AUDIT COMMITTEE

17 March 2022
 Tiger Acquisitions (Jersey) Limited

Agenda for a Meeting of the Audit Committee to be held Belgrave House, 76 Buckingham
Palace Road, London, SW1W 9TQ - Board Room on Thursday 17 March 2022 at 9:00am

1. Technical Accounting Updates

2. Deloitte Audit Report

3. Update on timetable in respect of the financial statements for the period ending 31
December 2021

4. Going Concern Review

5. Internal Audit Update

6. US Refunds

7. Any other business

 Tiger Acquisitions (Jersey) Limited
Registered company number: 129107
(the Company)

Minutes of a meeting of the Audit Committee of

the Company held by video conference
on 14 December 2021 at 12.15 p.m.

Present:
Peter Rigby (Chairperson)
Robert Leeming
Sami Kassam

In attendance:
Douglas Emslie
Dan O’Brien
Simon Smith
Mark Pennington

1. Notice

The chairperson reported that notice of the meeting had been given to all of the committee
members.

2. Quorum

The Chairman noted that a quorum was present and that the meeting could proceed.

3. Audit Plan 2021

The Audit Planning Report prepared by Deloitte LLP (“Deloitte”), the Company’s auditors, was
received and discussed.

Mark Pennington summarised the report that had been submitted to the Committee and explained
that the plan for the audit remained on target. The following key areas of focus for the audit were
noted and after due consideration approved:

 Scope of the audit and the entities covered

 Significant risks
 Materiality and significant risk areas

The independence of Deloitte as auditor was also considered and after due discussion it was resolved that
they continued to be independent for the purposes of the audit of the Group.

The strategy and plan for the audit in respect of the year ending 31 December 2021 was discussed
and approved.

……………………………………………………

Chairman
1. Technical Accounting Updates
 TARSUS GROUP – ACCOUNTING PAPER
SUBJECT Acquisitions
PREPARED BY Darren Powell
DATE March 2022

Introduction

The purpose of this paper is to outline the acquisitions detailed in the 2021 annual report.

Key information

The Group completed 5 acquisitions in the second half of the year. A summary of the financial information related
to each acquisition is outlined below:

Bodysite HKPCA Times Founder- Health Total

Aerospace made Connect
Partners
$000 $000 $000 $000 $000 $000

Intangibles 1,404 20,316 1,992 2,472 12,696 38,881

Net working capital (47) (45) 1 (210) (256) (556)
Identifiable net assets acquired 1,357 20,271 1,993 2,263 12,440 38,325

Put options over non-controlling interests - - (1,434) (2,107) (6,558) (10,099)

Non-controlling interests (543) (9,768) (976) (792) (4,976) (17,055)
Goodwill 2,098 6,689 2,127 4,699 11,895 27,508
Total consideration 2,913 17,192 1,711 4,063 12,800 38,678

Satisfied by:
Cash consideration 2,070 17,192 541 1,442 8,684 29,930
Contingent consideration 843 - 1,168 2,621 4,116 8,747
Total 2,913 17,192 1,710 4,063 12,800 38,678

Consideration for the acquisitions was a combination of cash consideration, and contingent consideration based
on future earnings. Such future consideration has been calculated based on budgeted financial information, as
approved by the board in December 2021. Where liabilities exist in greater than 1 year, these have been
discounted using appropriate discount rates.

Certain acquisitions included contractual put/call options within the sales & purchase agreements. These have
also been measured at fair value as at 31 December 2021.

Total Intangible assets of $39m including tradenames, customer lists, and software were identified across the
acquisitions. For Bodysite, HKPCA, and Health Connect Partners we engaged a specialist BDO valuations team to
assist with the valuation of intangible assets in accordance with IFRS 3. For Foundermade and Times Aerospace
this exercise was performed internally.
 TARSUS GROUP – ACCOUNTING PAPER
SUBJECT Impairment
PREPARED BY Darren Powell
DATE March 2022

Introduction

The purpose of this paper is to outline our considerations regarding impairment as at 31st December 2021, in
accordance with IAS 36.

Background

Following the acquisition of Tarsus Group Plc by CCP in 2019, a purchase price accounting exercise was undertaken
which resulted in the recognition of various intangible assets and goodwill across 12 cash generating units (CGU’s).

The intangible assets recognised are being amortised over a range of useful economic lives.

As at 31 December 2020 a goodwill impairment loss of $185m was recognised, as a result of the impact of Covid-
19 on the value in use of the CGUs.

IAS 36

According to IAS 36, paragraph 10, Goodwill is required to be tested for impairment annually (and also at any
reporting date when indicators of impairment are present). Management have elected to perform the
impairment tests annually on 31st December in conjunction with our reporting period end date.

