfer ofsecurities or on voting rights.


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TAKEOVERS

The Group’s external bank facilities become repayable in the event of a takeover.

Other than noted above, there are no significant arrangements to which the Company is party that take effect, alteror terminate upon a change of control of the Company following a takeover bid, nor any agreements between theCompany and its directors or employees providing for compensation for loss of office or employment (whetherthrough resignation, purported redundancy or otherwise) that occurs because of a takeover bid.

CORPORATE SOCIAL RESPONSIBILITY

The Group is strongly committed to its customers, employees and shareholders, and, in a wider context, to societyat large. The Board recognises that significant changes need to be made to the way we live and work to ensure thatour society and environment remain fully sustainable. Increasingly, companies must go beyond merely meetingminimum legal requirements to consider the wider impacts of their businesses. To this end the Group hasestablished a Corporate Social Responsibility Committee, further information about which can be found on pages36 to 37.

ANTI-CORRUPTION POLICY AND WHISTLEBLOWING

As part of Tarsus’ commitment to preventing bribery and establishing a culture that does not tolerate corruptionwherever and in whatever form it may be encountered, a formal anti-bribery and corruption policy and awhistleblowing policy has been approved by the Board and appropriate procedures put in place.


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GOVERNANCE – NOMINATION COMMITTEE REPORT

The Nomination Committee meets as required to deal with the recruitment of directors to the Board and to assessdirectors’ roles and succession planning. The Committee comprises Neville Buch (Chairman), Robert Ware, DavidGilbertson and Tim Haywood. The Group Company Secretary acts as Secretary to the Committee.

The Nomination Committee evaluates the balance of skills, knowledge and experience on the Board and preparesa description of the role and capabilities required for any particular appointment. It also reviews from time to timesuccession plans for the key executive positions within the Group, including the arrangements which would apply incases of emergency. An independent Non-executive Director would chair the Nomination Committee if it were dealingwith the appointment of a successor to the Chairman.

The Committee met three times during the year. Its activities during the year included:

– reviewing the succession planning for Executive Officers; – reviewing the role of Gary Marshall and advising the Board in relation to his resignation as director of the Company

in order to continue to serve the Group in a commercial role;– reviewing the role of Hugh Scrimgeour and advising the Board in relation to his appointment as an Executive

Director of the Company during the year;– considering the appointments of David Gilbertson and Tim Haywood as Non-executive Directors and advising the

Board in relation to their appointments and respective roles;– reviewing the balance of the Board and the roles of the Non-executive Directors; and– reviewing the balance of skills and experience on the Board and considering if any changes were necessary.

Neville BuchChairman of the Nomination Committee4 March 2015


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GOVERNANCE – AUDIT COMMITTEE REPORT

AUDIT COMMITTEE REPORT

The Audit Committee comprises the three independent Non-executive Directors (Tim Haywood (Chairman), RobertWare and David Gilbertson). On 5 March 2014 Hugh Scrimgeour resigned as a member of the Committee and wasreplaced by David Gilbertson. On 31 July 2014 Paul Keenan resigned as Chairman and as a member of the Committeeand was replaced by Tim Haywood. The Board considers that Tim Haywood has the appropriate financial expertise,as required by the Code defined earlier.

Under the Code, the Board is required to establish formal and transparent arrangements for considering how itshould apply the required financial reporting and internal control principles and for maintaining an appropriaterelationship with the Company’s auditors, Deloitte LLP (“the Auditor”). The Finance Director generally attendsmeetings of the Audit Committee, although the Committee also meets in his absence where appropriate. The Auditoralso attends when appropriate.

The Chairman of the Audit Committee will attend the Annual General Meeting of the Company on 22 June 2015 andbe available to answer any shareholders’ questions.

KEY RESPONSIBILITIES

• Monitoring the integrity of the annual and interim financial statements, reports to shareholders and corporategovernance statements.

• Making recommendations to the Board regarding the annual and interim financial statements.

• Making recommendations to the Board on the appointment, retention and replacement of the Company’sexternal auditors and assess the effectiveness of the Auditor.

• Reviewing financial risks and monitoring the effectiveness of the Group’s internal controls.

• Approving the internal and external audit plans.

• Approval of the Auditor’s fees.

Following publication of the revised version of the Code, which applies to financial years commencing on or after 1October 2012, the Board requested that the Committee advise whether it believes the Annual Report and FinancialStatements, taken as a whole, is fair, balanced and understandable and provides the information necessary forshareholders to assess the Company’s performance, business model and strategy. In accordance with the Code theCommittee provided the necessary advice to the Board.

KEY ACTIVITIES DURING THE PERIOD

• The Committee reviewed the financial statements released by the Company, including the annual and interimfinancial statements.

• The Committee reviewed the financial trading updates, risks and financial controls, including the key internalcontrols checklist report prepared by internal audit and considered actions arising and mitigating steps.

• The Committee reviewed actions against the assurance plan and monitored management actions recommended.Additionally, the Committee approved the plan for the forthcoming year.

• The Auditors, as part of its assurance process, confirmed that they are considered to be independent andobjective. The Committee agreed with this assessment and no matters of concern were raised. During the yearended 31 December 2014, the Auditor presented its plans for the interim review and the year-end audit and theCommittee approved the scope of work to be undertaken.

• During the course of the year, the Committee met with the External Auditor without the presence of management.

• Reviewed, prior to their consideration by the Board, the representation letters to be given to the external auditorsin respect of the annual and half-year reports.


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• Reviewed audit effectiveness following the audit of the 2013 annual report taking into account the partners’ andsenior audit staff’s understanding of the business, the effectiveness of the audit work in relation to major issuesand how those were addressed, the quality of suggested control improvements, the appropriateness of assurancegained over parts of the Group not audited by the Auditor, the appropriateness and deployment of experts ontechnical items, the quality and comprehensibility of the audit findings report and feedback from managementon the audit process generally.

• Received notification of any whistleblowing notifications and the progress and outcome in respect of these.

• Reviewed its terms of reference and whether any changes needed to be proposed to the Board.

• Conducted an evaluation exercise to review its own effectiveness.

• Approval of the Auditor’s fees.

GOVERNANCE

• The Committee confirmed that it had complied with its terms of reference throughout the year.

• The Committee reviewed its membership and confirmed that it complied with the Code.

• The Committee confirmed that, in accordance with the provisions of the Code, Tim Haywood had recent andrelevant financial experience.

2015 ACTIVITIES

The key activities for the forthcoming financial year are:

• continue the progress made to date around internal controls, assessment and internal audit follow up plans;

• continue to ensure that accounting developments are communicated to, and applied by, the Committee in linewith best practice; and

• assess the External Auditor’s effectiveness, which will be achieved by the Committee based on discussions withthose involved in the process.

AUDITOR’S INDEPENDENCE, OBJECTIVITY AND NON-AUDIT SERVICES

The Company’s policy on the Auditor’s independence is consistent with the ethical standards issued by the AuditPractices Board in the UK. The Committee reviews independence on a regular basis.

This is designed to ensure that:

• the Auditor does not act as a manager or employee of the Group;

• there is separation between the interests of the Auditor and the Group; and

• the Auditor is not required to act as an advocate for the Group.

The independence review is conducted by a review of compliance with policies in place in the Group and within theAuditor to maintain independence and objectivity. The findings are shared with the Committee. The Committee,having reviewed the report prepared by the Auditor on its relationships with the Group and the review bymanagement, is satisfied that the Auditor’s objectivity has not been impaired.

The Auditor is required to assess periodically that it, in its professional judgement, considers itself to be independent.In particular, the Committee requires that details in respect of audit and non-audit services are provided to it toensure that the Group’s policy on the provision of non-audit services by the Auditor has been followed. The definitionof non-audit services adopted by the Committee complies with the ethical standards issued by the Audit PracticesBoard in the UK. The Committee, having reviewed the activities during the reporting period, is satisfied that the policyremains appropriate, has been complied with and that the Auditor remains independent. Details in respect of thenon-audit fees paid are in note 4 on page 94.


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The Committee has primary responsibility for making recommendations to the Board on the independence andreappointment of the Auditor.

The Auditor is required to adhere to audit partner rotation requirements, with the next review of the current auditpartner being due no later than the end of the 2020 audit process.

The Committee has satisfied itself that the UK professional and regulatory requirements for audit partner rotationhave been complied with. In light of the reviews undertaken and the satisfactory conclusions reached, the Committeehas recommended that Deloitte LLP be reappointed for a further year at the 2015 AGM.

SIGNIFICANT AND MATERIAL ISSUES

The Committee has considered a number of significant and material issues during the year, including:

• application of internal controls and how these were managed, trends and areas of potential financial risk. Whilstthe Committee does not consider there to be any material weaknesses in the internal controls process, itconsiders that its review of internal controls is a priority item ensuring that a high standard is maintained and thatimprovements are made incrementally as best practice evolves;

• the impact of changes to regulation on the Company and how any changes would be implemented andcommunicated. The Committee recognises that applicable regulations change and that there should be a processfor ensuring that these changes are monitored and appropriate practices adopted in a timely manner;

• Tarsus operates a global portfolio of events, exhibitions, publications, websites and conferences. The committeereviewed the revenue recognition policies and ensured they were appropriate for Tarsus operations. Thecommittee also reviewed controls undertaken to determine the completeness and accuracy of revenuerecognition and reporting for the portfolio. Revenue recognition was also covered in a paper by the Auditor andreviewed with them as part of the year end process.

• the carrying value of goodwill and other intangible assets on the balance sheet at the year-end was £127m whichincluded goodwill with a value of £103m. The Committee reviewed the management’s determination of cashgenerating units and the key assumptions used such as the discount rates and future cash flows in the light ofcurrent business performance and future projections and satisfied itself of the appropriateness of themanagement’s impairment testing.

• The Committee reviewed the opening net asset position in respect of acquisitions and examined the fair valueadjustments, how the acquisition expenses had been charged to the income statement and the value ofintangibles recognised on acquisition and satisfied itself that these were appropriate.

• as part of each venture into new territories the Committee is provided with a report on the processes andprocedures of the acquired entity, ensuring that key policies are adhered to, in particular the recognition ofrevenue. The Committee monitors the integration of the new ventures into the Group’s reporting structure; and

• being a multinational Group with tax affairs in many geographical locations makes the degree of estimation andjudgements more challenging. Any taxation issues that arise are dealt with on the advice of the Group’s taxadvisers, fully reviewed by the Committee.

The Committee has discussed with the Auditor the areas of significant risk identified by the Auditor (see pages 73to 78) and has satisfied itself that such risks are being appropriately managed.

The Committee is satisfied that all issues and significant risks have been managed appropriately and in accordancewith the relevant accounting standards and principles.

RISK MANAGEMENT AND INTERNAL CONTROLS

The Board has overall responsibility for the Group’s systems of internal control. However, such systems are designedto manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonableand not absolute assurance against material misstatement or loss.

The Code requires that the directors review the effectiveness of the Group’s system of internal controls. This coversall controls, including financial, operational and compliance controls as well as risk management. The considerationof issues of non-financial risk is now an important aspect of the Group’s activity.


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The risk management processes as required by the Turnbull Report were in place for the full year to 31 December2014 and up to the date of approval of this report. The implementation of the requirements of the Turnbull Reporttook the form of a continuing review of operational risks across the Group and prioritisation of those risks identifiedfor further action. This is carried out primarily at Executive Management Committee level and reported up to theBoard via the Group Managing Director.

The following are the main features of the internal financial control framework:

• Financial reporting – there is a comprehensive budgeting system with an annual budget approved by the Board.Monthly trading results, balance sheets and cash flow statements are reported against budget and updatedforecasts and are sent to the Executive Board. Sales reports are circulated to Executive Directors weekly and arepresented to the Board at each Board meeting.

• Treasury management – the Board has approved a formal treasury policy for the Group. A treasury report anda working capital report are presented at each board meeting. Weekly cash reports are sent to the Chairmanand the Group Managing Director.

• Risk management – there is an ongoing process for identifying and reviewing the principal risks affecting theGroup’s businesses and evaluating their financial implications. Steps are taken where possible to mitigate ormanage the risks identified. This is carried out primarily at Executive Board level in conjunction with operatingcompany management and is reported up to the main board via the Group Managing Director. Insurance is co-ordinated centrally.

• Central controls – formal delegated authorities are in place for all operating companies and a controlprocedures document was in place for the entirety of 2014. As part of the year end process, each division isrequired to confirm it is not aware of any breaches of the Group’s policies and procedures. This includesdeclarations covering the Group’s anti-bribery and corruption policy.

• Operating company systems – each operating company maintains financial controls and proceduresappropriate to its own business environment, whilst complying with overall Group standards and guidelines.

• Internal audit – the Committee is responsible for monitoring, reviewing and assessing the role and effectivenessof the internal audit reviews that are carried out. The Group Finance department carries out reviews of thesystems and procedures of all major operating companies and reports regularly to the Audit Committee and,where appropriate, the Board. The necessity for a separate internal audit function is considered on an annualbasis. In light of the reviews carried out by Group Finance and taking into account the size of the Group, noseparate internal audit function is currently considered necessary. The Committee received a summary of eachinternal audit review covering the findings, proposed corrective actions and management’s responsiveness tothose findings and recommendations.

There are no material joint ventures or associates which do not apply the Group’s internal control systems.

The Board, through the Audit Committee, has reviewed the effectiveness of the Group’s system of internal control.No significant failings were identified by the review.

KEY RISKS

The directors have identified below the principal risks and uncertainties relating to the Group’s business.

Tarsus’ events and exhibitions business may be adversely affected by incidents which curtail travel, suchas terrorist attacks, higher oil prices or health pandemics

Tarsus’ exhibitions businesses contribute in excess of 90% of the Group’s revenue. Visitors travel to these showsfrom around the world. Any incident that curtails travel, such as the 11 September 2001 terrorist attacks in the US,may have an impact on the running of the relevant event and may, therefore, affect reported revenues.

Expansion into new geographic regions subjects the Group to new operating risks

As a result of acquisitions and organic growth, the Group operates in many geographic regions such as China, India,the United Arab Emirates, Turkey, Indonesia and Latin America. Whilst the Group conducts its business on a globalscale, growth in these regions presents logistical and management challenges due to different business cultures, lawsand languages. This may result in incremental operational risks for the Group.


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The ability of the Company to implement and execute its strategic plans depends on its ability to attract and retain the key management personnel required

The Group operates in a number of industry segments in which there is intense competition for experienced andhighly qualified individuals. The Group cannot predict the future availability of suitably experienced and qualifiedpeople; it places significant emphasis on developing and retaining management talent. Accordingly, the Group hasimplemented, and will continue to implement, a number of incentive schemes to attract and motivate key seniormanagers. There can be no certainty that such retention policies and incentive plans will be successful in allowingthe Company to attract and retain the right calibre of key management personnel.

Fluctuations in exchange rates may affect the reported results

The Group is exposed to movements in foreign exchange rates against Sterling for trading transactions and thetranslation of the net assets and income statements of overseas operations. The principal exposure is to the USDollar and Euro exchange rates, which form the basis of pricing for the Group’s customers.

Venue availability

Damage to or unavailability of a particular venue could impact specific events within the Group’s portfolio.

There are inherent risks and uncertainties in connection with the Group’s acquisition strategy

The Group will seek and effect appropriate acquisitions across various geographic regions, consequently exposingthe Company to inherent risks and uncertainties associated with such acquisitions. The risks associated with sucha strategy include the availability of suitable acquisitions, obtaining regulatory approval for any acquisition andassimilating and integrating acquired companies into the Group. In addition, potential difficulties inherent in mergersand acquisitions may adversely affect the results of an acquisition. These include delays in implementation orunexpected costs or liabilities, as well as the risk of failing to realise operating benefits or synergies from completedtransactions. In addition, there be no certainty that the benefits of acquisitions and strategic investments, includingsynergies, increased cash flows and other operational benefits, will be realised.

Breaches of the Group’s data security systems or other unauthorised access to its databases, intellectual property or information could adversely affect its businesses and operations

The Group has valuable databases and intellectual property and, as part of its businesses, provides its customerswith access to database information such as treatises, journals and publications as well as other data. There arepersons who may try to breach the Group’s data security systems or gain other unauthorised access to its databasesin order to misappropriate such information for potentially fraudulent purposes. Due to the rapid change in thenature of these threats to the Group’s databases, intellectual property and other information, the Group may beunable to anticipate or protect against the threat of breaches of data security or other unauthorised access. Suchbreaches could damage the Group’s reputation and expose it to a risk of loss or litigation and possible liability, aswell as increase the likelihood of more extensive governmental regulation of these activities in a way that couldadversely affect this aspect of the Group’s business. Legal actions against the Group could have a material adverseeffect on the Group’s business, financial condition and results of operations.

Tim HaywoodChairman of the Audit Committee4 March 2015


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GOVERNANCE – REMUNERATION COMMITTEE REPORT

I am pleased to present the Directors Remuneration Report for the year ended 31 December 2014, which has beenprepared by the Remuneration Committee (the “Committee”) and approved by the Board of Directors.

The Committee believes it is essential that the Group’s remuneration policy is clearly aligned with the interests ofshareholders. The Committee’s focus is on continuing to ensure that the Group’s remuneration policy andcomponents of reward are appropriately positioned in the market to enable it to attract, retain and motivate theexecutive talent required for delivery of its business strategy.

The Group delivered a strong set of results in 2014 with Group like-for-like revenue up 10% on a constant currencybasis and made significant strategic progress in line with its “Quickening the Pace” strategy. Group revenues for thefull year were £60.6m (2013: £75.9m), up 18% on a biennial basis (2012: £51.5m). Group adjusted profit before taxwas £17.0m (2013: £24.2m), up 15% on a biennial basis (2012: £14.8m).

As a Jersey registered company, the Company is not subject to UK legislation. However, in light of the Company’slisting on the London Stock Exchange, the Remuneration Committee reviewed its remuneration practices andreporting in light of the UK Government’s new remuneration reporting reforms contained in the Enterprise andRegulatory Reform Act 2013, which amend the Companies Act 2006 and the Large and Medium-sized Companiesand Groups (Accounts and Reports) (Amendment) Regulations 2013. This is the second year the Company isvoluntarily reporting in line with the aforementioned legislation.

The report is separated into two sections:

• The first is the Policy Report which was approved by shareholders at the Annual General Meeting on 23 June2014 and which outlines the Group’s remuneration policy applying from 1 January 2015 for Executive Directors.Whilst the policy is unchanged, for clarity the charts have been updated illustrating the application of theremuneration policy to reflect the latest salaries; and

• the second (pages 63 to 71) sets out the directors’ remuneration during 2014 and how the policy wasimplemented in 2014. It also summarises how the certain aspects of the policy will be implemented in 2015 (theAnnual Report on Remuneration).

This reporting format ensures that the components of reward, how they are linked to the business strategy andreward opportunities, are clearly set out for each of the Executive Directors.