The impairment test required by IAS 36 compares an asset’s (or CGU’s) carrying amount with its recoverable
amount. An asset’s (or CGU’s) recoverable amount is determined as being the higher of the asset’s (or CGU’s) fair
value less costs of disposal, or value in use.

An impairment is recognised when an asset’s (CGU’s) recoverable amount is lower than the asset’s (CGU’s)
carrying amount. Any impairments recognised are subsequently irreversible.
 CGU carrying amounts

IAS 36 defines the carrying amount of a CGU as follows:

Management have reviewed the Group consolidation and aggregated legal entities into their respective CGU’s in
order to calculate directly attributable assets, liabilities and working capital for each CGU. This has included the
following balances:
- Goodwill
- Intangibles
- PPE
- Deferred tax liabilities
- Trade and other receivables
- Trade and other payables
- Deferred income
- Cash

The following assets / liabilities were excluded from the CGU carrying values in accordance with IAS 36:
- Intercompany balances
- Investments
- Group borrowings
- Contingent consideration
- Put/call liabilities

The resulting CGU carrying values are as follows:

Carrying
value
USD 000's 31/12/21
Labels 139,186
Aerospace 87,054
Travel and education 22,401
Medical 184,690
Connect 86,604
Mexico 36,450
US Other 29,154
Hometex 73,771
Turkey 9,863
SIUF 15,589
China Other 21,127
SEA 38,619
Total 744,510
 Value in use

Management performed a risk analysis to determine high-risk CGU’s which had possible indicators of impairment.
For the high-risk CGU’s a specialist BDO valuations team was engaged to calculate the value in use for each CGU,
plus discount rates for all CGU’s. For the low-risk CGU’s management performed value in use calculations
internally. Refer to Appendix 1 for the BDO report and Appendix 2 for the associated detailed appendices. The
report includes a detailed description of the source data provided by management, and the methodology used to
BDO to arrive at the relevant inputs i.e. discount rates. Management have had several meetings with BDO
throughout the course of the report bring prepared, and have satisfied themselves that the value in use exercise
has been performed appropriately.

This included a review of key inputs used by BDO, in particular the discount rates applied. Management compared
against those applied at the time of the recent valuation exercises and the movements were considered to be
appropriate in the context of global economic developments over the past 24 months.

Post-tax Post-tax Post-tax

discount rates discount rates discount rates
Dec 2021 Dec 2020 Aug 2019
Labels 8.9% 8.2% 8.1%
Aerospace 10.2% 9.9% 9.2%
Travel and Education 9.6% 8.9% 9.3%
Medical 8.9% 8.2% 8.0%
US Travel 8.9% 8.2% 8.0%
Mexico 10.8% 9.7% 8.9%
US Other 8.9% 8.2% 8.0%
China Textiles 10.2% 9.5% 8.5%
Turkey 15.4% 13.9% 11.8%
China Fashion 10.2% 9.5% 8.9%
China Other 10.2% 9.5% 8.9%
South East Asia 10.8% 11.5% 11.0%

The underlying cash flow forecasts on which BDO prepared their value in use calculations were the 2022 budget
figures, as approved by the board of directors in December 2021. Please refer to the budget presentation dated
December 2021 which details Management’s assumptions in preparing the budgeted cashflows.

The resulting estimated value in use for each CGU is presented below:
 Value in use
31/12/21
USD 000's
Labels 105,609
Aerospace 94,586
Travel and education 13,877
Medical 206,616
Connect 86,987
Mexico 46,921
US Other 38,773
Hometex 80,300
Turkey 13,951
SIUF 19,098
China Other 24,434
SEA 33,715
Total 764,867

Various sensitivities relating to key sources of estimation uncertainty were calculated. Key uncertainties
include the speed of the recovery from the global Covid-19 pandemic, and changes to the key
assumptions on the discount rates and long-term growth rates. The specific sensitivities considered most
appropriate by management were a 0.5% increase to discount rate, and a 0.5% reduction in LTGR. The
resulting changes to impairment as a result of these sensitivities is as follows:

Long-term
Discount rate
growth rate
increase
reduction
$000 $000
Labels 8,256 6,677
Aerospace - -
Travel and Education 1,131 947
Medical - -
US Travel 5,057 4,529
Mexico - -
US Other - -
China Textiles - -
Turkey - -
China Fashion - -
China Other - -
South East Asia 2,025 1,537
Total Group 16,469 13,689

Fair value less costs to sell

Management have reviewed the following information regarding enterprise values for comparable companies In
order to satisfy themselves that FVLCTS is not higher than value in use. The most appropriate comparator group
has been determined as the average of Hyve Group plc and Informa plc. (Please note that some companies have
undertaken recapitalisation exercises during the period shown below and have therefore been excluded). Hyve
and Informa have demonstrated an average reduction in enterprise value of 5% over the period:
In comparison, the Group has seen an average reduction of 0.3% in aggregate during the period. Management are
therefore satisfied that value in use represents the highest value and most appropriate metric to use to calculate
recoverable value.