A resolution to approve the Annual Report on Remuneration (subject to an advisory vote) will be put to shareholdersat the 2015 Annual General Meeting.

David Gilbertson Chairman of the Remuneration Committee4 March 2015


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REMUNERATION POLICY REPORT

The Group operates a formal and transparent procedure for developing policy on executive remuneration and forfixing the total remuneration packages of individual Executive Directors. In establishing its remuneration policy, theCommittee gives full consideration to the provisions set out in the Code already defined.

The objectives of the Committee in respect of the remuneration of the Executive Directors is to:

• recruit, retain and motivate Executive Directors and senior executives of the highest calibre;

• ensure that performance-related elements of remuneration constitute a significant proportion of an ExecutiveDirector’s remuneration package; and

• ensure that individual rewards and incentives are aligned with the performance of the Company and the interestsof shareholders.

Remuneration levels are designed so that no more is paid than is necessary to achieve the above objectives. TheCommittee endeavours to remain sensitive to the wider scene, judging where to position the Group relative to othercompanies (though using such comparisons with caution) and considering pay and conditions throughout the Group.

As regards the design of performance-related remuneration the Committee gives attention to the provisions inSchedule A to the Code (“The design of performance-related remuneration for Executive Directors”). It is an importantpart of the Group’s pay policy, both at senior level and below, that a significant proportion of the overall remunerationpackage should be performance-related, comprising bonuses and meaningful long term share incentive or optionpackages.

There is a formal system for the appraisal of the Executive Directors. The Non-executive Directors, led by the SeniorIndependent Director, are responsible for evaluating the performance of the Chairman, taking into account theExecutive Directors’ views.

The terms of reference of the Remuneration Committee are available on the Group’s website at www.tarsus.com oron request from the Company Secretary at the Company’s registered office.

This section provides the Group’s remuneration policy for Directors, and was approved at the 2014 Annual GeneralMeeting of the Company. The policy applied from 1 January 2015 and no changes are proposed to the policy this year.

Base salary

Purpose and link to To provide core reward for the role.business strategy

Operation Base salaries are normally reviewed on an annual basis or following a significant changein responsibilities. They are paid monthly.

Performance metrics Salary levels and increases are determined based on a number of factors, including butnot limited to individual and business performance, level of experience, scope ofresponsibility and peer group company analysis.

Opportunity There is no maximum level. Base salary increases will be applied in line with the outcomeof an annual review by the Committee.

Benefits

Purpose and link to To aid recruitment and retention of high-quality executives.business strategy


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Operation Benefits may include:

Death in service payment Family healthcarePermanent health insuranceTravel insuranceCompany car allowanceTechnology to effectively carry out their duties

In the event a new Executive Director were to relocate from another country, additionalsupport may be provided, as set out in the recruitment and promotion arrangements onpages 58 to 59.

Performance metrics Not applicable

Opportunity Benefit values vary by role and are reviewed periodically.

Performance Bonus

Purpose and link to business strategy To incentivise individual performance over a 12-month period based on a

balanced scorecard performance agreement as set out below.

Operation Performance measures are based on a mix of financial profit targets and personal goalsand strategic objectives.

Performance metrics Performance measures for each of the Executive Directors are set out below:

Chairman, Group Managing Director and Group Finance Director:

50% of bonus potential – Group adjusted earnings per share50% of bonus potential – personal goals and strategic targets

Threshold bonus opportunity is 0% and target bonus opportunity is 50% of maximum.

Operational Executive Directors:

40% of bonus potential – Group adjusted earnings per share60% of bonus potential – personal goals and strategic targets

Threshold bonus opportunity is 0% and target bonus opportunity is 40% of maximum.

The Committee may vary the above weightings by an absolute +/–20% from year to yearfor all Executive Directors.

The performance targets for these measures are set each year by the Committee inrespect of each Executive Director.

The payment of any bonus to any Executive Director is also subject to an overriding achievement of an adjusted earnings per share target, whereby under this level no bonuswould be paid irrespective of whether personal goals and strategic targets are met.

The performance metrics have been chosen to ensure they align directors’ interests withthose of shareholders.

Opportunity Maximum bonus potential is capped at:

110% of salary for the Group Managing Director100% of salary for the other Executive Directors


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An explanation of Bonus opportunity for the year ending 31 December 2014 is set out inthe Annual Report On Remuneration on page 66.

Tarsus Group plc 2011 Long Term Incentive Plan (the “2011 LTIP”)

Purpose and link tobusiness strategy To incentivise delivery of sustained performance by Executive Directors strategy over the

longer term.

Operation Awards may be made annually as a percentage of base salary. Vesting is based onperformance measured over three years. The performance period normally starts on thebeginning of the financial year in which the grant is made.

Award levels and performance conditions are reviewed before each award cycle to ensurethey remain appropriate.

Performance metrics Dependent on adjusted EPS assessed over rolling three-year performance periodsbeginning with the year of grant. The performance criteria are based on an adjusted EPSrange whereby below a target level the award would lapse. The Committee, when settingthe performance criteria, takes account of the biennial nature of the Group’s business.On-target performance would typically lead to a 40% vesting of the award.

Opportunity Awards under the plan are capped at 200% of base salary each year.

The minimum award to Executive Directors is 0%.

The on-target awards are:

Executive Chairman – 100%Group Managing Director – 150%Group Finance Director – 125% Other Executive Directors and Officers – 100%

Savings Related Share Option Plan (the “SAYE Plan”)

Purpose and link to business strategy To encourage employees to make a long-term investment in the Company’s

shares

Operation All employees in the UK, including the Executive Directors resident in the UK, are eligibleto participate in the Company’s Save As You Earn (‘SAYE’) scheme which is approved byHMRC and subject to the limits prescribed.

Performance metrics Not applicable.

Opportunity Participants may currently invest up to £250 per month for a three year period in orderto purchase shares at the end of the contractual period at a discount of 20% to the marketprice of the shares at the commencement of the saving period. The Committee may varythis level in line with HMRC limits.

Non-executive Directors’ fees

Purpose and link tobusiness strategy To attract and retain suitable Non-executive Directors by ensuring that fees are

competitive.

Operation Paid monthly and reviewed each year.


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Performance metrics Not applicable

Opportunity The Non-executive Directors’ fees are determined by reference to the individual timecommitment and relevant benchmark market data.

Pension

Purpose and link to To provide cost effective retirement benefits.business strategy

Operation Participation in defined contribution plan or cash allowance in lieu.

Performance metrics Not applicable.

Opportunity Up to 10% of base salary.

Recruitment and promotion arrangements

Purpose and link to To secure the appointment or promotion of high-calibre Executive Directors.business strategy

Salary Starting base salary will be based on a combination of market information, internalrelativities and individual experience. Thereafter salary progression will depend on thenormal review process. There would be no maximum level.

Variable pay for External appointments The Company may offer additional cash and/or share-based elements when it considers

these to be in the best interest of the Company. Such payments would take account of theremuneration relinquished when leaving a former employer and would reflect the nature,time horizons and performance requirements attaching to that remuneration.

Where existing incentive or other arrangements are being bought out, this will be donewherever possible by tying in any new arrangement to achievement against group targetsin either/both the annual performance bonus and long-term incentives.

Performance bonusIf appropriate, some level of bonus, particularly during the first year in post, may beguaranteed in order to encourage the executive to move. This underpinning may be usedas part of a buyout of existing arrangements. The maximum bonus would be limited to100% of annual salary per year.

Long-term incentivesAn award under the 2011 LTIP would normally be given, subject to the plan rules and inline with the 2011 LTIP policy provisions.

The maximum award under the 2011 LTIP would be limited to 200% of annual salary peryear.

The total maximum performance bonus (100%) and 2011 LTIP award (200%) to any newExecutive Director would be 300% in total of annual salary.

Variable pay for internal appointments Any variable pay elements awarded in respect of the prior role with the Group may be

allowed to pay out according to the terms of the plan, adjusted as relevant to take accountof the new appointment. In addition, any other ongoing remuneration obligations existingprior to appointment may continue.


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Relocation Where required, the Company will pay:• reasonable expenses relating to moving house; and• an allowance of up to 5% of base salary.And either• legal and estate agent fees and stamp duty for buying and/or selling a family home;

and/or selling a family home; and stamp duty for buying a new home near the base ofemployment;

or• ongoing rental costs for recruits whose family home remains overseas. In this case,

where possible, recruits will be expected to rent out their family home to offset theadditional cost. Benefits and Pension Benefits and pension entitlement would be offeredin line with the remuneration policy provisions in place at that time.

Travel Where an executive is recruited to work in a country other than where they were residentprior to being appointed the Company will pay for one business class return fare perannum each for the executive, his/her partner and dependent children in order tomaintain family or other links with his/her home country.

Non-executive Directors In cases of appointing a new Non-executive Director, the approach will be consistent withthe policy.

Note to policy tables in respect of current directors

In addition to the above elements of remuneration, any commitment made prior to, but due to be fulfilled after, theapproval and implementation of the remuneration policy detailed in this report will be honoured.

EXECUTIVE DIRECTORS’ POTENTIAL VALUES OF 2015 REMUNERATION PACKAGE

The graphs below provide estimates of the potential future reward opportunity for each of the Executive Directorsbased on their roles (effective 1 January 2015), as established by the Remuneration Policy.

Neville Buch (£’000)

0

200

400

600

800

1000

1200

MINIMUM ON TARGET MAXIMUM

£301

£622

£1,040

100% 48% 29%

24%29%

28%

42%

Fixed elements

Annual variable elements

Long-term variable element


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Notes1. Fixed elements include base salary and benefits.2. Annual variable element includes performance bonus only.3. Long-term incentive value is calculated by reference to base salary at the date of allocation, and excludes

subsequent share price movements. The awards assumed under the LTIP are in line with the awards madein 2014 for Executive Directors.

4. On-target performance assumes an annual performance bonus of 50% of salary for Neville Buch, DouglasEmslie and Dan O’Brien. On-target vesting of the long-term variable element assumes adjusted EPSperformance equivalent to a 40% vesting of awards under the 2011 LTIP. Maximum performance assumesthe award of 100% of the annual performance bonus and maximum vesting of the 2011 LTIP awards.

0

500

1000

1500

2000


£429

£981

£1,703

100% 44% 25%

22% 25%

34%

50%

Fixed elements



Douglas Emslie (£’000)

0

100

200

300

400

500

600

700

800


£269

£468

£800

100% 58% 34%

14% 16%28%

50%

Fixed elements



Dan O’Brien (£’000)


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DIRECTORS’ SERVICE CONTRACTS

All the existing service contracts of the Executive Directors are with Tarsus Group Limited and contain conventionalprovisions for summary termination for “cause” but are otherwise terminable on 12 months’ notice expiring at anytime.

Termination payments are limited to base salary and benefits during the notice period. If an Executive Director’scontract is terminated, the Remuneration Committee reserve the right to award a pro-rated annual bonus over theperiod to the date of cessation of employment, subject to performance.

The existing service contracts have been amended such that the remuneration payable thereunder is reduced to theextent of the director’s fees payable to them by the Company in accordance with their letters of appointment.

If any Executive Director wishes to accept a non-executive appointment elsewhere, this is discussed in advance withthe Board, including whether the director concerned should be entitled to retain any fees and payments fromsources outside the Group. At the date of this report, none of the Executive Directors serve as Non-executiveDirectors elsewhere or are entitled to remuneration in respect of directorships of other companies.

All the directors’ service contracts and the Non-executive Directors’ letters of appointment are available for inspectionat the registered office of the Company and will be available for inspection at the Annual General Meeting.

Provision for payment on loss of office

Other than change of control, the Executive Directors’ service contracts do not contain provisions for compensationin the event of early termination. When determining termination payments, the Committee takes into account avariety of factors, including individual and Company performance, the obligation of the director to mitigate his or herown loss (for example, by gaining new employment) and the director’s length of service. It is expected that any exitpayments made to executives would not exceed one year’s base salary and benefits which is consistent with theirnotice period of up to 12 months. If an Executive Director’s contract is terminated, they are eligible for a pro-ratedperformance bonus over the period to the date of cessation of employment, subject to performance.

The rules of the Company’s 2011 LTIP provide that, in the event of a change in control, awards made under the planwill automatically vest. Additionally, all the Company’s other share plans contain provisions relating to a change ofcontrol. In general, outstanding awards and options would normally vest and become exercisable on a change ofcontrol, to the extent that any performance conditions have been satisfied at that time. If the Committee considersit appropriate given the circumstances of the change of control, time pro-rating may also apply.

All the Company’s share plans provide that in the event an employee ceases employment prior to the vesting of anaward for an agreed reason (such as ill health, agreed retirement or redundancy), then, to the extent anyperformance metrics have been met at that time, the award would normally vest when employment ceases on a pro-rated basis to reflect the proportion of the vesting period during which the individual was employed.

Shareholding guidelines for Executive Directors

As at 4 March 2015, the directors held 10.16% of the issued share capital of the Company. A breakdown of theirholdings can be found on page 41. The Remuneration Committee has not deemed it necessary to formaliseshareholding guidelines for directors other than in relation to vesting awards under the 2011 LTIP, whereby allparticipants will be expected to hold, for a minimum of two years after vesting, at least 20% of the shares transferableafter any personal tax liability has been paid.

Consideration of shareholder views

The Company is committed to ongoing dialogue with shareholders and welcomes feedback on Executive Directors’remuneration. The Committee believes it has a responsible approach to Directors’ pay and that its policy isappropriate and fit for purpose.


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Other share plans

The Committee has in the past the made awards to Executive Directors under the Tarsus Group Long Term ShareAcquisition Plan 2008 and the Tarsus Group plc Company Share Option Plan 2008. The last awards to ExecutiveDirectors under these plans were in 2010 and going forward there is no intention to make any further awards toExecutive Directors. An explanation of existing awards under these plans is covered in the Annual Report onRemuneration (on pages 67 to 68).

Dilution

Not more than 10% of the issued ordinary share capital of the Company from time to time may be issued under allthe Company’s employee share plans in any 10 year rolling period. This limit does not include options or awardswhich have lapsed or been surrendered.

Non-executive Directors

The Remuneration Committee does not determine the fees payable to the Non-executive Directors, which areconsidered and approved, subject to the limits set out in the Articles of Association of the Company, by the entireBoard and are shown on page 65. They are designed to recognise the significant responsibilities and timecommitments of the Non-executive Directors and to attract individuals with the necessary experience and ability tomake an important contribution to the Group’s affairs. The fees, which are neither performance-related norpensionable, are comparable with those paid by other companies operating in the same sector as the Company. Non-executive Directors do not participate in any of the Company’s long term incentive plans.

Non-executives’ letters of appointment set out the expected time commitment, and the Non-executive Directorsundertake that they will have sufficient time to meet what is expected of them. The initial term of non-executiveletters of appointment is until the date falling 12 months after the date of the relevant letter of appointment. Theterm of the appointment may be renewed by mutual consent for further periods of 12 months. If the appointmentis terminated early (prior to an expiry date), the Non-executive Director is not entitled to compensation for loss ofoffice.

Any other significant commitments of actual or proposed Non-executive Directors are disclosed to the Board beforeappointment with a broad indication of the time involved. The Board is informed of any subsequent changes of Non-executive Directors’ other significant commitments. Any changes to the Chairman’s other significant commitmentsare also reported to the Board as they arise.

Committee discretion

The Committee operates under powers delegated to it by the Board. In addition, it complies with rules which haveeither been approved by shareholders (Long Term Incentive Plan) or by the Board (Annual Performance Bonus Plan).These rules provide the Committee with certain discretions which serve to ensure that the implementation of theremuneration policy is fair both to the individual director and to shareholders, taking the overall performance andposition of the Company into account. The Committee also has discretions to set components of remunerationwithin a range from time to time. The extent of such discretions are set out in the remuneration policy.

In addition, the Committee requires discretion to deal with genuinely exceptional or unforeseen circumstances. Thisform of discretion will only be applied in the best interests of the Company and is intended to provide for changedcircumstances or strategy that has not been provided for in the remuneration policy, when it would bedisproportionate to seek specific approval from a general meeting of shareholders.

The Remuneration Committee will not exercise discretion to reward failure and will report on any exercise ofdiscretion that changes the amount of remuneration paid in any year.

Consideration of conditions elsewhere in the Group

When reviewing and setting the Executive Director remuneration, the Committee takes into account the pay andemployment conditions of all employees of the Group. The Group has not carried out a formal employee consultationregarding Executive Directors’ remuneration.


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ANNUAL REPORT ON REMUNERATION

The following section of this report details the remuneration of the directors for the year ended 31 December 2014and how the company intends to implement the remuneration policy in 2015. An ordinary resolution to approve thisAnnual Report on Remuneration will be proposed at the Annual General Meeting of the Company to be held on 22June 2015.

The Remuneration Committee comprises three independent Non-executive Directors (David Gilbertson (Chairman),Robert Ware and Tim Haywood). On 5 March 2014, Hugh Scrimgeour resigned as Chairman and as a member of theCommittee and was replaced by David Gilbertson. On 31 July 2014 Paul Keenan resigned as a member of theCommittee and was replaced by Tim Haywood. The Chairman and Group Managing Director attend meetings of theRemuneration Committee by invitation except when their own remuneration is under discussion. The Secretary tothe Remuneration Committee is the Secretary of the Company and is responsible for collating papers andcoordinating advice. During 2014 no external advisers were engaged.

Key duties

The Committee’s key duties include:

• Setting, reviewing and recommending to the Board for approval the Group’s overall remuneration policy andstrategy;

• Setting, reviewing and approving individual remuneration arrangements for the Executive Directors, includingterms and conditions of employment and any policy changes;

• Briefings on the remuneration policy for employees of the Group; and

• Approving the rules and design of any Group share based incentive plans, and the granting of awards under anysuch plans.

Remuneration Committee Agenda 2014

• Approval of the Group’s remuneration policy for Executive Directors.

• Approval of Annual Performance Bonus targets for 2014.

• Approval of awards to Executive Directors under the 2011 Long Term Incentive Plan.

• Review of Executive Directors’ and Officers’ salaries.

• Confirmation of the vesting of awards under the Company’s share plans vesting in 2014.

• Approval of the 2013 Annual report on remuneration.

• Confirmation of the performance conditions for the 2014 LTIP awards.

• Approval of minor changes to share plan rules.


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Director Contracts and Letters of Appointment

Details of the contracts and letters of appointment currently in place for directors who have served during the yearare as follows:

Directors Date of Contract Notice Date of letterTarsus Group Limited period of appointment

(months) Tarsus Group plcExecutiveNeville Buch 1 June 1998 12 3 October 2008Douglas Emslie 1 June 1998 12 3 October 2008Dan O’Brien 4 July 2011 12 4 July 2011Hugh Scrimgeour – 3 October 2008

Hugh Scrimgeour resigned from his role of Non–executive Director on 5 March 2014 to become an Executive Directorof the Company, he retired as a Director of the Company on 31 January 2015. He continues to be employed undera contract of employment with Tarsus Group Limited

Date of Contract Notice Date of letterOff-Price Specialist Center period of appointment

(months) Tarsus Group plc

Gary Marshall 8 March 2010 12 31 March 2010

Gary Marshall’s letter of appointment with Tarsus Group plc ceased when he resigned as a director on 5 March2014. He continues to be employed under a contract of employment with Tarsus Group Limited, having transferredfrom Off-Price Specialist Center on 6 April 2014.