Conclusion

The results of the impairment test are as follows:

Carrying
Value in use
value Impairment Headroom
31/12/21
USD 000's 31/12/21
Labels 105,609 139,186 (33,577) -24% - -
Aerospace 94,586 87,054 - - 7,532 9%
Travel and education 13,877 22,401 (8,524) -38% - -
Medical 206,616 184,690 - - 21,926 12%
Connect 86,987 86,604 - - 383 0%
Mexico 46,921 36,450 - - 10,471 29%
US Other 38,773 29,154 - - 9,619 33%
Hometex 80,300 73,771 - - 6,529 9%
Turkey 13,951 9,863 - - 4,088 41%
SIUF 19,098 15,589 - - 3,508 23%
China Other 24,434 21,127 - - 3,307 16%
SEA 33,715 38,619 (4,904) -13% - -
Total 764,867 744,510 (47,005) -6% 67,362 9%

Each CGU has directly attributable goodwill over and above the impairment values noted, and therefore all
impairment losses will be attributed directly to goodwill. Tangible and identifiable intangibles will not incur any
impairment losses.

Management have considered the results carefully and corroborated any impairment values with understanding
of the operating environment in each CGU, particularly in light of Covid-19, but also other factors including
competitive environment and country specific issues. Management are therefore satisfied that it is appropriate to
impair goodwill as per the schedule above accordingly.
2. Deloitte Audit Report
Tiger Acquisitions
(Jersey) Limited
Status Report to the Audit Committee on the 2021 audit
Issued on 15 March 2022 for the Audit Committee on 17 March 2022
Contents

Partner introduction 3

Significant risks 4

Other significant findings 10

Control observations 11

Purpose of our report and responsibility statement 13

Appendices 14

2
Partner introduction
The key messages in this report
I have pleasure in presenting our Status Report to the Audit Committee in relation to the 2021 audit. This report should be read in conjunction
with our Planning Report to the Audit Committee dated 11 December 2021. I would like to draw your attention to the key messages of this
paper:

Status of our audit • At the date of issuing this report, our work is still ongoing in a number of key areas.
testing • We would like to draw your attention to the list of outstanding areas detailed on page 18. We will provide an update to
the outstanding matters and issue a formal update report to the Audit Committee before signing the financial
statements.
• Our work surrounding fraudulent activity is also ongoing, and detailed on page 10.
• We have reported to you only those uncorrected misstatements above the threshold of $90k, as detailed on page 15.

Materiality and • Final group materiality for the year was set at $1.8m (2020: $1.10m). This is lower than our planned materiality of $2.2m,
scoping as communicated to you in our Planning Report, owing to lower than forecast revenue for the year.
• Component materiality ranges from $0.72m to $1.1m. Audit work has been completed predominantly by Deloitte UK (in
both the UK and US) with Deloitte China being directed as component auditors by Deloitte UK for four subsidiaries.
• Our scope has remained consistent with our planned approach as communicated to you in the Planning Report, providing
83% revenue coverage from full scope audits and audit of specified balances.

Significant audit • The significant risks identified are in line with our Planning Report, except for an additional significant audit risk in relation
risks to contingent consideration and put/call options given the sensitivity of these balances.
• Please see pages 4 – 9 for further details on our significant risks.

Control • Throughout our audit we have identified a number of control observations which have been raised on pages 11 – 12.
observations

Helen Wildman
Lead audit partner
3
Significant risks
Significant risk dashboard

Level of
Management
Fraud management
Significant risk paper Page
risk judgement
received

Revenue recognition in relation to the occurrence of non-event revenue

Yes No 5

Valuation of goodwill and intangible assets

Yes No 6

Management override of internal controls

Yes No 8

*Valuation of put and call options and contingent consideration options Yes
No 9

*Subsequent to our audit planning, we re-considered the risk factors present in the put and
Moderate
call options and contingent consideration. We have determined the put/call option for Tarsus
Connect LLC and contingent consideration for Smarter Shows (Tarsus) Limited as a significant Significant
4
audit risk given the sensitivity to forecasts.
Significant risks (continued)
Revenue recognition: occurrence of non-event revenue