Date of letter Unexpiredof appointment term

Tarsus Group plc (months)Non-ExecutiveRobert Ware 3 October 2008 7David Gilbertson 5 March 2014 12Tim Haywood 31 July 2014 5

All non-executive letters of appointment are renewable on a 12 months basis.

Paul Keenan resigned from his role as a Non-executive Director on 31 July 2014.

In respect of each of the directors, including the Non-executive Directors, there are no other material provisions(except as mentioned in this Report) which are necessary to allow shareholders to estimate the Company’s liabilityif the contract is terminated early.

Single total figure of remuneration

The following parts of the Annual Report on Remuneration have been audited as if the requirements of The Largeand Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 Schedule 8 Part3) had been applied:

• the single total figure of remuneration for each Director; • scheme interests awarded during the year; • pension entitlements; • payments to past Directors and payments for loss of office; and • Directors’ shareholdings and share interests.

All other parts of the Remuneration Committee Report are unaudited.


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The emoluments in respect of qualifying services to both the Group and the Company of each person who servedas a director of the Company during the year were as follows:

Executive Salary and fees Benefits Pension Annual bonus Long Term Total Incentives Remuneration

2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Neville Buch 283 275 9 9 – – 236 130 376 476 904 890Douglas Emslie 412 400 4 4 – – 343 380 714 903 1,473 1,687Dan O’Brien 258 250 4 4 – – 113 115 304 273 679 642Gary Marshall 39 219 1 9 – – – 80 – 282 40 590Hugh Scrimgeour 118 50 4 – – – 36 – – – 158 50

Non-executiveRobert Ware 51 50 – – – – – – – – 51 50Paul Keenan 30 50 – – – – – – – – 30 50David Gilbertson 42 – – – – – – – – – 42 –Tim Haywood 21 – – – – – – – – – 21 –

Notes

1. A proportion of Gary Marshall’s taxable benefits (medical insurance) were paid in US Dollars and have beendetailed in Sterling using an exchange rate of USD1.63/£1.

2. Gary Marshall resigned as a director of Tarsus Group plc on 5 March 2014, but continues to be employed by theGroup. The individual emoluments detailed above in respect of 2014 are in respect of his employment up untilhis resignation as a director on 5 March 2014.

3. Paul Keenan resigned as a director on 31 July 2014.

4. David Gilbertson and Tim Haywood were appointed as directors on 5 March 2014 and 31 July 2014 respectively.

5. No Director received any additional payment for loss of office.

6. Value of the long-term incentives in respect of 2013 are derived from awards granted in 2011 under the 2011 LTIPthat vested in accordance with adjusted EPS performance for the three financial years ending 31 December 2013,resulting in a 92% vesting of the respective awards. The value on vesting has been calculated by reference to theactual market price on the date of exercise of these awards, as shown in the Long Term Incentives section of thisreport.

7. Value of the long-term incentives for 2014 are derived from awards granted in 2012 under the 2011 LTIP that areexpected to vest in accordance with adjusted EPS performance for the three financial years ending 31 December2014, resulting in a 79% vesting of the respective awards. The value on vesting has been calculated by referenceto the average closing price of the Company’s shares (£2.0195) for the three months ending 31 December 2014.

8. Hugh Scrimgeour received fees in respect of his role as a Non-executive Director totalling £8,892 until 5 March2014. From 6 March 2014 to 31 December he received salary totalling £108,769. He resigned as a director on 31January 2015.

9. Taxable benefits include items such as medical insurance.

Executive Director base salaries and fees – 2015

The table below sets out the base salaries and fees of the Executive Directors with effect from 1 January 2015:

Executive Base salary Percentage£ increase

Neville Buch 291,750 3%Douglas Emslie 424,500 3%Dan O’Brien 265,250 3%


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Non-executive Director fees – 2015

The table below sets out the fees of the Executive Directors with effect from 1 January 2015:

Non-executive Base fees Percentage£ increase

David Gilbertson 52,500 3%Tim Haywood 52,500 3%Robert Ware 52,500 3%

2014 Performance bonus

For the 2014 financial year, the maximum annual bonus opportunity was 100% of salary for Douglas Emslie andNeville Buch, 50% of salary for Dan O’Brien and 43% of salary for Hugh Scrimgeour.

An underlying performance criterion applied to all Executive Directors whereby the Group must have achievedadjusted earnings per share of at least 12.1p for the financial year ending 31 December 2014. Should this target havefailed to be achieved no bonus would have been payable to any Executive Director.

For Douglas Emslie, Neville Buch and Dan O’Brien 50% of their 2014 bonus was payable on the achievement of anadjusted earnings per share of 12.1p for the financial year ending 31 December 2014. For Hugh Scrimgeour 20%of his 2014 bonus was payable on the achievement of an adjusted earnings per share of 12.1p for the financial yearending 31 December 2014.

Personal objectives for Neville Buch were set by the Remuneration Committee. Personal objectives for DouglasEmslie were set by the Executive Chairman, and for Dan O’Brien and Hugh Scrimgeour by the Group ManagingDirector. In all cases these were reviewed and approved by the Remuneration Committee in advance. TheRemuneration Committee also approved recommendations on the level of achievement against them at the end ofthe performance period.

Neville Buch’s personal objectives for the year ended 31 December 2014 focused on product growth initiatives,event execution and strategy development. Payout under this element of the bonus was 67%.

Douglas Emslie’s personal objectives for the year ended 31 December 2014 focused on product growth initiatives,event execution and strategy development. Payout under this element of the bonus was 67%.

Dan O’Brien’s personal objectives for the year ended 31 December 2014 focused on banking provisions and controlstructure targets and integration projects. Payout under this element of the bonus was 75%.

Hugh Scrimgeour’s personal objectives for the year ended 31 December 2014 focused on event execution anddivisional strategic development. Payout under this element of the bonus was 50%.

After taking account of their personal targets, Neville Buch, Douglas Emslie, Dan O’Brien and Hugh Scrimgeourearned 83.3%, 83.3%, 87.5% and 60% of their respective potential bonus opportunities.

2015 performance bonus framework

For the financial year commencing 1 January 2015, the Executive Bonus Plan will operate in line with theremuneration policy. Bonuses are based 50% on adjusted earnings per share and 50% on personal and strategicobjectives for Neville Buch, Douglas Emslie and Dan O’Brien. Bonus opportunities remain unchanged.

The Committee intends to disclose financial performance targets and personal objectives retrospectively in nextyear’s Remuneration Report, subject to these no longer being considered by the Board to be commercially sensitive.


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LONG TERM INCENTIVES

Tarsus Group plc 2011 Long Term Incentive Plan (the “LTIP”)

Date of At Granted Exercised Lapsed At Grant Exercisable Exercisable Market GainGrant 1 Jan during during during 31 Dec Market from to price on

2014 year year year 2014 Share on exerciseexercise

Neville Buch17/06/11 239,175 – 220,041 19,134 - 145.5p – – 216.5p £476,38903/05/12 235,855 – – – 235,855 152.0p 03/05/15 03/05/22 – –07/03/13 189,220 – – – 189,220 218.0p 07/03/16 07/03/23 – –

Douglas Emslie17/06/11 453,608 – 417,319 36,289 – 145.5p – – 216.5p £903,49603/05/12 447,368 – – – 447368 152.0p 03/05/15 03/05/22 – –07/03/13 366,972 – – – 366,972 218.0p 07/03/16 07/03/23 – –05/03/14 – 385,497 – – 385,497 213.75p 05/03/17 05/03/24 – –

Dan O’Brien28/07/11 142,405 – 131,012 11,393 - 158.0p – – 208.5p £273,16003/05/12 190,583 – – – 190,583 152.0p 03/05/15 03/05/22 – –07/03/13 143,348 – – – 143,348 218.0p 07/03/16 07/03/23 – –05/03/14 – 150,584 – – 150,584 213.75p 05/03/17 05/03/24 – –

Hugh Scrimgeour24/06/14 – 66,740 – – 66,740 224.75p 24/06/17 24/06/24 – –

2011 LTIP awards performance conditionsThe performance conditions for the LTIP awards made in 2011 are based on absolute targets for adjusted earningsper share over the three financial years 2011-2013 as follows:

Less than 43p – zero vesting43p – 30% of award vestsBetween 43p and 50p – between 30% and 100% of award vests on a straight line basis

The performance of the Group in the three years ending 31 December 2013 resulted in a cumulative adjustedearnings per share of 49.2p. Therefore the awards made under the LTIP vested at 92% during 2014.



The performance of the Group in the three years ending 31 December 2014 resulted in a cumulative adjustedearnings per share of 44.9p. Therefore the awards made under the LTIP are expected to vest at 79% during 2014.




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2014 LTIP awards performance conditionsThe performance conditions for the LTIP awards to be made in 2014 are based on absolute targets for adjustedearnings per share over the three financial years 2014 – 2016 as follows:

Less than 45p – zero vesting45p -30% of award vestsBetween 45p and 52p – between 30% and 100% of awards on a straight line basis.

2015 LTIP awards performance conditionsThe performance conditions for the LTIP awards to be made in 2015 are based on absolute targets for adjustedearnings per share over the three financial years 2015 – 2017 as follows:

Less than 54p – zero vesting54p – 30% of award vestsBetween 54p and 61p – Between 30% and 100% vesting on a straight line basis

The Committee, when setting the performance criteria in respect of the LTIP, takes account of the biennial nature ofthe business in respect of the required three year performance period for each award.

Company Share Option Plan

The 2008 CSOP was approved and adopted by shareholders at the General Meeting of the Company held on 31October 2008. Grants under the 1998 Company Share Option Plan and the 2008 Company Share Option Plan(together the ‘CSOP Legacy Plans’) which were in place prior to the 2008 CSOP continue to vest. The operation of the2008 CSOP is kept under review to ensure that grant levels, performance criteria and vesting schedules remainappropriate. The Remuneration Committee believes the 2008 CSOP is an effective way to incentivise employeeswithin the organisation and to align their interests with those of shareholders.

Details of share options granted under the 2008 CSOP and the CSOP Legacy Plans and held by those directors whoserved during the year, all of which are beneficially held, are as follows:

Grant At 1 Jan 14 Awarded Exercised Lapsed At 31 Dec 14 Exercise Earliest ExpiryPrice

Douglas Emslie3 Mar 06 325,000 – – – 325,000 212.5p 3 Mar 09 3 Mar 16

The exercise price is the market price of the Company’s ordinary shares at the date of the award.

No consideration is payable for the award of any options until such options are exercised. All of the options issuedto directors are subject to performance conditions. There were no variations during the year in the terms andconditions of any options, including performance conditions.

Options granted on 3 March 2006 required an increase in the Company’s share price reflecting at least RPI plus 3%per annum and matching or exceeding the performance of the FTSE Small Caps Index over the same period.

The options granted in 2006, which were granted at the market price of the Company’s ordinary shares at the dateof the award, have vested and are currently exercisable as to 100% of the shares under option.


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Save As You Earn Plan (‘SAYE Plan’)

The number of share options held by the directors under the SAYE Plan was as follows:

Grant Options Exercised Granted Lapsed Option OptionsDate as at in year in year in year Price as at 31

1 Jan Dec 20142014

Douglas Emslie 2 Apr 13 5,434 – – – 165.6p 5,434

Dan O’Brien 2 Apr 13 5,434 – – – 165.6p 5,434

There have been no changes to the options or shares held by directors between 31 December 2014 and 4 March2015.

Shareholdings of the Directors

The interests of the directors in the Company’s ordinary shares are shown in the Directors’ Report on page 41.

RELATIVE IMPORTANCE OF SPEND ON PAY

The graph below details the Group’s dividends and total Group-wide expenditure on pay for all employees (thisincludes pension, variable pay and social security), as reported in the audited financial statements for the last twofinancial years.

This information has been presented to assist shareholders in assessing the importance of spend on pay.

0

5000

10000

15000

20000

DIVIDENDS REMUNERATION

£6,977 £8,399

£15,296£15,998

2014

2013

£’000


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The difference in actual expenditure between 2013 and 2014 on remuneration for all employees in comparison todistributions to shareholders by way of dividend is set out in the table below:

2014 2013 % change between 2013 and 2014

Remuneration paid to all employees of group 15,998 15,296 5%Dividends paid 8,399 6,977 20%

Percentage change in remuneration of the Group Managing Director and employees

The percentage change in remuneration between 2014 and 2013 for the Group Managing Director and for allemployees in the Group is set out in the table below:

Percentage change in Average percentage change inremuneration* remuneration* of UK employees

between 2014 and 2013 between 2014 and 2013

Group Managing Director –3.2% 3.81%

*Remuneration includes salary, benefits and bonus only.

The comparator group of employees is comprised employees based in the UK as this provides geographicconsistency.

Statement of voting at last AGM

The following table sets out the votes cast in respect of our previous remuneration report for 2013 at the Company’s2014 AGM:

2013 Directors’ Remuneration Report

For Against Votes withheld

Number of votes 75,107,346 276,002 19,806Percentage of votes (Excluding abstentions) 99.63% 0.37% N/A

No views on directors’ remuneration were expressed to the Company by shareholders during the year.


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Total Shareholder Return (“TSR”) Performance

The graph below shows the Group’s TSR performance for the five year period ended 31 December 2014 against theperformance of the FTSE Small Cap Price Index.

The FTSE Small Cap Price Index was selected as it was considered to be the most appropriate benchmark given theGroup’s size and profile.

Growth in the value of a hypothetical £100 holding over five years. The chart has been rebased to 100 as at 1 January 2010.

Historical total remuneration for the director undertaking the role of CEO

Douglas Emslie2014 2013 2012 2011 2010£000 £000 £000 £000 £000

Total remuneration 1,473 1,687 706 642 448

% Bonus opportunity realised 83% 95% 100% 93% 39%

Long-term incentive vesting rates against maximum opportunity (2011 LTIP and SAP) 79% 92% 0% 0% 0%

Tarsus Group FTSE Small Cap

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Jan 10 Jan 11 Jan 12 Jan 13 Jan 15Jan 14

50

100

150

200

250

300


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GOVERNANCE – DIRECTORS’ RESPONSIBILITY STATEMENT

The directors are responsible for preparing the Annual Report and the financial statements in accordance withapplicable law and regulations.

Company law in Jersey requires the directors to prepare financial statements for each financial year. Under that lawthe directors have elected to prepare the Group financial statements in accordance with International FinancialReporting Standards (IFRSs) as adopted by the European Union (EU) and have also chosen to prepare the parentCompany financial statements under IFRSs as adopted by the EU. The financial statements are required by law togive a true and fair view of the state of affairs of the company and the group and of the Income Statement of theCompany and the Group for that period. In preparing these financial statements, International Accounting Standard1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable andunderstandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enableusers to understand the impact of particular transactions, other events and conditions on the entity’s financialposition and financial performance; and

• make an assessment of the Company’s ability to continue as a going concern.

The directors are responsible for keeping proper accounting records that are sufficient to show and explain theCompany’s transactions and disclose with reasonable accuracy at any time the financial position of the Company andenable them to ensure that the financial statements comply with the Companies ( Jersey) Law 1991. They are alsoresponsible for safeguarding the assets of the Company and hence for taking reasonable steps for the preventionand detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information includedon the Company’s website.

Responsibility statement

The Directors confirm that, to the best of their knowledge:

• the financial statements, prepared in accordance with IFRSs, give a true and fair view of the assets, liabilities,financial position and profit or loss of the Company and the undertakings included in the consolidation taken asa whole; and

• the Business Review, which is incorporated into the Directors’ Report, includes a fair review of the developmentand performance of the business and the position of the Company and the undertakings included in the consoli -dation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the BoardDouglas Emslie Dan O’BrienGroup Managing Director Group Finance Director4 March 2015 4 March 2015


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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TARSUS GROUP PLC

OPINION ON FINANCIAL STATEMENTS OF TARSUS GROUP PLC

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2014and of the group’s and the parent company’s profit for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adoptedby the European Union; and

• have been properly prepared in accordance with Companies ( Jersey) Law 1991.

The financial statements comprise the Consolidated and Company Income Statement, the consolidated andCompany Statements of Comprehensive Income, the Consolidated and Company Statements of Financial Position,the Consolidated and Company Statements of Cash Flows, the Consolidated and Company Statements of Changesin Equity and the related notes to the consolidated financial statements 1 to 28 and related notes to the Companyfinancial statements 1 to 12. The financial reporting framework that has been applied in their preparation isapplicable law and IFRSs as adopted by the European Union.

GOING CONCERN

We have reviewed the directors’ statement contained within the Directors’ Report on page 42 that the group is a goingconcern. We confirm that:

• we have concluded that the directors’ use of the going concern basis of accounting in the preparation of thefinancial statements is appropriate; and

• we have not identified any material uncertainties that may cast significant doubt on the group’s ability to continueas a going concern.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to thegroup’s ability to continue as a going concern.

OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT

The assessed risks of material misstatement described below are those that had the greatest effect on our auditstrategy, the allocation of resources in the audit and directing the efforts of the engagement team:

Risk How the scope of our audit responded to the risk

Appropriate judgement applied to the accounting for Business Combinations

The Group made five acquisitions during the year with For the five business combinations in the year, we have:consideration totalling £25.2 million.

• assessed the valuation of purchase consideration We identified a risk that the judgements made by by reference to acquisition agreements and, Directors in allocating the purchase price of for deferred and contingent elements, those acquisitions made during the year to Goodwill and key underlying assumptions relating to expectedacquired assets and liabilities are not appropriate. future performance that impact amounts to be paid;

Accounting for acquisitions involves management • reviewed share purchase agreements to completejudgement in estimating: our own assessment of acquired intangible assets,

using this assessment to challenge management;• the valuation of consideration;

• considered and challenged the judgements made in• the identification of acquired intangible assets; and the assessment of fair value of acquired assets and

liabilities, including intangible asset valuations, by:• the fair valuation of all acquired assets and liabilities.


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We also identified a risk that the ongoing assessment of – assessing the appropriateness of valuation the fair value of any outstanding deferred consideration methodologies used; from prior year acquisitions and the fair value of put and call options over shares held by non-controlling interests – benchmarking key assumptions, including applied are not appropriate. discount rates, against comparator companies;

Acquisitions of subsidiaries during the year are – sensitising relevant forecasts; disclosed in Note 28. Liabilities recognised relating to contingent consideration and put and call options are – tested the mechanical accuracy of the underlying disclosed in Notes 15 and 19. calculations; and

– benchmarked the residual goodwill arising against other industry comparator companies.

For deferred and contingent commitments relating to acquisitions in prior years, we have:

• recalculated the Group’s valuation of deferred consideration by reference to the terms in the acquisition agreements, actual post acquisition performance and management’s latest future performance forecasts;

• considered those future performance forecasts through performing sensitivity analysis and benchmarking against historic performance and local market trends; and

• considered other key assumptions used, such as discount rates, with reference to assessing the appropriateness of the methodology used, corroboration of key inputs to external evidence and benchmarking against comparator companies.

For put and call options, we have:

• agreed the stake held by the group to acquisition documents;

• assessed management’s fair value calculations against relevant accounting guidance; and

• recalculated the fair value of options with reference to future performance forecasts, assumptions and discount rates tested as outlined above.

Management’s annual impairment review of goodwill and intangible assets

Goodwill from business combinations and intangible In order to consider and challenge the appropriateness assets is assessed annually for impairment. Goodwill of management’s annual impairment review we and Intangible assets total £126.8m as at 31 December undertook the following procedures:2014 (2013: £98.0m).

• assessment of the Director’s forecasting accuracy by Impairment tests require the estimation of comparing previous projections to actuals achieved;recoverable value using a discounted cash flow measurement of value in use, as detailed in Note 12 • benchmarking discount and growth rates usedIntangible assets. against independent industry data and comparator

companies;


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We identified a risk that the judgements made by • assessing applied sensitivities;Directors when:

• verfiying the impact of those on associated • producing future cash flow forecasts; calculations prepared by management;

• selecting and applying appropriate discount rates; and • testing the integrity of the impairment model.

• considering of appropriate sensitivities

were not appropriate.

Recognition of Revenue

The group operates a diverse portfolio of events, Our audit procedures on revenue includedexhibitions, publications, conferences globally and as understanding the group’s revenue recognition policy,such revenue recognition across the group’s portfolio and substantively testing the consistent application of of events is a risk that utilizes significant audit resources. the policy across the group.

We identified a risk that exhibitor revenue associated To address potentially invalid or incomplete exhibitorwith their events may not be valid or complete. revenue from the Group’s events we:

Refer to the Group’s accounting policy for revenue • used event floor plans to test completeness of recognition in Note 1. revenue by tracing exhibitors from floor plans to

contracts, recorded revenue transactions andultimately to cash received;

• tested other revenue, such as sponsorship,publishing and conference revenue, from third partycontracts or evidence of attendance to revenuerecorded.

The description of risks above should be read in conjunction with the significant and material issues considered bythe Audit Committee discussed on page 51.

Our audit procedures relating to these matters were designed in the context of our audit of the financial statementsas a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financialstatements is not modified with respect to any of the risks described above, and we do not express an opinion onthese individual matters.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that theeconomic decisions of a reasonably knowledgeable person would be changed or influenced. We use materialityboth in planning the scope of our audit work and in evaluating the results of our work.

We determined materiality for the group to be £800,000 (2013: £1,000,000), which is 6% (2013: 5%) of management’sadjusted profit before tax, and equates to 2% of equity (2013: 2.5%). Materiality has been calculated on a consistentbasis with 2013, but fluctuates due to the group’s biennial operating cycle. Adjusted profit before tax has been usedas a base for materiality on the basis that it reflects underlying business performance; however amortisation andshare option charges have not been excluded from our calculation of materiality, as they are annual costs. Analysisof adjusting items is disclosed in Note 3 on page 94.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £16,000(2013: £20,000), as well as differences below that threshold that, in our view, warranted reporting on qualitativegrounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overallpresentation of the financial statements.


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An overview of the scope of our audit

Our group audit scope was based on a quantitative risk assessment considering metrics including revenue and profitbefore tax as well as a qualitative risk assessment, considering significant risks of material misstatement and ourassessment of local market risk.

In selecting the divisions in scope each year, we update our understanding of the Group and its environment, itsprincipal risks, performance, and our understanding of the Group’s system of internal controls, in order to check thatthe divisions selected provide an appropriate basis on which to undertake audit work to address the identified risksof material misstatement. Such audit work represents a combination of procedures, all of which are designed totarget the Group’s identified risks of material misstatement in the most effective manner possible.

Our group audit scope focused primarily on the Group’s US and European divisions, with focused specific auditprocedures performed on the Group’s Emerging Markets, reflecting the Group’s three reportable segments. Of thegroup’s divisions, seven were subject to a full scope audit, and two divisions were subject to specified auditprocedures where our testing was focused on our assessment of local market risks and identified risks ofmisstatement, and considering the materiality of the Group’s operations at those locations.

The seven (2013: six) full scope divisions represent the principal business units within the Group’s three reportablesegments and account for 68% (2013: 76%) of the Group’s revenue, 94% of the Group’s profit before tax (2013: 77%)and 85% of the Group’s net assets (2013: 97%). They were also selected to provide an appropriate basis forundertaking audit work to address the risks of material misstatement identified above. Our audit work at each ofthese divisions was executed at levels of materiality applicable to each individual unit which were lower than groupmateriality and ranged from £320,000 to £600,000 (2013: £400,000 to £750,000).

The two (2013: two) divisions subject to specified audit procedures that were focused on risks relating to EmergingMarkets represented 14% (2013: 7%) of the Group’s revenue and 6% of the Group’s profit before tax (2013: 5%).Specified audit procedures focussed on risks relating to Income Statement balances, and included proceduresdesigned to mitigate the revenue recognition risk outlined above as well as other audit procedures deemed relevantto the local market.

The Group audit team provides appropriate oversight and guidance to component auditors through a combinationof location visits, regular communication and detailed review. In the current year the Group audit team completedthe audit procedures for six of the seven full audit scope divisions, with component auditors being used for theremaining full scope division. The Group audit team visited the component auditor of the full scope division in theprior year and completed a detailed and thorough review of their work.

Component auditors were also used to perform specified audit procedures for the two divisions in Emerging Markets.The Group auditor regularly communicated with the component auditors performing specified audit procedures,from the planning stage through to a detailed review of the procedures performed.

The remaining divisions that were assessed as not being significant to the Group were subject to central analyticalprocedures performed by the Group audit team.

Matters on which we are required to report by exception

Adequacy of explanations received and accounting recordsUnder the Companies ( Jersey) Law 1991 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

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

• the financial statements are not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.


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Corporate Governance StatementUnder the Listing Rules we are also required to review the part of the Corporate Governance Statement relating tothe company’s compliance with ten provisions of the UK Corporate Governance Code. We have nothing to reportarising from our review.

Our duty to read other information in the Annual Report Under International Standards on Auditing (UK andIreland), we are required to report to you if, in our opinion, information in the annual report is:

• materially inconsistent with the information in the audited financial statements; or

• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the group acquired inthe course of performing our audit; or

• otherwise misleading.

In particular, we are required to consider whether we have identified any inconsistencies between our knowledgeacquired during the audit and the directors’ statement that they consider the annual report is fair, balanced andunderstandable and whether the annual report appropriately discloses those matters that we communicated tothe audit committee which we consider should have been disclosed. We confirm that we have not identified any suchinconsistencies or misleading statements.

Other matter

In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared inaccordance with the provisions of the UK Companies Act 2006 as if that Act had applied to the company.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for thepreparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibilityis to audit and express an opinion on the financial statements in accordance with applicable law and InternationalStandards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’sEthical Standards for Auditors. We also comply with International Standard on Quality Control 1 (UK and Ireland). Ouraudit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied.Our quality controls and systems include our dedicated professional standards review team, strategically focusedsecond partner reviews and independent partner reviews.

This report is made solely to the company’s members, as a body, in accordance with Article 113A of the Companies(Jersey) Law 1991. Our audit work has been undertaken so that we might state to the company’s members thosematters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than the company and the company’smembers as a body, for our audit work, for this report, or for the opinions we have formed.


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Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient togive reasonable assurance that the financial statements are free from material misstatement, whether caused byfraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s andthe parent company’s circumstances and have been consistently applied and adequately disclosed; thereasonableness of significant accounting estimates made by the directors; and the overall presentation of thefinancial statements. In addition, we read all the financial and non-financial information in the annual report toidentify material inconsistencies with the audited financial statements and to identify any information that isapparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the courseof performing the audit. If we become aware of any apparent material misstatements or inconsistencies we considerthe implications for our report.

James Bates for and on behalf of Deloitte LLPChartered Accountants and Recognized AuditorLondon, UK4 March 2015


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CONSOLIDATED INCOME STATEMENT

Notes Year to 31 Year to 31December December

2014 2013£000 £000

Group revenue 2 60,568 75,861

Operating costs excluding exceptional items (46,508) (54,175)Impairment loss 12 – (3,947)Exceptional operating (costs) / income 3 (3,014) 76

Total operating costs 6 (49,522) (58,046)Share of profit of Joint Ventures 13 698 1,266

Group operating profit 2,3 11,744 19,081

Net finance costs 7 (3,569) (3,181)

Profit before taxation 8,175 15,900

Taxation expense 8 (1,422) (2,674)

Profit for the financial year 6,753 13,226

Profit for the financial year attributable to equityshareholders of the parent company 4,989 11,582

Profit for the financial year attributable tonon-controlling interests 1,764 1,644

6,753 13,226


2014 2013

Earnings per share (pence) 10

– basic 5.0 12.2– diluted 5.0 12.1

£000 £000Dividends 9Equity – ordinaryFinal 2013 dividend paid 4,996 4,377Interim 2014 dividend paid 2,179 2,050Minority dividend paid 1,224 550

8,399 6,977


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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year to 31 Year to 31December December

2014 2013£000 £000

Profit for the financial year 6,753 13,226

Cash flow hedge reserve – movement in fair value (910) 512Foreign exchange translation differences 1,977 (7,975)

Other comprehensive income/(expense) 1,067 (7,463)

Total comprehensive income for the year 7,820 5,763

Attributable to:Equity shareholders of the parent company 6,056 4,119Non-controlling interests 1,764 1,644

Total comprehensive income for the year 7,820 5,763

Other comprehensive income relating to foreign exchange translation differences, fair value movements in cash flowhedges and the tax effects thereon may all subsequently be reclassified to profit and loss if certain conditions aremet.


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CONSOLIDATED STATEMENT OF FINANCIAL POSITION


2014 2013£000 £000

NON-CURRENT ASSETSProperty, plant and equipment 11 1,278 1,239Intangible assets 12 126,756 97,967Investment in Joint Ventures 13 15,924 15,432Other investments 1 1Deferred tax assets 14 5,006 2,703

148,965 117,342CURRENT ASSETSTrade and other receivables 15 32,178 25,030Cash and cash equivalents 16 12,347 12,142

44,525 37,172CURRENT LIABILITIESTrade and other payables 17 (28,661) (26,336)Deferred income (28,519) (18,384)Provisions (130) (73)Liabilities for current tax (3,689) (3,964)

(60,999) (48,757)

NET CURRENT LIABILITIES (16,474) (11,585)

TOTAL ASSETS LESS CURRENT LIABILITIES 132,491 105,757

NON-CURRENT LIABILITIESOther payables 19 (35,953) (19,286)Deferred tax liabilities 14 (8,048) (4,449)Interest bearing loans and borrowings 18 (50,957) (41,800)

(94,958) (65,535)

NET ASSETS 37,533 40,222

EQUITYShare capital 21 5,060 4,797Share premium account 47,424 37,689Other reserves (13,794) (14,862)Retained (loss)/earnings (6,601) 8,767Issued capital and reserves attributable to equityshareholders of the parent 32,089 36,391

NON-CONTROLLING INTERESTS 5,444 3,831

TOTAL EQUITY 37,533 40,222

The financial statements of Tarsus Group plc, registered number 101579 ( Jersey), were approved by the board andauthorised for issue on 4 March 2015 and signed on its behalf by:

J D Emslie D P O’BrienGroup Managing Director Group Finance Director


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CONSOLIDATED STATEMENT OF CASH FLOWS


2014 2013£000 £000

Cash flows from operating activitiesProfit for the year 6,753 13,226Adjustments for:Depreciation 11 535 613Amortisation & Impairment 12 4,504 7,630Other gains (1,669) (2,823)(Loss)/Profit on disposal of tangible assets (24) 4Share option charge 1,180 1,041Taxation charge 8 1,422 2,674Interest payable 7 3,569 3,181Share of joint venture profits (698) (1,266)Dividend received from joint venture company – 775

Operating cash flow before changes in working capital 15,572 25,055Increase in trade and other receivables (6,799) (755)Increase in trade and other payables 7,146 83Increase in provisions 85 102

Cash generated from operations 16,004 24,485Interest paid (1,760) (1,393)Income taxes paid (1,682) (3,371)

Net cash from operating activities 12,562 19,721

Cash flows from investing activitiesProceeds from sale of tangible fixed assets 39 30Acquisition of property, plant & equipment (645) (261)Acquisition of intangible fixed assets (1,120) (801)Acquisition of subsidiaries – cash paid (16,757) (2,698)Acquisition of joint venture – cash paid – (2,812)Proceeds on entering forward contract 833 –Acquisition of subsidiaries – cash acquired 152 4Deferred and contingent consideration paid (5,083) (18,829)

Net cash outflow from investing activities (22,581) (25,367)

Cash flows from financing activitiesDrawdown of borrowings 9,157 15,263Bank facility fees (330) (176)Proceeds from the issue of share capital 10,000 –Cost of share issue (388) (76)Dividends paid to shareholders in parent company (6,975) (6,279)Dividends paid to non-controlling interests in subsidiaries (1,224) (550)

Net cash inflow from financing activities 10,240 8,182

Net increase in cash and cash equivalents 221 2,536Opening cash and cash equivalents 12,142 10,255Foreign exchange movements (16) (649)

Closing cash and cash equivalents 16 12,347 12,142


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Other Reserves

Share Share Reorgan- Capital Fair Foreign Retained Non- TotalCapital Premium isation Redemption Value Exchange Earnings Controlling

Account Reserve Reserve* Reserve Reserve Reserve Interests£000 £000 £000 £000 £000 £000 £000 £000 £000

As at 1 January 2014 4,797 37,689 6,013 (443) 92 (20,523) 8,766 3,831 40,222

Recognised foreign exchange lossesfor the period – – – – – 1,977 – – 1,977Profit for the period: – – – – – – – – –– Attributable to equity shareholders – – – – – – 4,989 – 4,989– Attributable to non-controllinginterests – – – – – – – 1,764 1,764Cash flow hedge reserve – – – – (910) – – – (910)Total comprehensive income(expense) for the period – – – – (910) 1,977 4,989 1,764 7,820Scrip dividend 5 195 – – – – – – 200New share capital subscribed 258 9,927 – – – – – – 10,185Cost of shares issued – (387) – – – – – – (387)Share option charge – – – – – – 1,180 – 1,180Movement in reserves relating todeferred tax – – – – – – (208) – (208)Other movements in reserves – – – – – – (1,917) – (1,917)Dividend paid – – – – – – (7,175) – (7,175)Dividend paid to non-controllinginterests – – – – – – – (1,224) (1,224)Written Put/Call options overnon-controlling interests – – – – – – (12,236) – (12,236)Non-controlling interests arising onacquisition – – – – – – – 1,073 1,073

Net change in shareholders’ funds 263 9,735 – – (910) 1,977 (15,367) 1,613 (2,689)

As at 31 December 2014 5,060 47,424 6,013 (443) (818) (18,546) (6,601) 5,444 37,533

*The reorganisation reserve was created as a result of the Scheme of Arrangement effective from 26 November2008. Tarsus Group Limited, previously Tarsus Group plc, registered in England and Wales under company number2000544, entered into a “Share for Share” exchange on a one–for–one basis with Tarsus Group plc, registered inJersey under company number 101579.


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

Other Reserves

Share Share Reorgan- Capital Fair Foreign Retained Non- TotalCapital Premium isation Redemption Value Exchange Earnings Controlling

Account Reserve Reserve* Reserve Reserve Reserve Interests£000 £000 £000 £000 £000 £000 £000 £000 £000

At 1 January 2013 4,772 37,484 6,013 (443) (420) (12,548) 9,387 2,783 47,028

Recognised foreign exchange lossesfor the period – – – – – (7,975) – – (7,975)Profit for the period: – – – – – – – – –– Attributable to equity shareholders – – – – – – 11,582 – 11,582– Attributable to non-controllinginterests – – – – – – – 1,644 1,644Cash flow hedge – – – – 512 – – – 512Total comprehensive income(expense) for the period – – – – 512 (7,975) 11,582 1,644 5,763Scrip dividend 3 144 – – – – – – 147New share capital subscribed 22 61 – – – – – – 83Share option charge – – – – – – 1,041 – 1,041Movement in reserves relating todeferred tax – – – – – – 476 – 476Dividend paid – – – – – – (6,427) – (6,427)Dividend paid to non-controllinginterests – – – – – – – (550) (550)Written Put/Call options overnon-controlling interests – – – – – – (4,431) – (4,431)Non-controlling interests arising onacquisition – – – – – – (2,862) (46) (2,908)

Net change in shareholders’ funds 25 205 – – 512 (7,975) (621) 1,048 (6,806)

As at 31 December 2013 4,797 37,689 6,013 (443) 92 (20,523) 8,766 3,831 40,222


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GROUP ACCOUNTING POLICIES

Tarsus Group plc (the “Company”) is a company incorporated in Jersey. The consolidated financial statements of theCompany for the year ended 31 December 2014 present information about the Company and its subsidiaries(together referred to as the “Group”) and the Group’s interest in jointly controlled entities. The parent companyfinancial statements present information about the Company as a separate entity and not about its Group.

The Company is listed on the London Stock Exchange.

The financial statements were authorised for issue by the directors on 4 March 2015.

a) Statement of complianceBoth the Group and Company financial statements have been prepared in accordance with International FinancialReporting Standards (“IFRSs”) as adopted by the EU. The Company financial statements are presented on pages 121to 128.

Adoption of new International Financial Reporting Standards in 2014The following new standards and interpretations have been adopted in the current year but have not impacted thereported results or financial position:

• IFRS 10 - Consolidated Financial Statements• IFRS 11 – Joint Arrangements• IFRS 12 – Disclosure of Interests in Other Entities• Amendments to IFRS 10, IFRS 12 and IAS 27 – Investment Entities• IAS 27 – Separate Financial Statements• IAS 28 Investments in Associates and Joint Ventures

Standards and Interpretations issued but not yet appliedAt the date of authorisation of these financial statements, certain new standards, amendments and interpretationsto existing standards have been published that are mandatory for forthcoming financial periods, but which theGroup has not adopted early. Those which are considered relevant to the Group’s operations are as follows:

• Annual improvements to IFRS’ 2011-13 Cycle – Effective for periods starting on or after 1 January 2015• Annual improvements to IFRS’ 2010-12 Cycle – Effective for periods starting on or after 1 February 2015

Other standards issued but not yet effective are not expected to have a material impact on the financial statements.

b) Basis of preparation and accounting estimates and judgementsThese financial statements are presented in Sterling, rounded to the nearest thousand.