Risk identified Deloitte response

ISA (UK) 240 states that when identifying and assessing the risks Material non-event revenue was limited to the following entities: MCII,
of material misstatement due to fraud, the auditor shall, based Cardio, Connect and Bizbash which totals $15m in FY21. In order to respond
on a presumption that there are risks of fraud in revenue to the significant risk, our work comprises the following procedures:
recognition, evaluate which types of revenue, revenue
• Testing the design and implementation of controls over the occurrence of
transactions or assertions give rise to such risks.
non-event revenue;
Consistent with our planning procedures and the prior year, we
• Reviewing management’s revenue recognition policy;
considered the risk of fraud in revenue for the group to be in
relation to occurrence of non-event revenue, i.e. the risk that • Obtaining revenue schedules by category and divisions; and
Tarsus did not have the right to recognise the revenue due to • Selecting a sample of items and agreeing to underlying support to
non-performance of their obligations under the sales evidence the satisfaction of performance obligations in line with IFRS15.
arrangement.

Deloitte view

We have challenged the judgements management have taken regarding revenue recognition of non-event revenue with no issues to note.
However, the associated balance sheet adjustments relating to IFRS15 are applied at group level rather than subsidiary level which impacts
various balances. The process of determining whether a debtor and deferred income should be recognised gross on the balance sheet, or
netted and not recognised could be improved and, we are still awaiting the final assessment for this year end.

5
Significant risks (continued)
Valuation of goodwill and intangible assets
Risk identified and key judgements Deloitte response
The Group has significant goodwill and intangible asset balances In order to respond to the significant risk, we are in the process of
($744.5m), the accounting for which involves a number of key performing the following procedures:
judgements in determining their respective valuations. Due to the
• Testing the design and implementation of key controls relating to
sensitivity of the valuation to cash flows, we have pinpointed this
the valuation of goodwill and intangible assets;
significant risk to the reasonableness of management’s forecast cash
flows. • Reviewing and auditing, with the support of our internal valuation
The key judgements identified in management’s assessment of experts, the key assumptions within the forecast model valuing the
impairment are: intangible assets, including CGU allocation;
• The underlying assumptions in management’s short term forecasts; • Obtaining and reviewing contradictory evidence to challenge
• The determination of discount rates based on the locations in which management’s assumptions;
the divisions operate; and • Performing sensitivity analysis on the key assumptions;
• The determination of long-term growth rates on a CGU level from • Recalculating the mathematical accuracy of the calculations within
which to consider a perpetuity. valuation report in valuing the intangibles and goodwill; and
We note that BDO have been engaged by management to assist with
this work. • Reviewing the journals made to intangibles to ensure the
accounting is appropriate, and carrying value used in assessment is
complete.
Deloitte view
An impairment of $47m has been recognised. We are satisfied that the methodologies adopted to value CGUs are appropriate given the nature
of the business, and the forecasts have been prepared with the view as of 31 December 2021 inline with IAS 36. We observed a robust
forecasting process, at a show level, with budgets submitted by local controllers and reviewed by Group management. We note that
management have applied a contingency of $100m (2020: $113m) to the value in use calculations; we are currently working through the
allocation of this forecast assumption.

We have obtained detailed understanding of the cash flow forecasting process undertaken by the Group. We noted that cash flow
forecasting review process and challenge is not formally documented and evidenced which may result in inadequate challenge of assumptions
set by the component teams.

We are in the process of challenging the discount rates (WACC) by reference to an audit of the inputs by engaging internal valuations
specialists. From our initial review, we consider that most of the inputs and therefore the overall discount rates are within a reasonable range
for a market participant, but our work is ongoing in this area. 6
Significant risks (continued)
Valuation of goodwill and intangible assets (continued)
Deloitte view (continued)
Our work to date concludes that the assumptions relating to the forecast trading are appropriate and we are currently working through the long
term growth rate assumption where our specialists have noted differences on initial review.
The impact of the impairment test was a total impairment of $47m across 3 CGUs. The impairment has been allocated against goodwill at a CGU
level in line with the below table. It is evident that small changes in assumptions could materially impact the level of impairment recorded (as is
apparent in the current year when considering the impairment assessment in the prior year), and therefore our work is ongoing.
Deloitte concur with management’s assessment that the assumptions represent key sources of estimation uncertainty, and the use of
appropriate sensitivity analysis within the financial statement disclosures. We will challenge the associated disclosure in due course, alongside
our own independent sensitivity analysis.