The accounting policies set out below have been applied consistently to all periods presented in these financialstatements.

The preparation of financial statements in conformity with IFRSs requires management to make judgements,estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,income and expenses. The estimates and underlying assumptions are based on historical experiences and variousother factors that are believed to be reasonable under the circumstances, the results of which form the basis ofmaking judgements about carrying values of assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the revision affects only that period, or in the period ofthe revision and future periods if the revision affects both current and future periods.

The financial statements have been prepared on a going concern basis, which assumes that the Company willcontinue in operational existence for the foreseeable future as disclosed in the Directors report on page 42.


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. GROUP ACCOUNTING POLICIES (CONTINUED)

c) Basis of consolidationi) SubsidiariesSubsidiaries are those entities controlled by the Company. Control exists when the Company has the power, di-rectly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its ac-tivities. In assessing control, potential voting rights that presently are exercisable or convertible are also takeninto account. The financial statements of subsidiaries are included in the consolidated financial statements fromthe date control commences until the date that control ceases.

ii) Joint venturesJoint ventures are those entities over whose activities the Group has joint control. The consolidated financial state-ments include the investment in joint ventures, stated at cost, plus the Group’s share of retained post acquisitionprofits and other changes in net assets. Joint ventures are equity accounted from the date that joint control com-mences until the date that the joint control ceases.

iii) Transactions eliminated on consolidationIntragroup balances and any unrealised gains and losses or income and expenditure arising from intragrouptransactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising fromtransactions with jointly controlled entities are eliminated to the extent of the Group’s interest in the entity.

d) Foreign currencyi) Foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.Monetary assets and liabilities denominated in foreign currencies at the year end are translated into the relevantfunctional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising ontranslation are recognised in the income statement. Non-monetary assets and liabilities that are measured interms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

ii) Financial statements of foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising onconsolidation, are translated into Sterling at foreign exchange rates ruling at the year end. The revenues andexpenses of foreign operations are translated into Sterling at the weighted average rate for the year. Foreignexchange differences arising on retranslation are recognised directly in a separate component of equity. Anyexchange differences arising from the translation of the net investment which were previously taken to reservesare released to the income statement upon disposal of the investment.

e) Property, plant and equipmenti) Owned assetsItems of property, plant and equipment are stated at cost less accumulated depreciation (see below) andimpairment losses (see accounting policy g).

ii) DepreciationDepreciation is charged to the income statement on a straight-line basis over the estimated useful lives of itemsof property, plant and equipment. The estimated useful lives are as follows:

Computer equipment 3 yearsFixtures and fittings 4-5 yearsMotor vehicles 4 years

The residual value and economic lives of property, plant and equipment is reassessed annually.


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f) Intangible assets and goodwilli) GoodwillGoodwill represents amounts arising on acquisition of subsidiaries and joint ventures.

In respect of business acquisitions, goodwill represents the difference between the fair value of the considerationand the fair value of the net identifiable assets and contingent liabilities acquired. Acquisition costs are expensedas incurred.

In addition, due to timing of acquisitions amongst other factors, the process of allocating purchase price cannotalways be completed within the period of time for preparation of the financial statements and IFRS 3 allows atwelve month period from the date of acquisition to finalise the accounting for a business combination. In suchcircumstances a provisional allocation is made, which may give rise to the need for adjustment within the nextfinancial year.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating unitsand is not amortised but is tested annually for impairment (see accounting policy g).

Adjustments to any contingent consideration arising from events subsequent to the acquisition date are recordedin the income statement.

ii) Other intangible assetsOther intangible assets that are acquired by the Group are stated at cost less accumulated amortisation andimpairment losses (see accounting policy g).

Expenditure on internally generated goodwill and brands is recognised in the income statement as an expenseincurred.

iii) Subsequent expenditureSubsequent expenditure on capitalised intangible assets is capitalised only when it meets the recognition criteriaset out in IAS 38, “Intangible Assets”. All other expenditure is expensed as incurred.

iv) AmortisationAmortisation is charged to overheads in the income statement on a straight line basis over the estimated usefullives of intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite usefullife are systematically tested for impairment on an annual basis. Other intangible assets are amortised from thedate they are available for use. The estimated useful lives are determined separately for each acquisition and fallwithin the following ranges:

Trademarks 10 – 20 yearsCustomer lists 5 – 10 years

g) ImpairmentThe carrying amounts of the Group’s goodwill is reviewed annually to determine the asset’s recoverable amount. Animpairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds itsrecoverable amount. Impairment losses are recognised in the income statement.

For other assets the Group considers annually whether there are any impairment indicators. If there are, animpairment review is carried out.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amountof any goodwill allocated to cash-generating units (groups of units) and then to reduce the carrying amount of theother assets in the unit (group of units) on a pro-rata basis.

i) Calculation of recoverable amountThe recoverable amount is the greater of the net selling price, defined as the fair value less costs to sell, and valuein use. In assessing value in use, the estimated future cash flows are discounted to their present value, using apre-tax discount rate that reflects current market assessments of the time value of money and the risks specificto the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount isdetermined for the cash-generating unit to which the asset belongs.


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ii) Reversals of impairmentAn impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used todetermine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined, net of depreciation or amortisation, if no impairment loss had beenrecognised.

h) Financial instrumentsThe Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, afinancial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are recognised on the date when the Group becomes a party to the contractual provisions ofthe instrument. Financial instruments are recognised initially at fair value and are derecognised on the date whenthe Group is no longer a party to the contractual provisions of the instrument.

i) Trade and other receivablesTrade and other receivables that are short term in nature are stated at their cost less impairment losses (seeaccounting policy g).

ii) Trade payablesTrade and other payables that are short term in nature are stated at unamortised cost.

iii) Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable ondemand and that form an integral part of the Group’s cash management are included as a component of cashand cash equivalents for the purpose of the statement of cash flows.

iv) Hedging of net investment in foreign operationsThe portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation that isdetermined to be an effective hedge is taken to the foreign exchange reserve. The ineffective portion is recognisedimmediately in profit or loss.

v) Financial guaranteesFinancial guarantees issued by the Company and other entities within the Group are recognised as financialliabilities at the date the guarantee is issued. Liabilities arising from financial guarantee contracts, includingCompany guarantees of subsidiaries through deeds of cross guarantee, are initially recognised at fair value andsubsequently at the higher of the amount determined in accordance with the Group’s provisions accounting policy(please refer to note 1.k) and the amount initially recognised less cumulative amortisation.

vi) Interest-bearing borrowingsInterest-bearing borrowings are recognised initially at fair value, less attributable transaction costs. Subsequentto initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between costand redemption value being recognised in the income statement over the period of the borrowings on an effectiveinterest basis.

vii) Derivative financial instrumentsDerivatives are initially recognised at fair value on the date the contract is entered into and subsequentlyremeasured in future periods at fair value. The method of recognising the resulting change in fair value isdependent on whether the derivative is designated as a hedging instrument.

The Group has entered into interest rate derivatives as a means of hedging interest rate risk. The effective partof the change in fair value of these derivatives is recognised directly in equity. Any ineffective portion is recognisedimmediately in the income statement. Amounts accumulated in equity are recycled to the income statement inthe periods when the hedged items will affect profit and loss. Where hedge accounting is not applied, movementin fair value are recognised in the income statement. The fair value of interest rate swaps is the estimated amountthat the Group would receive or pay to terminate the swap at the balance sheet date.


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i) DividendsDividends are recognised as a liability in the period in which they are appropriately authorised and are no longer atthe discretion of the entity.

j) Employee benefits – Share-based payment transactionsThe share option scheme and the share acquisition plan allow Group employees to acquire shares of the Company.The fair value of options and rights granted is recognised as an employee expense with a corresponding increase inequity. The fair value is measured at grant date and spread over the period during which the employees becomeunconditionally entitled to the options and rights. The fair value of the options and rights granted are measuredusing the Black-Scholes and Monte Carlo Option Pricing models respectively, taking into account the terms andconditions upon which the options were granted.

The Group has no cash-settled share option schemes (see note 20).

k) ProvisionsA provision is recognised in the statement of financial position when the Group has a present legal or constructiveobligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settlethe obligation. If the effect is material, provisions are determined by discounting the expected future cash flows ata pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risksspecific to the liability.

i) RestructuringA provision for restructuring is recognised when the Group has approved a detailed and formal restructuringplan, and the restructuring has either commenced or has been announced publicly. Future operating costs arenot provided for.

ii) Onerous contractsA provision for onerous contracts is recognised when the expected benefits to be derived by the Group from acontract are lower than the unavoidable cost of meeting its obligations under the contract.

l) Deferred considerationDeferred consideration relates to agreed payments to the vendors of a business acquired that are payable aftercompletion. Where a portion of consideration for an acquisition is deferred to a date more than one year after theend of the current financial year, that portion of deferred consideration is discounted to its present value, if theeffect of the time value of money is material. The amount, by which that portion of deferred consideration isdiscounted, is charged to interest payable over time.

m) Contingent considerationContingent consideration relates to payments to the vendors, payable after completion, that are dependent on theoutcome of future events. It is initially measured at its fair value on the date of acquisition and is restated to fair valueat each subsequent period end, with movements charged or credited to the income statement.

i) Put call option liabilitiesLiabilities arising from written put options over shares held by non-controlling interests are initially recognised atthe present value of the redemption amount. If the risks and rewards of ownership of the non-controlling interestare transferred to the group then the minority interest is first reduced to nil with any excess recognised as areduction in equity attributable to equity holders of the parent. Unwinding of the discount on the liability isrecognised as a finance cost. Any changes in the value of the liability arising from changes in the estimatedredemption amount is also recognised as a finance cost.

n) Revenue and cost recognition on eventsRevenue represents amounts invoiced in respect of completed exhibitions and conferences, together with relatedpublishing revenue and new media revenues, exclusive of value added tax. Advance payments by customers arerecorded as deferred income. Revenues are recognised in the income statement when the significant risks andrewards have been transferred to the buyer and the company has no further managerial involvement. No revenueis recognised if there are significant uncertainties regarding recovery of the consideration due or associated costsor the amounts cannot be reliably measured.


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i) Traditional mediaProfit is recognised when an event is completed. As such, billings and cash received in advance and directly relatedcosts arising in the year relating to uncompleted and future events are deferred until the events are completed.The amounts so deferred are included in the statement of financial position as deferred income or prepaid eventcosts. Losses are recognised in the income statement account in the period the loss is first anticipated.

ii) New mediaThe revenue streams that relate to a period of time have an ongoing obligation and, therefore, are recognised overthe period to which they relate. Those revenue streams that have no ongoing obligation are recognised at theinvoice date.

o) Expensesi) Operating lease paymentsPayments made under operating leases are recognised in the income statement on a straight-line basis over theterm of the lease. Lease incentives received are recognised in the income statement as an integral part of the totallease expense.

ii) Finance costsNet financing costs comprise interest payable on borrowings calculated using the effective interest rate method,interest receivable on funds invested, foreign exchange gains and losses, and gains and losses on hedginginstruments that are recognised in the income statement (see accounting policy h).

Interest income is recognised in the income statement as it accrues, taking into account the effective yield on theasset. Dividend income is recognised in the income statement on the date that the dividend is declared and becomeslegally receivable.

p) TaxationIncome tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in theincome statement except to the extent that it relates to items recognised directly in equity, in which case it isrecognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantivelyenacted at the year end and any adjustments in respect of prior years.

Deferred tax is provided using the liability method, providing for temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the amounts for taxation purposes. The followingtemporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assetsor liabilities that affect neither accounting nor taxable profit and the differences relating to investments in subsidiariesto the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided isbased on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using taxenacted or substantively enacted at the year end.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be availableagainst which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probablethat the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liabilityto pay the related dividend.

Critical accounting judgements and key sources of estimation and uncertainty:In the process of applying the Group’s accounting policies, the following judgements and assumptions have beenmade by management and have the most significant effect on the amounts recognised in the financial statementsor have the most risk of causing a material adjustment to the carrying amounts of assets and liabilities within thenext financial year.


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Goodwill and intangiblesSignificant accounting judgements made in the preparation of the financial statements relate to the allocation ofthe purchase price of acquisitions between intangibles and goodwill as required under IFRS 3 “Businesscombinations” and the determination of the useful lives of the intangible assets. The key assumptions used inestimating the net present value of the additional future cash flows are the discount rate, royalty rate, attrition rateand the period over which the intangible assets affect future cash flows.

The review of potential impairment is an area where significant accounting estimates and judgements are made.Further details of assumptions used can be found in note 12.

Contingent considerationContingent consideration is recognised in the accounts as a liability based on accounting estimates and judgementson future revenue streams and put option liabilities. Estimated future cash flows are discounted in calculating fairvalue.

2. SEGMENTAL ANALYSIS

IFRS 8 ‘Operating Segments’ requires operating segments to be identified on the basis of internal reports aboutcomponents of the Group that are regularly reviewed by the Board in order to allocate resources to the segmentsand to assess their performance.

The Group’s reportable segments, which are those reported to the Board, are the operating businesses managedby geographically based management teams responsible for their performance. The Board uses Adjusted profitbefore tax as a key metric to monitor the performance of the business.

As at 31 December 2014, the Group was organised into three main segments – Emerging Markets, USA and Europe.

The main activities of all segments are the production of exhibitions supported by other media activities related tothose exhibitions.


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2. SEGMENTAL ANALYSIS (CONTINUED)

The following table sets out the revenue and profit information and certain asset and liability information for theGroup’s reportable segments:

31 December 2014Emerging Central

Markets USA Europe Costs GroupRevenue by sector £000 £000 £000 £000 £000

Group revenue 23,736 24,557 12,275 – 60,568

Profit/(loss) from operating activities 7,323 11,694 1,234 (8,507) 11,744Net financing costs – – – (3,569) (3,569)

Profit/(loss) before taxation 7,323 11,694 1,234 (12,076) 8,175Exceptional debits – – – 2,088 2,088Share option charge – – – 1,180 1,180Share of Joint Venture tax – – – 412 412Amortisation charge – – – 3,213 3,213Unwinding of discount – – – 1,884 1,884

Adjusted profit/(loss) before tax 7,323 11,694 1,234 (3,299) 16,952

Segment non-current assets 70,468 55,237 18,254 – 143,959Segment current assets 21,462 10,112 12,951 – 44,525

91,930 65,349 31,205 – 188,484

Deferred tax assets 5,006

Total assets 193,490

Segment liabilities (51,962) (16,804) (75,454) – (144,220)

Liabilities for current tax (3,689)Deferred tax liabilities (8,048)

Total liabilities (155,957)


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2. SEGMENTAL ANALYSIS (CONTINUED)

31 December 2013Emerging Central

Markets USA Europe Costs GroupRevenue by sector £000 £000 £000 £000 £000

Group revenue 37,089 18,719 20,053 – 75,861

Profit/(Loss) from operating activities 13,955 8,796 4,770 (8,440) 19,081Net financing costs – – – (3,181) (3,181)

Profit/(Loss) before taxation 13,955 8,796 4,770 (11,621) 15,900Exceptional credits – – – (1,117) (1,117)Share option charge – – – 1,041 1,041Amortisation charge – – – 2,710 2,710Impairment of tangibles – – – 3,947 3,947Unwinding of discount – – – 1,691 1,691

Adjusted profit/(Loss) before tax 13,955 8,796 4,770 (3,349) 24,172

Segment non-current assets 65,419 37,824 11,396 – 114,639Segment current assets 13,809 7,566 15,797 – 37,172

79,228 45,390 27,193 – 151,811

Deferred tax assets 2,703

Total assets 154,514

Segment liabilities (35,354) (12,990) (57,534) – (105,878)

Liabilities for current tax (3,964)Deferred tax liabilities (4,449)

Total liabilities (114,291)


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3. PROFIT AND LOSS ANALYSIS

The following analysis illustrates the performance of the Group’s activities and reconciles the Group’s pre-tax profitto adjusted profit. Adjusted results are presented to provide an indication of underlying financial performance andto reflect how the business is managed and measured on a day-to-day basis. The adjusted profit before tax excludesexceptional costs, share option charges, amortisation and impairment charges, profit on sale of subsidiary, profit orloss on disposal of tangible and intangible assets, tax on joint venture profits and adjustments to contingentconsideration.

2014 2013£000 £000


Add back:Exceptional debit/(credit) 2,088 (1,117)Share option charge 1,180 1,041Amortisation charge (excluding amounts charged to costs of sale) 3,213 2,710Impairment of intangible assets – 3,947Tax on Joint Venture profits 412 –Unwinding of discount 1,884 1,691

Adjusted profit before tax 16,952 24,172Tax thereon (2,546) (3,618)

Adjusted profit after tax 14,406 20,554

In 2014, debits include exceptional one-off costs of £1.3 million resulting from acquisitions or potential acquisitions,£0.3 million of one off joint venture costs, and £0.7 million from bank re-financing. A £0.2 million credit was bookedagainst the carrying value of put/call option liabilities.

4. OPERATING PROFIT

Operating profit is stated after charging:2014 2013£000 £000

Depreciation 535 613Amortisation charge 4,504 3,683Impairment of intangible assets – 3,947Auditors’ remuneration:– audit of Group financial statements 172 150– audit of financial statements of subsidiaries pursuant to legislation 72 70– other services – corporate finance transactions 147 28Lease rentals – property 470 593Rent 417 321Lease rentals – other 4 –(Gain)/Loss on disposal of tangible fixed assets (24) 4Foreign exchange losses/gains 12 (1,030)


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5. PERSONNEL EXPENSES AND NUMBERS

The average number of persons employed by the Group, including Executive Directors, during the year was:

2014 2013Number Number

Senior management 50 42Sales, marketing and operations 239 187Publishing 19 8Internet 13 7Finance and administration 90 78

411 322

2014 2013£000 £000

Wages and salaries 13,486 13,094Social security costs 1,063 924Equity settled transactions (note 20) 1,180 1,041Health care 269 237

15,998 15,296

The aggregate directors’ remuneration for 2014 is £2,004,284 (2013: £2,128,421). Details in relation to Directors’Remuneration are set out in the section of the Directors’ Remuneration Report on pages 63 to 71.

6. OPERATING COSTS

2014 2013£000 £000

Cost of sales 25,331 29,823Amortisation of intangible assets 4,504 3,683Impairment loss – 3,947Administration expenses 19,687 20,593

49,522 58,046

7. NET FINANCE COSTS

2014 2013£000 £000

Bank interest payable 1,793 1,490Bank interest receivable (108) –Unwinding of discount 1,884 1,691

Net finance costs 3,569 3,181


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8. INCOME TAX EXPENSE

2014 2013£000 £000

Corporation tax:Overseas tax on profits for the period 2,736 3,839Adjustments to overseas corporation tax in respect of previous periods (628) (575)

Current tax charge for the period 2,108 3,264

Deferred tax:Origination and reversal of timing differences 215 (556)Adjustment in respect of previous periods (tax losses recognised) – –Adjustments in respect of previous periods (timing difference recognised) (901) (34)

Total deferred tax (686) (590)

Tax charge for the year 1,422 2,674

The tax charge below differs from the tax at the effective rate on the profit for the year. The differences are explainedbelow:

2014 2013£000 £000


Tax on profit on ordinary activities at 25% (2013 - 25%) 2,044 3,975

Effects of:

Net expenses not deductible 2,808 1,185Current period losses unrecognised – 291Recognition of previously unrecognised losses (104) –Tax effect of share of result of asociates (175) (317)Utilisation of brought forward losses unrecognised (80) (73)Effect of tax rates in overseas jurisdictions (667) (1,948)Over provision in respect of prior periods (1,529) (608)Current period (credit)/charge for current and historic exposures (875) 169

Tax on profit on ordinary activities 1,422 2,674

Tax (credit)/charge recognised directly in equity

2014 2013£000 £000

Current tax on exercised employee share options 557 88Deferred tax on losses and prepaid expenses (23) –Deferred tax on intangible assets (292) 160Deferred tax on unexercised employee share options (450) 441

Total tax recognised in equity (208) 689


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9. DIVIDENDS

2014 2013£000 £000

Dividend paid in cash or scrip2013/2012 interim dividend (2.3p / 2.2p per share) 2,179 2,0502013/2012 final dividend (5.0p / 4.6p per share) 4,996 4,377

7,175 6,427

Dividend paid and proposed post year end2014/2013 interim dividend paid (2.4p / 2.3p per share) 2,416 2,1792014/2013 final dividend proposed (5.4p / 5.0p per share) 5,494 4,989

7,910 7,168

An interim dividend of 2.4p per share (2013: 2.3p) was paid on 15 January 2015 to shareholders on the Register ofMembers of the Company as at 5 December 2014.

The directors announced the proposed final dividend for 2014, of 5.4p per share, on 4 March 2015. Subject toapproval at the Annual General Meeting on 22 June 2015, the proposed date of payment is 8 July 2015 toShareholders on the Register of Members as at 29 May 2015.

Dividends are recognised as a liability in the period in which they are appropriately authorised and are no longer atthe discretion of the entity.

10. EARNINGS PER SHARE2014 2013

pence pence

Basic earnings per share 5.0 12.2Diluted earnings per share 5.0 12.1Adjusted earnings per share 12.7 20.0Adjusted diluted earnings per share 12.6 19.7

Basic earnings per shareBasic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the year(as shown on the Consolidated Income Statement) and the weighted average number of ordinary shares in issueduring the period (see below table).

Diluted earnings per shareDiluted earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the year(as shown on the Consolidated Income Statement) and the diluted weighted average number of ordinary shares inissue during the period (see below table):

Weighted average number of ordinary shares (diluted):


Weighted average number of ordinary shares 99,643,016 94,636,411Dilutive effect of share options 540,814 1,238,069

Weighted average number of ordinary shares (diluted) 100,183,830 95,874,480

Dilutive share options were determined using the average closing price for the period. The average share price usedwas 212.68 pence.


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10. EARNINGS PER SHARE (CONTINUED)

Adjusted earnings per shareAdjusted earnings per share is calculated using adjusted profit after tax as reconciled in note 3 and the weightedaverage number of ordinary shares (as above) in issue in the year.

Adjusted diluted earnings per shareAdjusted diluted earnings per share is calculated using adjusted profit after tax as reconciled in note 3 and theweighted average number of diluted ordinary shares (as above) in issue in the year.

11. PROPERTY, PLANT AND EQUIPMENT

Computer Motor Fixtures Totalequipment vehicles and fittings

£000 £000 £000 £000

COSTAt 1 January 2013 2,844 89 1,611 4,544Additions 151 1 109 261Additions through business acquisitions 44 48 27 119Disposals (120) (22) (118) (260)Foreign exchange (13) (31) (59) (103)

At 31 December 2013 2,906 85 1,570 4,561Additions 243 89 323 655Disposals (785) (65) (80) (930)Foreign exchange (6) (1) 13 6

At 31 December 2014 2,358 108 1,826 4,292

DEPRECIATIONAt 1 January 2013 2,067 14 1,039 3,120Charge for the year 408 23 182 613Eliminated on disposal (156) (10) (112) (278)Foreign exchange (45) (37) (51) (133)

At 31 December 2013 2,274 (10) 1,058 3,322Charge for the year 420 16 99 535Disposals (811) 29 (69) (851)Foreign exchange (2) (1) 11 8

At 31 December 2014 1,881 34 1,099 3,014

NET BOOK VALUEAt 31 December 2012 777 75 572 1,424

At 31 December 2013 632 95 512 1,239

At 31 December 2014 477 74 727 1,278


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12. INTANGIBLE ASSETS

Goodwill Trademarks, Totallists and other

£000 £000 £000COSTAt 1 January 2013 95,411 34,208 129,619Additions through business acquisitions 1,360 1,983 3,343Additions – 6,231 6,231Reclassifications (180) 180 –Foreign exchange (4,969) (1,670) (6,639)

At 31 December 2013 91,622 40,932 132,554Additions through business acquisitions 20,640 8,552 29,192Additions – 1,121 1,121Foreign exchange 1,317 1,803 3,120

At 31 December 2014 113,579 52,408 165,987

AMORTISATIONAt 1 January 2013 10,039 16,988 27,027Impairment 3,007 940 3,947Charge for the year – 3,683 3,683Reclassifications (1,553) 1,553 -Foreign exchange 208 (278) (70)

At 31 December 2013 11,701 22,886 34,587Charge for the year – 4,504 4,504Foreign exchange (750) 890 140

At 31 December 2014 10,951 28,280 39,231

NET BOOK VALUEAt 31 December 2012 85,372 17,220 102,592

At 31 December 2013 79,921 18,046 97,967

At 31 December 2014 102,628 24,128 126,756

Goodwill and impairment

The goodwill of £102.6 million relates to certain assets that cannot be separated from the acquiree, due to theirnature. These items include sector knowledge, access to new markets and the anticipated future profitability thatthe Group can bring to the businesses and events acquired.

The Group tests goodwill annually for impairment. The carrying value of goodwill represents amounts related toseveral cash-generating units (“CGU”).

The recoverable amounts of the CGU are determined from value in use calculations. The key assumptions for thevalue in use calculations are those regarding discount rates, growth rates and expected changes to selling prices anddirect costs during the period. Management estimates discount rates using pre-tax rates that reflect current marketassessment of the time value of money and the risks specific to each CGU. The growth rates are based onmanagement’s forecasts for the three years to 2017, supported by industry forecasts. Cash flow forecasts areprepared from the most recent financial plans approved by the Board. Growth rates of 3% have been applied toperiods beyond the three year management supplied figures (2013: 3%). Management have made the judgementthat this long-term growth rate does not exceed the long-term average growth rate for the industry.

The pre-tax rate used to discount cash flow forecasts for the Group is 9.09% (2013: 10.47%). Management haveapplied country specific rates which vary from 8.33% - 10.97%.


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12. INTANGIBLE ASSETS (CONTINUED)

The sensitivity tests were run against the base numbers:

• Calculation of discounted NPV at the Group calculated WACC +1% to check that there is sufficient headroom inthe WACC numbers; and

• NPV calculated using revenue figures 3% lower than the forecast submissions for 2015-2017, with nocorresponding cost savings assumed.

The sensitivity tests indicate no further impairment to be necessary, thus satisfying ourselves that there is sufficientheadroom in the final goodwill values.

As at 31 December 2014, the following units were carrying significant amounts of intangible assets:

MCII France F&E Off-Price Turkey Other* Total£000 £000 £000 £000 £000 £000 £000

Goodwill 34,930 7,905 12,649 7,199 20,941 19,004 102,628Trademarks 8,764 302 1,497 – 2,099 4,217 16,879Lists 579 279 260 – 582 441 2,141Other – – 3,704 – – 1,404 5,108

As at 31 December 2014 44,273 8,486 18,110 7,199 23,622 25,066 126,756

As at 31 December 2013 28,559 8,766 18,491 6,770 22,566 12,815 97,967

*The main components of “Other” are Labels, D H Publishing, Tarsus Travel and TSNN.

Intangible assets

Intangible assets consist of trademarks and customer lists acquired in business combinations or separately andrepresent their fair value at the date of acquisition.

Amortisation

The trademarks and customer lists have been determined to have definite useful lives and are being amortised,over 20 years and 10 years respectively, on a straight line basis, except for those items in France which have usefullives of 10 years and 5 years respectively.

The remaining amortisation period for trademarks in MCII is 13 years, France 3 years, F&E 5 years and Turkey 18years. For lists, the remaining amortisation period in MCII is 3 years, F&E 4 years and Turkey 8 years.

An amortisation expense of £4.5 million (2013: £3.7 million) and impairment charge of £nil (2013: £3.9 million), hasbeen recorded in the current period income statement.


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13. INVESTMENT IN JOINT VENTURES

The nature of the activities of all Tarsus Group plc’s joint ventures is engaging in exhibitions, which are seen ascomplementing the Group’s operations and contributing to achieving the Group’s overall strategy.

Details of material associatesDetails of each of the Group’s material associates at the end of the reporting period are as follows:

Place of Proportion of ownershipincorporation interest/voting rights heldand principal by the groupplace of

Name of associate Principal activity business 2014 2013

Tarsus Jiuzhou Exhibition andConvention Company Limited Trade exhibitions China 50% 50%(“GZ Auto”)

E.J. Krause Tarsus Events LLC Trade exhibitions USA/Mexico 50% 50%(“EJ Krause”)

Pursuant to a shareholder agreement, the Group has the right to cast 50% of the votes at shareholder meetings ofthe above companies.

Both of the above associates are accounted for using the equity method in these consolidated financial statementsas set out in the Group’s accounting policies in note 1.

GZ Auto E J Krause Total£000 £000 £000

Investment as at 1 January 2014 12,035 3,397 15,432Profit for the period 117 581 698Transfers (317) – (317)FX movements 27 84 111

Investment as at 31 December 2014 11,862 4,062 15,924

Amounts included in transfers relates to balances in corporation tax creditors at 31 December 2013 relating to thejoint venture.

The other summary information below in respect of each of the Group’s material associates represents amountsincluded in the IFRS financial statements of the associate, not the entity’s share of these amounts, although they areadjusted to reflect fair value adjustments upon acquisition or accounting policy alignments.

GZ Auto E J Krause2014 2013 2014 2013£000 £000 £000 £000

Current assets 4,641 3,358 1,843 –Non-current assets – – 5,774 5,430Current liabilities (3,074) (2,200) (15) –Non-current liabilities – – – –

Equity attributable to owners of theCompany 1,567 1,158 7,602 5,430


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13. INVESTMENT IN JOINT VENTURES (CONTINUED)

As at 31 December 2014


Revenue 3,485 5,195 8,680

Profit before tax 410 1,810 2,220Taxation (175) (648) (823)

Profit after tax 235 1,162 1,397

As at 31 December 2013


Revenue 4,708 – 4,708

Profit before tax 2,664 – 2,664Taxation (132) – (132)

Profit after tax 2,532 – 2,532

14. DEFERRED TAX

Temporary differences between the carrying value of assets and liabilities in the statement of financial position andtheir relevant value for tax purposes result in the following deferred tax assets and liabilities:

Movementin temporary Balance Movement

differences Sheet in temporaryRecognised recognised reclassifi- differences

2013 in goodwill in income cation in equity 2014£000 £000 £000 £000 £000 £000

Tangible assets 25 – (50) 24 – (1)Intangible assets/goodwill 1,069 – 53 – 56 1,178Provisions 14 – 1 – – 15Prepaid expenses – – – 2,590 – 2,590Unexercised employee shareoptions 1,561 – (107) – (450) 1,004Tax losses 34 – 247 – (61) 220

Deferred tax assets 2,703 – 144 2,614 (455) 5,006

Intangible assets (6,161) (1,217) (317) – (348) (8,043)Prepaid expenses 1,712 – 859 (2,614) 38 (5)

Deferred tax liabilities (4,449) (1,217) 542 (2,614) (310) (8,048)

Total deferred tax assetsand liabilities (1,746) (1,217) 686 – (765) (3,042)




14. DEFERRED TAX (CONTINUED)Movement Foreign

in temporary exchange Balance Movementdifferences movements Sheet in temporary

Recognised recognised recognised reclassifi- differences2012 in goodwill in income in income cation in equity 2013£000 £000 £000 £000 £000 £000 £000

Tangible assets 7 – (22) 40 – – 25Intangible assets/goodwill 201 – (2,707) – 3,543 32 1,069Provisions 15 – – (1) – – 14Unexercised employee shareoptions 865 – 169 – 86 441 1,561Tax losses 34 – – – – – 34

Deferred tax assets 1,122 – (2,560) 39 3,629 473 2,703

Intangible assets (3,585) (503) 1,286 – (3,544) 185 (6,161)Prepaid expenses (344) – 1,865 (40) 288 (57) 1,712

Deferred tax liabilities (3,929) (503) 3,151 (40) (3,256) 128 (4,449)

Total deferred tax assetsand liabilities (2,807) (503) 591 (1) 373 601 (1,746)

Deferred tax assets have not been recognised in respect of certain tax losses because it is not probable that futuretaxable profits will be available which will allow the Group to use the potential tax benefits related to these losses.Where a temporary difference arises between the tax base of employee share options and their carrying value, adeferred tax asset should be recognised.

To the extent that the future tax deduction exceeds the related cumulative IFRS 2 Share-based Payment (“IFRS 2”)expense, the excess of the associated deferred tax balance is recognised directly in equity. To the extent that the taxdeduction matches the cumulative IFRS 2 expense, the associated deferred tax balance is recognised in the incomestatement.

2014 2013£000 £000

Unrecognised deferred tax assetCapital losses 384 384Trade losses 102 393Non-trade losses 948 728

1,434 1,505


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15. TRADE AND OTHER RECEIVABLES

2014 2013£000 £000

Trade debtors 19,869 17,510Prepaid event costs 3,749 2,830Prepayments and accrued income 6,014 3,839Fair value of interest rate swaps – 92Other debtors 2,546 759

32,178 25,030

Trade debtors disclosed above are classified as loans and receivables and are therefore measured at amortisedcost. See note 23 for more details.

16. CASH AND CASH EQUIVALENTS

2014 2013£000 £000

Cash at bank 12,347 12,142

Cash and cash equivalents 12,347 12,142

17. TRADE AND OTHER PAYABLES

2014 2013£000 £000

Trade creditors 6,933 5,831Other taxes and social security 1,207 1,335Fair value of interest rate swaps 818 –Other creditors 5,822 2,076Accruals 6,002 11,010Current contingent consideration 7,879 6,084

28,661 26,336

Trade creditors and accruals comprise amounts outstanding for trade purchases and ongoing costs. The Directorsconsider that the carrying amount of trade creditors approximates to their fair value. See note 23 for more details.




18. OVERDRAFTS AND OTHER INTEREST-BEARING LOANS AND BORROWINGS

This note provides an analysis of and information about the contractual terms of the Group’s interest-bearing loansand borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see note23. During the year the Group’s banking facilities were extended through to 2019 with improved terms.

The Group’s net debt at 31 December 2014 was £38.4 million (2013: £28.6 million). The repayment profile of theGroup’s loans and overdrafts was as follows:

2014 2013£000 £000

Less than one yearBank loans – –

One to two yearsBank loans – –

Two to five yearsBank loans 50,957 41,800

Total financial liabilities 50,957 41,800

Cash balances (12,347) (12,142)

Net financial liabilities and cash balances 38,610 29,658

Capitalised bank fees (1,018) (937)Fair value of interest rate swaps (note 15 &17) 818 (92)

Net debt 38,410 28,629

2014 2013£000 £000

Current liabilitiesSecured bank loans – –

Non-current liabilitiesSecured bank loans 50,957 41,800

Total financial liabilities 50,957 41,800

The bank loans are secured by a fixed and floating charge over the undertakings and property of certain subsidiaries.The parent and subsidiaries also act as guarantors for the loans. The security provided is the equity of all subsidiaryoperations and therefore the carrying value of securitised assets is equivalent to the Group net assets.


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19. NON-CURRENT LIABILITIES – OTHER PAYABLES

2014 2013£000 £000

Contingent consideration 8,928 4,104Provisions 56 30Long term licence fee 5,582 6,457Put and call option liabilities over non-controlling interests 21,387 8,695

35,953 19,286

The put and call options relate to the acquisitions of Life Media, CYF Fuarcilik, Sada Komatek, SIUF, 3D Print and PTIA.

20. EMPLOYEE BENEFITS

Share-based payments

The Group has established a share option plan that entitles all employees to purchase shares in the Company.During 2014, further grants under the plan were made. In accordance with the scheme rules options are exercisableat the market price of the shares at the date of the grant once all vesting conditions have been met. Generally optionsvest over three years and include performance conditions related to the market price of the Company’s shares. Alloptions expire after 10 years. The Group has also established a long-term Share Acquisition Plan and Incentive Plans.

The terms and conditions of the plans are set out in the section of the Directors’ Remuneration Report. All optionsare settled by physical delivery of shares.

The number and weighted average exercise prices of share options and rights are as follows:

Weighted Weightedaverage averageexercise Number of exercise Number of

price options price options(pence) and rights (pence) and rights

2014 2014 2013 2013

Outstanding at the beginning of the period 141 6,588,166 53 6,924,365Forfeited during the period 12 (118,151) 137 (1,013,500)Exercised during the period 23 (1,330,154) 102 (978,321)Granted during the period 105 1,291,727 169 1,655,622

Outstanding at the end of the period 95 6,431,588 141 6,588,166

Exercisable at the end of the period 129 1,215,082 207 1,542,737

Number ofoutstanding

Option optionsrange and rights

38p to 100p 3,150,815101p to 300p 3,280,773

Total 6,431,588




20. EMPLOYEE BENEFITS (CONTINUED)

The fair value of services received in return for share options and rights granted are measured by reference to thefair value of share options and rights granted. The estimate of the fair value of the services received is measuredbased on the Black-Scholes and Monte Carlo Option Pricing models and expectations of early exercise areincorporated into this model. There are certain market conditions within the share option grants and additional non-market conditions for the Share Acquisition Plan. The likelihood of these conditions being met are incorporated inmeasuring the fair value of the options at their grant date.

The weighted average remaining contractual life of share options outstanding at the year end was 3.14 years.