Discounted
Carrying
cash flows Headroom/
$m amount of Deloitte comment/sensitivity
(Value in (Impairment)
CGU
Use)
CGU We have performed independent sensitivities and included highlights below:
Labels 105.6 139.2 (33.6) • Portfolio - a 0.5% increase in discount rate, and a 0.5% decrease in the long
Aerospace 94.6 87.1 7.5 term growth rate assumption would give rise to a further impairment of
Travel and $15.3m and $13.2m respectively across the portfolio.
education 13.9 22.4 (8.5)
Medical 206.6 184.7 21.9
• Labels – a change in discount rate of 1% will cause the (already recognised)
impairment to increase by approximately $10m.
Connect 87.0 86.6 0.4
Mexico 46.9 36.5 10.5 • Medical – an increase in discount rate by 1.2% and a decrease of growth
US Other 38.8 29.2 9.6 rate by 1.2% will cause an impairment of this CGU.
Hometex 80.3 73.8 6.5 • Connect – an increase in WACC by a mere 0.1% and decrease of growth rate
Turkey 14.0 9.9 4.1 by the same rate will cause an impairment of this CGU.
SIUF 19.1 15.6 3.5 • Hometex – an increase in WACC by 1% and decrease of growth rate by the
China Other 24.4 21.1 3.3 same rate will cause an impairment of this CGU.
SEA 33.7 38.6 (4.9)

7
Significant risks (continued)
Management override of internal controls
Risk identified Deloitte response

We are required to assess the risk of management override of internal We have applied professional scepticism throughout our assessment of
controls under ISA 240 (UK) at both group and component audit level. key business cycles and our substantive procedures.
This is a presumed significant risk as management is in a unique position In considering the risk of potential fraud, we performed procedures as
to override controls and therefore specific audit consideration must be detailed below:
given to this risk.
• Evaluated whether the judgements and decisions made by
The requirements of ISA 240 include consideration of the below areas: management in making the accounting estimates (for example in
• Journals exhibiting characteristics of fraud including those posted to determining forecast future cash flows and the discount rate used as
unusual accounts, seldom used accounts, on public holidays and identified in other significant risk areas) included in the financial
journal descriptions containing specified key words; statements indicate a possible bias;
• Possible bias in management judgement and estimates; and • Reviewed the group financial information and key meeting minutes
• The business rationale for significant events and unusual for any unexplained transactions which appear unusual or outside
transactions. the normal course of business;
In addition to those areas already discussed above, we have further • Performed journal entry testing for each of our full scope
pinpointed this risk to the financial reporting process, judgements made components using our specialist data analytic software, Spotlight or
by management in determination of metrics associated with Excel analytics; and
management bonuses, other judgements made in presentation of the • For each component, made enquiries of individuals involved in the
financial statements and other key judgements made by management, financial reporting process and investigated the journals which were
such as judgements in future forecasts and impairment assumptions. selected as having “characteristics of audit interest”, for example
those to seldom used accounts, containing round/sequential
numbers, large debits to revenue and journals posted to unusual
combinations of account codes.

Deloitte view
We have considered the key judgements and estimates management have made, in particular those identified as significant risks within this
report. We have not identified any indicators of particular bias within management’s estimates and judgements, and our reviews of the historical
accuracy of judgements and estimates have not identified any areas of concern.
As part of our journal entry testing we have analysed all journals recorded in the period. We have identified and reviewed all of the journals with
characteristics of interest (as noted above) and, where necessary, performed more detailed testing procedures to validate the appropriateness of
that journal. Our work in this area is on-going in light of matters described on page 10. 8
Significant risks (continued)
Valuation of put and call options and contingent consideration options
Risk identified and key judgements Deloitte response
Valuing put and call options and contingent consideration In assessing the risk of valuing put and call options and contingent consideration
options requires the use of estimates such as the options, we are in the process of performing the following procedures:
probability of future payments, forecasted EBIT, revenue
• Testing the design and implementation of key controls in valuing the put and call
or profit and the selection of appropriate discount rates.
options, and contingent consideration options;
These “key performance measures” are specific to each
contract and performance measures for each contract • Obtaining management’s calculations and challenging the key performance measures
therefore vary. with reference to historical performance and available third party and external
evidence;
Subsequent to our audit planning, we re-considered the
risk factors present in the put and call options and • Obtaining and challenging the profit forecasts on which put and call options /
contingent consideration. We have determined the contingent consideration agreements are dependent, and ensuring consistent with
put/call option for Tarsus Connect LLC ($9.7m) and forecasts used as part of the impairment of goodwill and intangible assets work;
contingent consideration for Smarter Shows (Tarsus) • Performing sensitivity analysis on the key assumptions, such as:
Limited ($18.4m) as a significant audit risk given the
sensitivity to forecasts. • Future earnings based on the year in which put and call options are expected
to be exercised; and
• Discount rates.
• Reviewing accounting records for details of any remaining liabilities where the
liability will be extinguished in accordance with an acquisition contract; and
• Tracing the payments made during the current year through to bank statements.
Deloitte view
On review of the working paper, we have found a net misstatement of $1.39m (a decrease) in the calculations of contingent consideration liability
and an absolute misstatement of $3.79m in calculation of put and call options liability. These have now been updated by management but we
recommend that the working papers for put and call and contingent consideration options and calculations are more regularly reviewed in order to
mitigate the risk of error.