Fair value Grant Grant Grant Grant Grant Grant Grant Grantof share date date date date date date date dateoptions and 05-Mar- 05-Mar- 24-Jun- 07-Mar- 08-Mar- 08-Apr- 03-Jun- 15-Oct-rights 14 14 14 13 13 13 13 13

Fair value for option orright at grant date (pence) 193 39 203 189 42 45 46 50Weighted average share priceat date of grant (pence) 208 208 223.8 207 207 228 226 238.5Weighted average exerciseprice (pence) 0 213.8 0 0 140 0 0 0Expected volatility 27.60% 28.70% 26.20% 29.00% 31.00% 28.70% 31.10% 30.10%Option/right life 3 Years 5 Years 3 Years 3 Years 5 years 3.14 Years 5 Years 5 YearsExpected dividends 3.40% 3.40% 3.20% 3.00% 3.00% 3.00% 3.00% 3.00%Risk-free interest rate 1.3824% 2.2445% 1.6212% 0.3757% 0.9107% 0.2941% 1.0631% 1.6268%

The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life ofthe share options), adjusted for any expected changes to future volatility due to publicly available information.

During the current period, £1.2m has been included within the income statement as a charge (2013: £1.0m).

The Group makes available a stakeholder pension scheme in accordance with its legal obligations, but does not itselfoffer any Group pension scheme.

21. CALLED UP SHARE CAPITAL

2014 2014 2013 2013Number £ Number £

000 £000 000 £000Authorised:Ordinary shares of 5p each 120,000 6,000 120,000 6,000

Allotted, called up and fully paid:At 1 January 95,948 4,797 95,433 4,772Scrip dividend 87 5 69 3Issue of shares 5,000 250 – –Exercise of share options 165 8 446 22

At 31 December 101,200 5,060 95,948 4,797

All shares are ordinary shares which have full voting rights and rights to dividends. Ordinary shareholders have theright to return of capital only in a solvent liquidation.

There are no shares reserved for issuance under the Group’s share option plan or for issuance relating to deferredconsideration on acquisitions.


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21. CALLED UP SHARE CAPITAL (CONTINUED)

On 13 February 2014, the Group announced the successful completion of the placing of 5,000,000 new ordinaryshares raising £9.6 million net of expenses.

As at 31 December 2014, 523,541 ordinary shares of 5.0p each were held in employee benefit trusts in relation toawards made under the Tarsus Group Long Term Share Acquisition Plan 2008.

During the year ended 31 December 2014, 164,826 ordinary shares of 5.0p each were issued under the Company’semployee share scheme.

22. OPERATING LEASES

The Group has lease agreements in respect of properties and office equipment, for which the payments extendover a number of years. Significant leases relate to the rental of the companies’ main offices. The total gross paymentsover the life of these leases, split by expiry date and type, are as follows:

At 31 December 2014 Property Other Total£000 £000 £000

Within one year 801 43 844Within two to five years 1,175 66 1,241

1,976 109 2,085

At 31 December 2013 Property Other Total£000 £000 £000

Within one year 753 33 786Within two to five years 1,670 108 1,778Within two to five years 46 – 46

2,469 141 2,610

23. FINANCIAL INSTRUMENTS

Exposure to credit, interest rate, currency and liquidity risk arises in the normal course of the Group’s business. TheGroup’s overall strategy to minimise this risk is discussed below.

Objectives, policies and proceduresTreasury operations are conducted within a framework of policies and guidelines authorised by the Board and aresubject to internal control procedures. The objectives of the framework are to provide flexibility whilst minimisingrisk and prohibiting speculative transactions or positions to be taken.

The Group’s principal financial instruments comprise bank loans, overdrafts and cash. The main purpose of thesefinancial instruments is to raise finance for the Group’s operations. The Group has various other financial assets andliabilities such as trade receivables, trade payables and consideration, which arise from its operations.

The main risks arising from the Group’s financial instruments are credit, interest rate, currency and liquidity risks. TheBoard reviews and agrees policies for managing these risks and they are summarised below.

Credit riskManagement has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Groupdoes not require collateral in respect of financial assets.




23. FINANCIAL INSTRUMENTS (CONTINUED)

At the year end, there were no significant concentrations of credit risk. The maximum exposure to credit risk isrepresented by the carrying amount of each financial asset in the statement of financial position. The Group investssome of its surplus funds in high quality liquid market instruments with a maturity no greater than three months. Toreduce the risk of counterparty default the Group deposits its surplus funds in approved high quality banks. Thecountries in which the Group operates do not always have banks with high credit ratings assigned by the internationalcredit rating agencies. In these situations, the Group aims to reduce the exposure to credit risk by minimising cashbalances held in these banks. Concentrations of credit risk with respect to customers are limited due to the Group’scustomer base being large and unrelated and in various geographical areas. Customers are assessed for creditworthiness and credit limits are imposed on customers and reviewed regularly.

Interest rate riskThe Group’s exposure to risk for changes in market interest rates relates primarily to the Group’s debt obligationsand the Group’s cash and cash equivalents. The Group minimises that risk by using a series of short and medium-term interest rate fixes and specific hedging instruments on its external bank debt including anticipated future debtdraw-downs. Approximately 68% (2013: 61%) of the external bank debt was hedged in this way.

Foreign currency riskThe Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in acurrency other than sterling. The currencies giving rise to this risk are principally the US dollar, Euro and TurkishLira.

The Group uses derivative financial instruments (forward exchange contracts) to hedge the risk exposure of foreigncurrencies. The use of financial derivatives is governed by the Group’s policies approved by the Board. Compliancewith policies and exposure limits is reviewed by the Board. The Group does not enter into financial instruments,including derivative financial instruments, for speculative purposes.

The Group does not hedge all of its foreign currency risk on sales and purchases, meaning that the Group’s tradingresults may be impacted by changes in prevailing exchange rates. The Group’s bank loans are currently drawn inSterling so there are no potential foreign exchange risks.

Liquidity riskThe Group’s funding strategy is to ensure that the business has sufficient resources to meet its various financialcommitments on an ongoing basis. It achieves this objective by actively monitoring its forecast cash flows andrequirements. The Group is cautious in its approach, applying appropriate sensitivities to both the quantum andtiming of its projections.

The Group manages its liquidity using operating cash deposits and external borrowing to ensure that it has sufficientand appropriate funds to meet both its immediate and longer term needs. Further details of external loans can befound in note 18.

Capital managementThe primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating andhealthy capital ratios in order to support its current business, and allow it to take advantage of developmentopportunities when they arise therefore allowing the Group to maximise Shareholder value at all times.

The Group manages its capital structure (Shareholders’ equity and long term debt) and makes adjustments to it, inlight of changes in economic conditions and development opportunities. To maintain or adjust the capital structure,the Group may adjust the dividend payment to Shareholders, return capital to Shareholders or issue new shares.No changes were made in the objectives, policies or processes during the years ending 31 December 2014 and 31December 2013.

Sensitivity analysisIn managing interest rate and foreign exchange risks the Group aims to reduce the impact of short term fluctuationson the Group’s earnings. Over the longer term, however, permanent changes in interest and foreign exchange rateswould have an impact on consolidated earnings.

It is estimated that a general increase of one percentage point in interest rates would decrease the Group’s profitbefore tax for the year ended 31 December 2014 by approximately £136,000 (2013: £124,000) and equity by£108,000 (2013: £109,000).


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It is estimated that a general increase of five percentage points in the value of sterling against other foreign currencieswould decrease the Group’s profit before tax for the year ended 31 December 2014 by approximately £194,000(2013: £203,000) and equity by £131,000 (2013: £123,000).

These sensitivities are considered representative of possible volatilities in interest rates and currency exchange ratesthat could be experienced in the next twelve months.

Estimation of fair valuesThe following summarises the major methods and assumptions used in estimating the fair values of financialinstruments reflected in the table.

Interest bearing loans and borrowingsFair value is calculated based on discounted expected future principal and interest cash flows.

Forward foreign currency contractsFair value is calculated by reference to prevailing market exchange rates and forecast currency values at maturitydate.

Contingent consideration and put and call option liabilitiesFair value is calculated based on discounted expected future cash flows.

Trade and other receivables/payablesThe directors consider that the carrying amount of these balances approximates to their fair value.

The only allowance maintained by the Group for credit losses relate to allowances for bad and doubtful debts relatingto trade receivables. This can be summarised as follows:

2014 2013£000 £000

Allowance for doubtful receivablesAs at 1 January 863 622Additions - charged to income statement 341 304Allowances used (358) (63)

As at 31 December 846 863

2014 2013£000 £000

Aging profile of unimpaired trade receivablesNot past due 14,541 12,609Past due 31-90 days 2,374 2,317Past due 91-120 days 1,102 655Past due more than 120 days 1,852 1,929

19,869 17,510

Trade receivables presented in the Statement of Financial Position are net of allowances for doubtful receivables. Theallowance for doubtful receivables is estimated by the Group’s management based on prior experience, individualcredit issues and an assessment of the current economic situation. Trade receivables comprise balances from alarge number of individual customers, in many diverse industries and geographical areas. The Group’s exposure tocredit risk is therefore affected by the individual customer characteristics.

The Group makes an allowance for doubtful allowances when there is objective evidence that the debt will not becollected in full. The allowance is recognised and measured as the difference between the asset’s carrying amountand the present value of future cash flows.





Interest rates used for determining fair valueIn determining the fair value of financial instruments the Group uses a market rate of interest at the balance sheetdate.

The fair values together with the carrying amounts shown in the Statement of Financial Position are as follows:

Note Carrying Fair Carrying FairAmount value amount value

2014 2014 2013 2013£000 £000 £000 £000

Trade and other receivables 15 22,415 22,415 18,269 18,269Cash and cash equivalents 16 12,347 12,347 12,142 12,142Trade and other payables 17 (12,755) (12,755) (7,907) (7,907)Accruals 17 (6,002) (6,002) (11,010) (11,010)Interest rate swaps 17 (818) (818) 92 92Secured bank loans 18 (50,957) (50,957) (41,800) (41,630)Contingent consideration 17,19 (16,807) (16,807) (10,188) (10,188)Put and call option liabilities 19 (21,386) (21,386) (8,695) (8,695)

(73,963) (73,963) (49,097) (48,927)

Unrecognised gains – 170

It is the Directors’ opinion that the carrying value of trade receivables and trade payables approximates their fairvalue.

Categories of financial instruments

Financialliabilities

measured at Fair valueLoans and amortised through Total

receivables cost profit or loss 2014£000 £000 £000 £000

Trade and other receivables 22,415 – – 22,415Cash and cash equivalents 12,347 – – 12,347Trade and other payables – (11,978) (777) (12,755)Accruals – (6,002) – (6,002)Interest rate swaps – – (818) (818)Secured bank loans – (50,957) – (50,957)Contingent consideration – – (16,807) (16,807)Put and call option liabilites – – (21,386) (21,386)

34,762 (68,937) (39,788) (73,963)


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23. FINANCIAL INSTRUMENTS (CONTINUED)Financialliabilities

measured at Fair valueLoans and amortised through Total

receivables cost profit or loss 2013£000 £000 £000 £000

Trade and other receivables 18,269 – – 18,269Cash and cash equivalents 12,142 – – 12,142Trade and other payables – (7,907) – (7,907)Accruals – (11,010) – (11,010)Interest rate swaps – – 92 92Secured bank loans – (41,800) – (41,800)Contingent consideration – – (10,188) (10,188)Put and call option liabilites – – (8,695) (8,695)

30,411 (60,717) (18,791) (49,097)

Liabilities measured at fair value

2014 Level 1 Level 2 Level 3£000 £000 £000 £000

Interest rate swaps (818) – (818) –Forward contracts (777) – – (777)Contingent consideration (16,807) – – (16,807)Put and call option liabilities (21,386) – – (21,386)

(39,788) – (818) (38,970)

2013 Level 1 Level 2 Level 3£000 £000 £000 £000

Interest rate swaps 92 – 92 –Contingent consideration (10,188) – – (10,188)Put and call option liabilities (8,695) – – (8,695)

(18,791) – 92 (18,883)

Level 1 – fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – fair values measured using indicative market valuations provided by banks for the identifiable asset orliability

Level 3 – fair values measured using inputs or liabilities that are not based on observable market data. These aremeasured by using the latest management forecasts and using a country specific WACC rate to discount to thepresent value.





The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remainingperiod at the Statement of Financial Position date to the expected maturity date. The amounts disclosed in the tableare the contractual undiscounted cash flows.

31 December 2014 Less than Between 1 and Between 2 and1 year 2 years 5 years

£000 £000 £000

Bank borrowings – – 50,957Trade and other payables 12,755 – –Accruals 6,002 – –Contingent consideration 7,879 4,166 4,761Put and call option liabilities – 2,844 18,543

26,636 7,010 74,261

31 December 2013 Less than Between 1 and Between 2 and1 year 2 years 5 years

£000 £000 £000

Bank borrowings – – 41,800Trade and other payables 7,907 – –Accruals 11,010 – –Contingent consideration 6,084 3,449 655Put and call option liabilities – – 8,695

25,001 3,449 51,150

Effective interest rates and re–pricing analysisIn respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates theireffective interest rates at the year end and the periods in which they re-price.

2014 2013Notes Effective Six Effective Six

interest months interest monthsrate Total or less rate Total or less

£000 £000 £000 £000

Cash and cash equivalents 16 12,347 12,347 12,142 12,142

Sterling fixed 3.39% 50,957 50,957 4.14% 41,800 41,800

24. NON CASH ITEMS

2014 2013£000 £000

Scrip dividend (net of cost) 200 148


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25. CAPITAL COMMITMENTS

Other than those items included in the Statement of Financial Position there were no material capital and otherfinancial commitments in place at the year end. Further, there was no authorised but not contracted for capitalexpenditure at the year end.

26. RELATED PARTIES

Identity of related parties

Tarsus Group plc has a related party relationship with its subsidiaries (see note 27) and with its directors andexecutive officers.

Directors of the Company control 10.2% (2013: 10.6%) of the voting shares of the Company.

Executive officers also participate in the Group’s share option programme.

Trading transactions:

Director’s compensation is included in note 5 and within the Directors’ Remuneration Report.

Executive officers also participate in the Group’s share option programme.

27. INTEREST IN SUBSIDIARY UNDERTAKINGS

The Company is the holding company of the Group. The following are the subsidiary companies which principallyaffected the results or net assets of the Group. The full listing is available from the Company’s registered office.

Group holding Country ofand voting rights registration

per cent andName ordinary shares operation

Trading Companies

3D Print Show Limited 60 EnglandHubei O/N Hope Exhibition Services Limited 50 ChinaShenzhen Shengshi Juizhou Exhibition Co. Limited 50 ChinaTarsus Shanghai Exhibition Limited, Company 100 ChinaF&E (2008) Limited 100 CyprusDH Publishing Limited 100 EnglandFairs & Exhibitions (1992) Limited 100 EnglandF&E (2008) Limited 100 EnglandTarsus Exhibitions & Publishing Limited 100 EnglandTarsus Group Limited 100 EnglandTarsus Travel Exhibitions Limited 100 EnglandLe Groupe Evenement SAS 50 FranceTarsus France SAS 100 FranceLabel Expositions Private Limited 100 IndiaMetabolic Medical Institute Inc 100 United StatesTarsus Exhibitions India Private Limited 100 IndiaPT Infrastructure Asia 51 IndonesiaCYF Fuarcilik A.S. 70 TurkeyIstanbul Fuar Hizmetleri A.S. 100 TurkeyLifeMedia Fuarcilik A.S. 70 TurkeySada Uzmanlik Fuarlan Ticaret A.S. 60 TurkeyF&E LLC FZE 100 UAECaroo Development Inc 100 United StatesCaroo USA Inc 100 United States




27. INTEREST IN SUBSIDIARY UNDERTAKINGS (CONTINUED)

DMS Group LLC 100 United StatesMCI Opco LLC 100 United StatesOff-Price Specialists Center 100 United StatesTarsus Advon Holdings, LLC 100 United StatesTarsus Expositions Inc 100 United StatesTarsus Cardio Inc 100 United StatesTarsus Publishing Inc 100 United StatesTrade Show News Network Inc 100 United States

Holding and Dormant Companies

CapRegen Limited 100 EnglandCapRegen BioSciences Limited 100 EnglandCapRegen Magnum Limited 100 EnglandCapRegen Natural Biosciences Limited 100 EnglandCapRegen Nutraceuticals Limited 100 EnglandFairs & Exhibitions Limited 100 EnglandTarsus America Limited 100 EnglandTarsus Atlantic Limited 100 EnglandTarsus Cedar Limited 100 EnglandTarsus China Limited 100 EnglandTarsus Holdings Limited 100 EnglandTarsus Investments Limited 100 EnglandTarsus Leeward Limited 100 EnglandTarsus Luzhniki Limited 100 EnglandTarsus Martex (an unlimited company) 100 EnglandTarsus Medical Limited 100 EnglandTarsus Miller Hall Limited 100 EnglandTarsus New Media Limited 100 EnglandTarsus Organex Limited 100 EnglandTarsus Overseas Limited 100 EnglandTarsus Publishing Limited 100 EnglandTarsus Touchstone Limited 100 EnglandTarsus UK Holdings Limited 100 EnglandTarsus US Limited 100 EnglandTarsus Windward Limited 100 EnglandThe W R Kern Organisation Limited 100 EnglandTarsus France Holdings SAS 100 FranceTarsus Asia Pacific Limited 100 Hong KongTarsus Cedar (Ireland) Limited 100 IrelandTarsus Ireland Finance Limited 100 IrelandTarsus Ireland Investments Limited 100 IrelandWillismount Limited 100 IrelandCedar Danismanlik Hizmetleri A.S. 100 TurkeyMedical Conferences International Inc. 100 United StatesMontana Street Consultants Inc 100 United StatesNatural Biosciences Inc 100 United StatesTarsus Atlantic Holdings LLC 100 United StatesTarsus GEP Inc 100 United StatesTarsus Partners 100 United StatesTarsus Spacifically Inc 100 United StatesTarsus US Holdings, Inc. 100 United States

The Group has consolidated the results of Hubei O/N Hope Exhibition Services Limited and Shenzhen ShengshiJuizhou Exhibition Co. Limited, in which it holds 50% of the issued share capital, as it has ultimate control over themanagement and strategic direction of the company.


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28. ACQUISITION OF SUBSIDIARY

i) On 7 February 2014, the Group acquired 100% of the trade and assets of Cardiometabolic Health Congress(“CMHC”), an exhibition business.

The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value tothe Group, in respect of this acquisition:

Book value Adjustments Fair value£000 £000 £000

Property, plant and equipment – – –Other intangibles – 2,772 2,772Trade and other receivables – – –Cash and cash equivalents – – –Trade and other payables (247) (150) (397)Deferred tax liability – (186) (186)

(247) 2,436 2,189

Net assets acquired 2,189Goodwill arising on acquisition 5,868

8,057Consideration paid and costs incurred:Satisfied in cash 6,942Contingent consideration (less than one year) 1,115Contingent consideration (over one year) 0

Total consideration incurred 8,057

Consideration paid in cash 6,942Cash acquired –

Total net cash outflow 6,942

The values used in the accounting for the identifiable assets and liabilities and related contingent consideration ofthis acquisition are estimates and are therefore provisional in nature at the balance sheet date. Since the release ofthe Interim Financial Statements the Group has reviewed the values used in accounting for the intangible assets,goodwill and liabilities related to the acquisition. The change in the acquisition accounting estimates has changeddue to more accurate forecasts on the performance of CMHC, and are therefore measurement period adjustments.

From the date of acquisition to 31 December 2014, the acquisition has contributed £2.6 million of revenue to theGroup.

Goodwill of £5.9 million, recognised on this acquisition, relates to certain assets that cannot be separated and reliablymeasured. These items include sector knowledge, relationships of key staff members with customers, access to newmarkets and the anticipated future profitability that the Group can bring to the business acquired. Consistent withother media companies, goodwill makes up a large percentage of the fair value of the acquisition.

The Group incurred transaction costs of £175,000 in respect of the acquisition, which were expensed.

ii) On 5 February 2014, the Group acquired 60% of the share capital of Sada Uzmanhk Fuarlari A.S. (“Sada”), anexhibition business.





28. ACQUISITION OF SUBSIDIARY (CONTINUED)


Property, plant and equipment 3 – 3Other intangibles – 560 560Trade and other receivables 70 – 70Cash and cash equivalents 74 – 74Trade and other payables (44) – (44)Deferred tax asset – – –Deferred tax liability – (112) (112)

103 448 551Non–controlling interest (40%) (220)

Net assets acquired 331Goodwill arising on acquisition 1,351

1,682Consideration paid and costs incurred:Satisfied in cash 1,407Stamp duty paid 81Contingent consideration (less than one year) –Contingent consideration (over one year) 194


Consideration paid in cash 1,407Cash acquired (74)


Tarsus and the vendor hold put/call options over the remaining 40% of the shares of the business, exercisable fromnow until 2019 and enforceable by either party, with consideration payable based on a multiple of annualised EBITin the relevant year. The Group has recognised a liability for this in accordance with IAS 32, “Financial Instruments”,with a corresponding debit in equity. The non-controlling interest is measured at their proportionate share of the fairvalue of net assets.

Contingent consideration, relates to payments to vendors, payable after completion, that are dependent on theoutcome of future events. This contingent consideration is dependent on the future financial performance of theexhibition occurring in 2015 and 2017.

From the date of acquisition to 31 December 2014, the acquisition has contributed £nil of revenue to the Group, asthe event did not occur in 2014.


The Group incurred transaction costs of £96,000 in respect of the acquisition, which were expensed.

iii) On 18 March 2014, the Group acquired 50% of the share capital of Shenzhen Shengshi Jiuzhou Exhibition Co. Ltd(“SIUF”), an exhibition business.


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Property, plant and equipment – – –Other intangibles – 1,099 1,099Trade and other receivables 566 (174) 392Cash and cash equivalents 122 – 122Trade and other payables (505) – (505)Deferred tax asset – – –Deferred tax liability – (275) (275)

183 650 833Non-controlling interest (50%) (444)

Net assets acquired 389

Goodwill arising on acquisition 6,171

6,560Consideration paid and costs incurred:Satisfied in cash 3,857Contingent consideration (less than one year) 29Contingent consideration (over one year) 2,674


Consideration paid in cash 3,857Cash acquired (122)


The values used in the accounting for the identifiable assets and liabilities and related contingent consideration ofthis acquisition are estimates and are therefore provisional in nature at the balance sheet date. The non-controllinginterest is measured as their proportionate share of the fair value of net assets. Since the release of the InterimFinancial Statements the Group has reviewed the values used in accounting for the intangible assets, goodwill andliabilities related to the acquisition. The change in the acquisition accounting estimates has changed due to moreaccurate forecasts on the performance of SIUF, and are therefore measurement period adjustments.

Tarsus holds enforceable put/call options over a further 20% of the shares of the business, exercisable until May2015, with consideration payables based on a multiple of EBIT in the relevant year. Tarsus and the vendors holdput/call options over this 20%, if not already exercised by Tarsus, from the lapse date above for a further 12 months.Tarsus and the vendor hold a final put/call option for 30% of the shares of the business, exercisable until 2022. Eachoption has consideration payables based on a multiple of EBIT in the relevant year. The Group has recognised aliability for this in accordance with IAS 32, “Financial Instruments”, with a corresponding debit in equity. The non-controlling interest is measured at their proportionate share of the fair value of net assets.

Contingent consideration, relates to payments to vendors, payable after completion, that are dependent on theoutcome of future events. This contingent consideration is dependent on the future financial performance of theexhibitions occurring in 2015.

From the date of acquisition to 31 December 2014, the acquisition has contributed £2.6 million of revenue to theGroup.






The Group incurred transaction costs of £268,000 in respect of the acquisition.

iv) On 30 July 2014, the Group acquired 60% of the share capital of 3D Print Limited (“3D Print”), an exhibitionbusiness.



Property, plant and equipment 45 – 45Other intangibles – 1,695 1,695Trade and other receivables 293 – 293Cash and cash equivalents (49) – (49)Trade and other payables (619) – (619)Deferred tax liability – (339) (339)

(330) 1,356 1,026Non-controlling interest (40%) (410)

Net assets acquired 616Goodwill arising on acquisition 1,829

2,445Consideration paid and costs incurred:Satisfied in cash 520Contingent consideration (less than one year) 570Contingent consideration (over one year) 1,355


Consideration paid in cash 520Cash acquired (49)

Total net cash outflow 471

Tarsus and the vendor hold put/call options over the remaining 40% of the shares of the business, exercisable fromnow until 2017 by consent of both parties or from 2017 to 2020, enforceable by either party, with considerationpayables based on a multiple of annualised EBIT in the relevant year. The Group has recognised a liability for this inaccordance with IAS 32, “Financial Instruments”, with a corresponding debit in equity. The non-controlling interest ismeasured at their proportionate share of the fair value of net assets.

Contingent consideration, relates to payments to vendors, payable after completion, that are dependent on theoutcome of future events. This contingent consideration is dependent on the future financial performance of theexhibitions occurring in 2015 and 2016.

From the date of acquisition to 31 December 2014, the acquisition has contributed £0.6 million of revenue to the Group.

Goodwill of £1.8million, recognised on this acquisition, relates to certain assets that cannot be separated and reliablymeasured. These items include sector knowledge, relationships of key staff members with customers, access to newmarkets and the anticipated future profitability that the Group can bring to the business acquired. Consistent withother media companies, goodwill makes up a large percentage of the fair value of the acquisition.



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v) On 10 November 2014, the Group acquired 100% of the trade and assets of South Beach Symposium (“SBS”), anexhibition business.



Property, plant and equipment – – –Other intangibles – 1,857 1,857Trade and other receivables – – –Cash and cash equivalents – – –Trade and other payables (109) – (109)Deferred tax asset – – –Deferred tax liability – (141) (141)

(109) 1,716 1,607

Net assets acquired 1,607Goodwill arising on acquisition 4,851

6,458Consideration paid and costs incurred:Satisfied in cash 3,388Contingent consideration (less than one year) 321Contingent consideration (over one year) 2,749


Consideration paid in cash 3,388Cash acquired –


From the date of acquisition to 31 December 2014, the acquisition has contributed £nil of revenue to the Group,since no event has taken place since acquisition.


Contingent consideration, relates to payments to vendors, payable after completion, that are dependent on theoutcome of future events. This contingent consideration is dependent on the future financial performance of theonline revenues occurring in 2018.




TARSUS GROUP PLC – COMPANY INCOME STATEMENT

Notes Year to Year to31 December 31 December

2014 2013£000 £000

Operating costs excluding exceptional items 2 (2,021) (2,456)Exceptional operating costs 2 (443) (380)

Operating Loss (2,464) (2,836)

Other revenue 652 –Taxation expense – –

Loss for the financial year (1,812) (2,836)

TARSUS GROUP PLC – COMPANY STATEMENT OF COMPREHENSIVE INCOME


2014 2013£000 £000

Loss for the financial year (1,812) (2,836)

Total comprehensive loss for the year (1,812) (2,836)


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TARSUS GROUP PLC – COMPANY STATEMENT OF FINANCIAL POSITION


2014 2013£000 £000

NON-CURRENT ASSETSInvestments 3 45,150 45,150

45,150 45,150CURRENT ASSETSTrade and other receivables 4 7,325 21,158Cash and cash equivalents 57 4

7,382 21,162CURRENT LIABILITIESTrade and other payables 5 (2,375) (16,403)

NET CURRENT ASSETS 5,007 4,759

TOTAL ASSETS LESS CURRENT LIABILITIES 50,157 49,909

NON-CURRENT LIABILITIESTrade and other payables 6 (672) (672)

NET ASSETS 49,485 49,237

EQUITYShare capital 7 5,060 4,797Share premium account 47,424 37,689Retained earnings (2,999) 6,751

TOTAL EQUITY 49,485 49,237

The financial statements of Tarsus Group plc, registered number 101579 ( Jersey), were approved by the board andauthorised for issue on 4 March 2015 and signed on its behalf by:

J D Emslie D P O’BrienGroup Managing Director Group Finance Director



TARSUS GROUP PLC – COMPANY STATEMENT OF CASH FLOWS


2014 2013£000 £000

Cash flows from operating activitiesLoss for the year (1,812) (2,836)Adjustments for:Share option charge 1,180 1,041Other losses (1,712) –

Operating cash flow before changes in working capital (2,344) (1,795)

Decrease in trade and other receivables 13,837 12,864(Decrease)/ increase in trade and other payables (13,445) (2,189)

Cash inflow/(outflow) generated from operations (1,952) 8,880

Net cash inflow/(outflow) from operating activities (1,952) 8,880

Cash flows from investing activitiesAcquisition of investments – (2,493)Deferred and contingent consideration paid (586) –Proceeds from the issue of share capital 10,000 –Cost of shares issued (388) (76)Dividends paid to shareholders (6,975) (6,279)

Net cash (outflow)/inflow from investing activities 2,051 (8,848)Net (decrease)/increase in cash and cash equivalents 99 32Opening cash and cash equivalents 4 5Foreign exchange gain (46) (33)

Closing cash and cash equivalents 5 57 4


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TARSUS GROUP PLC – statement of changes in equity

Share Share Retained TotalCapital Premium Earnings

Account Reserve£000 £000 £000 £000

As at 31 December 2014Loss attributable to shareholders – – (1,812) (1,812)

Total comprehensive expense for the period – – (1,812) (1,812)

Scrip dividend 5 195 – 200New share capital subscribed 258 9,927 – 10,185Cost of shares issued – (387) – (387)Other movement in reserves – – (1,943) (1,943)Share option charge – – 1,180 1,180Dividend paid – – (7,175) (7,175)

Net change in shareholders’ funds 263 9,735 (9,750) 248Opening equity shareholders’ funds 4,797 37,689 6,751 49,237

Closing equity shareholders’ funds 5,060 47,424 (2,999) 49,485

Share Share Retained TotalCapital Premium Earnings

Account Reserve£000 £000 £000 £000

As at 31 December 2013Loss attributable to shareholders – – (2,836) (2,836)

Total comprehensive income (expense) for the period – – (2,836) (2,836)

Scrip dividend 3 144 – 147New share capital subscribed 22 61 – 83Other movement in reserves – – 49 49Share option charge – – 1,041 1,041Dividend paid – – (6,427) (6,427)

Net change in shareholders’ funds 25 205 (8,173) (7,943)Opening equity shareholders’ funds 4,772 37,484 14,924 57,180

Closing equity shareholders’ funds 4,797 37,689 6,751 49,237



notes to the financial statements of TARSUS GROUP PLC

1. ACCOUNTING POLICIES

Where applicable the accounting policies of the Company are the same of those of the Group, as stated on pages85 to 91.

2. OPERATING PROFIT

2014 2013£000 £000

Operating loss is stated after charging:

Personnel expenses (note 9) 347 403Foreign exchange (gain)/losses (7) (32)Other expenses 501 1,044Share option charge 1,180 1,041

2,021 2,456

Exceptional costs 443 380

In 2014, exceptional one-off costs of £0.4 million resulting from acquisitions or potential acquisitions were incurred.

3. INVESTMENTS

As at 31 December 2014, the Company had the following 100% investments:

2014 2013£000 £000

Tarsus Luzhniki Limited 10,409 10,409MCI Opco LLC 6,636 6,636IFO Istanbul Fuar Hizmetleri AS 10,852 10,852Tarsus UK Holdings Limited 17,253 17,253Tarsus Ireland Investments Limited – –Tarsus Ireland Finance Limited – –

45,150 45,150

4. TRADE AND OTHER RECEIVABLES

2014 2013£000 £000

Amounts due from subsidiary undertakings 7,295 21,113Prepayments 6 14Other debtors – 11Taxation and social security 24 20

7,325 21,158


Tarsus Group plc126

notes to the financial statements of TARSUS GROUP PLC (continued)

5. TRADE AND OTHER PAYABLES

2014 2013£000 £000

Amounts due to subsidiary undertakings 1,409 14,599Trade payables 168 92Accruals 706 1,040Contingent consideration 87 672Other creditors 5 –

2,375 16,403

6. NON CURRENT LIABILITIES

2014 2013£000 £000

Contingent consideration 672 672

672 672

The Company is a guarantor in respect of Group borrowings.

7. CALLED UP SHARE CAPITAL

2014 2014 2013 2013Number Number

000 £000 000 £000Authorised:Ordinary shares of 5.0p each 120,000 6,000 120,000 6,000

Allotted, called up and fully paid:At 1 January 95,948 4,797 95,433 4,772Scrip dividend 87 5 69 3Issue of shares 5,000 250 – –Exercise of share options 165 8 446 22Issue of shares for employee share option schemes – – – –

At 31 December 101,200 5,060 95,948 4,797

All shares are ordinary shares which have full voting rights and rights to dividends. Ordinary shareholders have theright to return of capital only in a solvent liquidation.

There are no shares reserved for issuance under the Group’s share option plan or for issuance relating to deferredconsideration on acquisitions.

On 13 February 2014, the Group announced the successful completion of the placing of 5,000,000 new ordinaryshares raising £9.6 million net of expenses.

As at 31 December 2014, 523,541 ordinary shares of 5.0p each were held in employee benefit trusts in relation toawards made under the Tarsus Group Long Term Share Acquisition Plan 2008.

During the year ended 31 December 2014, 164,826 ordinary shares of 5.0p each were issued under the Company’semployee share scheme.




8. DIVIDENDS

2014 2013£000 £000

Dividend paid in cash or scrip2013/2012 final dividend (5.0p/ 4.6p per share) 2,179 4,3772013/2012 interim dividend (2.3p/ 2.2p per share) 4,996 2,050

7,175 6,427

Dividend paid and proposed post year end2014/2013 interim dividend paid (2.4p/ 2.3p per share) 2,416 2,1792014/2013 final dividend proposed (5.4p/ 5.0p per share) 5,494 4,989

7,910 7,168

An interim dividend of 2.4p per share (2013: 2.3p) was paid on 15 January 2015 to shareholders on the Register ofMembers of the Company on 5 December 2014.

The directors announced the proposed final dividend for 2014, of 5.4p per share, on 4 March 2015. Subject toapproval at the Annual General Meeting on 22 June 2015, the proposed date of payment is 8 July 2015 toShareholders on the Register of Members on 29 May 2015.

Dividends are recognised as a liability in the period in which they are appropriately authorised and are no longer atthe discretion of the entity.

9. PERSONNEL EXPENSES AND NUMBERS

The average number of persons employed by the Company, including Executive Directors, during the year was:


Directors 7 7

2014 2013£000 £000

Wages and salaries 320 362Social security costs 27 41

347 403

The aggregate directors’ remuneration for 2014 is £336,088 (2013: 393,000). Details in relation to total directors’remuneration for the Group are set out in the section of the Directors’ Remuneration Report reviewed by the auditorson pages 63 to 71.

10. CAPITAL COMMITMENTS

Other than those items included in the statement of financial position there were no material capital and otherfinancial commitments in place at the year end. Further, there was no authorised but not contracted for capitalexpenditure at the year end.


Tarsus Group plc128


11. FINANCIAL INSTRUMENTS

The carrying value of all financial instruments is considered to equate to their fair value. Financial risks are managedon a group basis and the parent company is not considered to be exposed to significant financial risks. All financialassets are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities andmeasured at amortised cost.

Credit riskCredit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial lossto the Company. For cash and cash equivalents, the Company only transacts with high quality banks. Other financialassets consist of amounts receivable which were not due past 31 December 2014.

Market riskThe Company’s activities expose it primarily to currency risk as some of its receivables from related parties are notdenominated in Sterling. It is estimated that a general increase of five percentage points in the value of Sterlingagainst other foreign currencies would decrease the Company’s result before tax by approximately £0.1 million.

12. RELATED PARTY TRANSACTIONS

Transactions resulting in amounts payable and receivable to subsidiaries of the Company are set out in notes 4,5 and6.

The principal transactions during the year with other Group companies relate to the recognition of foreign exchangefluctuations on intercompany balances; loss of £597,305 (2013: gain £400,808). The remaining movements inintercompany balances relate to the funding of costs incurred by other Group companies.



other information

Tarsus Group plcRegistered in Jersey, number 101579

DirectorsNeville Buch Executive ChairmanDouglas Emslie Group Managing DirectorDaniel O’Brien Group Finance DirectorDavid Gilbertson Non-executive DirectorTim Haywood Non-executive DirectorRobert Ware Non-executive Director

SecretarySimon Smith

Head Office Principal Bankers17 Upper Pembroke Street HSBC PlcDublin 2 1 Grand Canal SquareIreland Grand Canal Harbour

Dublin 2Registered Office Ireland44 EsplanadeSt Helier Bank of IrelandJersey JE4 9WG 40 Mespil Road

Dublin 4Financial Advisors and Stockbrokers IrelandInvestec Bank Plc2 Gresham Street Lloyds TSB Bank plcLondon EC2V 7QP 25 Gresham Street

London EC2V 7HNRegistrars and Transfer OfficeCapita Registrars ( Jersey) Limited Solicitors and Legal Advisors12 Castle Street Macfarlanes LLPSt Helier 20 Cursitor StreetJersey JE2 3RT London EC4A 1LT

UK Transfer Agent Ogier L.P.Capita Registrars 44 EsplanadeThe Registry St Helier34 Beckenham Road Jersey JE4 9WGBeckenhamKent BR3 4TU Auditors

Deloitte LLP2 New Street SquareLondon EC4A 3BZ

Financial Calendar28 May 2015 Ex-Dividend date29 May 2015 Record Date22 June 2015 Annual General Meeting8 July 2015 Final dividend payment

Dates correct at time of print, but subject to change.The Company’s website can be found at www.tarsus-group.com


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