We are currently finalising our work on this significant risk, which includes the audit of the associated disclosure note as a key source of estimation
uncertainty in line with prior year.

9
Other significant findings
Fraudulent activity

Our work surrounding this matter is ongoing and we have not provided any control observations in relation to this in this paper. A key part of
our work is the review and challenge of management’s assessment both of this incident but also challenging the potential opportunity to
commit fraud in other subsidiaries. We have held several conversations regarding this but have not yet received the final report.

The audit team became aware of a potential cash fraud in Boca Raton whilst on site performing audit testing. Group management have since
investigated and confirmed the fraud, as set out in Management’s report to Audit Committee dated 15 March 2022. Alongside Group
management’s assessment of the matter, which we will review in due course, we have taken the following actions to date:
- Enhanced the existing journal entry testing:
o To include all entities that the individual had access to post journals including Offprice Specialist Center;
o Extending the journal entry criteria tests to include:
▪ All manual journal postings made (or reviewed) by the individual that impacted any of the following accounts: bad debt
expense, intercompany debtors, trade debtors.
▪ All other manual postings to MCII that were made by the management accountant of Cardio and reviewed by the
individual.
All journals selected for testing were challenged and we are awaiting supporting documentation. Note that the above did
include some of the instances of confirmed fraud;
- Requested a breakdown of bad debt write offs and intercompany debtors in the US components to test in full;
- Re-audited any verbal representations we obtained from the individual;
- Engaged a Deloitte Forensics partner to help us challenge the response made by management, including the scope of work to be
performed by a contractor specifically bought in to consider the matter; and
- Reconsidered the engagement risk, scoping, and significant risks of the engagement.

10
Control observations
Control observations and areas for management focus

Observation Deloitte recommendation Management response and remediation plan

Non-event revenue assessment Management should perform an assessment of the amount of This practice is already in place but the process
(Connect) revenue to be recognised in respect of partially complete followed will be tightened and looked at more
campaigns which span year end. carefully before recognising revenue that spans
across year ends.
Salesforce to SAP reconciliation The Salesforce listing showed $3.38m of deferred revenue at 31 This reconciliation is done regularly and the
(Connect) December 2021 whereas the SAP balance recorded $3.46m. difference at year end was largely related to
Although immaterial, it would be best practice to reconcile this on Projects that were pushed to 2022 on account of
a regular basis. COVID cancellations. However, Sales force and SAP
were yet to be changed given the year end pressure
and staff issues. Considering the impact was
related to Deferred vs AR which was also not
impacting financial statements at a Group level (as
they are netted), it was not prioritised and left as a
reconciling item.
Barter revenue (F&E) Barter revenue (2021: $867k) is not recorded at the F&E level, Noted
rather at Group level. It would be more appropriate to record the
invoicing for the sales and expense transactions at a local level
given local knowledge of this.
Payroll classification (Smarter We recommend a formal policy is put in place for the classification There was an historical mapping variance between
shows) (admin or cost of sales expense) of payroll related to personnel Smarter Shows and Tarsus relating to payroll costs.
directly working on the shows/exhibitions. This has been aligned from 1 January 2022
following the integration of Smarter Shows onto
the Group SAP platform.
Event Postponement A number of components do not formally communicate with all Rescheduled event dates are communicated to
Documentation (Group) their customers when events are deferred. Whilst management customers via channels commonly adopted in each
detail that the contractual terms stipulate that Tarsus has the right territory, and this is not always through written
to retain the cash received in respect of postponed events, given correspondence.
that refunds have been issued for some customers, it would be
best practice to ensure that these communications are formalised.
11
Control observations
Control observations and areas for management focus

Observation Deloitte recommendation Management response and remediation plan

Review of cash flow forecasts Management should define a formal process for evidence of We regularly review cashflow projections every 2
(Group) review, including minutes, for cash flows forecasts to ensure weeks with the local teams. For good practice, we
assumptions are appropriately challenged. will send an e-mail with a bullet point list of actions
(to the extent there are any) after these calls,
although formal minutes for this type of meeting
would not be appropriate.
Bad debt policy (Group) There is no formal policy across the group when providing for bad The Group Internal Controls document outlines the
debts; although there will be exceptions that can be noted it would bad debt policy, which states that any unrecovered
be best practise to formalise a policy to ensure management in debtors greater than 1 year overdue should be fully
local jurisdiction follow Group policy as best they can. provided for. Additional bad debt provisions may
be considered on a case by case basis according to
specific circumstances.
Credit risk (Group) Management does not adjust the fair value of derivative financial The existing swap profile is close to maturity and
instruments for the potential impact of credit risk for any entity. not material. Our cashflow planning includes an
The derivative portfolio is in a liability position, as such the assessment of our ability to pay interest cashflows,
indicative assessment of credit risk has resulted in a DVA ('own' including the impact of the swaps and these would
credit adjustment). The assessment confirms the credit risk only require early settlement in the case of
adjustment is above $90k, hence requiring further consideration termination which is dependent on events we do
and assessment by management to determine whether they are in not consider likely.
a position to settle these liabilities without credit risk.
Put/call documentation (Group) We recommend that the working papers for put and call and Management concur that that review of put/call
contingent consideration options and calculations are more working papers should be more frequent going
regularly reviewed in order to mitigate the risk of error. forwards, and will be fully updated and reviewed
quarterly.
Revenue recognition (US entities) The process for determining whether a debtor and deferred Management acknowledge that complexities
income should be recognised gross on the balance sheet, or netted around invoicing and the use of multiple systems
and not recognised, should be improved. make it difficult to calculate the IFRS 15 netting
adjustment. Ongoing system and process
improvements should help to reduce this
complexity. 12
Purpose of our report and responsibility statement
Our report is designed to help you meet your governance duties

What we report What we don’t report

Our report is designed to help the Audit Committee and the Board As you will be aware, our audit was not designed to identify all matters
discharge their governance duties. It also represents one way in which that may be relevant to the board.
we fulfil our obligations under ISA (UK) 260 to communicate with you
regarding your oversight of the financial reporting process and your Also, there will be further information you need to discharge your
governance requirements. Our report includes: governance responsibilities, such as matters reported on by
management or by other specialist advisers.
• Results of our work on key audit judgements and our observations on
the quality of your Annual Report. Finally, our views on internal controls and business risk assessment
should not be taken as comprehensive or as an opinion on
• Other insights we have identified from our audit. effectiveness since they have been based solely on the audit
procedures performed in the audit of the financial statements and the
The scope of our work
other procedures performed in fulfilling our audit plan.
Our observations are developed in the context of our audit of the
financial statements.
We welcome the opportunity to discuss our report with you and
We described the scope of our work in our audit plan.
receive your feedback.

Use of this report

This report has been prepared for the Board of Directors, as a body,
and we therefore accept responsibility to you alone for its contents. We
accept no duty, responsibility or liability to any other parties, since this
report has not been prepared, and is not intended, for any other
purpose. Except where required by law or regulation, it should not be
made available to any other parties without our prior written consent.

Deloitte LLP
London 15 March 2022
13
Appendices

14
Audit adjustments
Unadjusted misstatements
The following uncorrected misstatements have been identified up to the date of this report which we request that you ask management
to correct as required by ISAs (UK).

Debit/ (credit)
Debit/ (credit) prior year
income Debit/ (credit) retained Debit/ (credit)
statement in net assets earnings OCI/Equity
£m £m £m £m
Misstatements identified in current year
Reclassification between payables and
- - - -
receivables in Smarter shows ($116k)
Reclassification between payables and
receivables in Connect ($107k) - - - -

Reclassification between deferred revenue and

other creditors ($102k) - - - -

Reclassification between finance costs and

operating costs for contingent consideration - - - -
($871k)
Reclassification between finance costs and
- - - -
operating costs for put/call option ($384k)
Total - - - -

Disclosure misstatements
We are required to report to you all uncorrected disclosure misstatements that have been identified. At the date of the issuance of this report,
we have not yet received a finalised set of accounts. Consequently our work on disclosure deficiencies is yet to be completed. We will provide an
update on the final audit adjustments in the final paper on completion of the audit. 15
Our other responsibilities explained
Fraud responsibilities and representations

Responsibilities: Audit work performed:

The primary responsibility for the prevention and detection In our planning we identified the risk of fraud in revenue recognition and
of fraud rests with management and those charged with management override of controls as a key audit risk. During course of our audit,
governance, including establishing and maintaining internal we have had discussions with management and those charged with governance
controls over the reliability of financial reporting, and reviewed management’s own documented procedures regarding fraud and
effectiveness and efficiency of operations and compliance error in the financial statements
with applicable laws and regulations. As auditors, we We have reviewed the paper prepared by management for the audit committee
obtain reasonable, but not absolute, assurance that the on the process for identifying, evaluating and managing the system of internal
financial statements as a whole are free from material financial control including matters described on page 10.
misstatement, whether caused by fraud or error.
We will explain in our audit report (for all entities subject to audit) how we
considered the audit capable of detecting irregularities, including fraud. In doing
Required representations: so, we will describe the procedures we performed in understanding the legal and
We have asked the Board to confirm in writing that you regulatory framework and assessing compliance with relevant laws and
have disclosed to us the results of your own assessment of regulations.
the risk that the financial statements may be materially
misstated as a result of fraud and that you have disclosed
to us all information in relation to fraud hat you are aware
of and that affects the group.
We have also asked the Board to confirm in writing their
responsibility for the design, implementation and
maintenance of internal control to prevent and detect
fraud and error.

16
Independence and fees

As part of our obligations under International Standards on Auditing (UK), and the Companies Act, we are required to report to you on
the matters listed below:

Independence We confirm the audit engagement team, and others in the firm as appropriate, Deloitte LLP and, where applicable, all
confirmation Deloitte network firms are independent of the group and and our objectivity is not compromised.

Fees The audit fee for the period is £430,000. There were no non-audit services performed for the period.
Non-audit services In our opinion there are no inconsistencies between the FRC’s Ethical Standard and the company’s policy for the supply
of non-audit services or any apparent breach of that policy. We continue to review our independence and ensure that
appropriate safeguards are in place including, but not limited to, the rotation of senior partners and professional staff
and the involvement of additional partners and professional staff to carry out reviews of the work performed and to
otherwise advise as necessary.

Relationships There are no relationships (other than the provision of non-audit services which are covered above) that we have with
Tarsus, its directors and senior management and its affiliates, and other services provided to other known connected
parties that we consider may reasonably be thought to bear on our objectivity and independence.

17
Audit outstanding areas

The following key items are outstanding as at the date of issue of this report:

• Full financial statements for all entities in scope for statutory audit
• Disclosure note supporting documentation
• FX calculation and support
• Management paper on key assumptions within put/call options
• Management paper on key assumptions within purchase price allocation accounting
• Management assessment of impairment for existing goodwill/intangibles
• Final consolidation
• Final tax calculations and disclosures
• Post year-end board minutes
• Going concern assessment
• Signed management representation letter
• Signed director remuneration letters
• Revised IFRS15 adjustment
• Report on the confirmed fraud, and support for enhanced journals testing in response to the fraud
• Various individual requests for supporting documentation

We will provide an update to the above outstanding matters and issue a formal update report before signing.

18
18
Our audit report
Matters relating to the form and content of our report

Our opinion on the financial Going concern Emphasis of matter and other Other reporting responsibilities
statements matter paragraphs
We have not identified a material There are no other reporting
At the current point in time, we uncertainty related to going There are no matters we judge to requirements, modifications
expect to issue an unmodified concern and will report by be of fundamental importance in regulatory matters or any matters
opinion. Note that our audit work exception regarding the the financial statements that we arising from other information
in relation to certain matters is appropriateness of the use of the consider it necessary to draw presented with the financial
ongoing. going concern basis of accounting. attention to in an emphasis of statements that will impact our
matter paragraph. audit report.

19
This document is confidential and it is not to be copied or made available to any other party. Deloitte LLP does not accept
any liability for use of or reliance on the contents of this document by any person save by the intended recipient(s) to the
extent agreed in a Deloitte LLP engagement contract.

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its
registered office at 1 New Street Square, London, EC4A 3HQ, United Kingdom.

Deloitte LLP is the United Kingdom affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK
private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent
entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more
about our global network of member firms.

© 2022 Deloitte LLP. All rights reserved.

4. Going Concern Review
TIGER ACQUISTIONS
GOING CONCERN REVIEW – DRAFT

Introduction
As part of the issuance of our financial statements, and completion of the audit of the period
ended 31 December 2021 it is a requirement of the Group Board to confirm that Tarsus is a
going concern and will remain so through the period to June 2023. This period is the
requirement for sign-off of the accounts by the auditors, although the analysis prepared and
attached currently covers the period to December 2023. This will paper will be presented in
final form at the time of issuance of the financial statements.

Going Concern Conclusions

The wording of the statement is as follows:

The current forward revenue position of the Group is at 56% of the 2022 Base Case revenue,
which itself is 132% of the prior event contracted revenue at the equivalent date. There have
also been physical shows run in Dubai, the US, Mexico and Turkey in 2022 Q1.

The Directors have assessed the going concern of the Group, taking account of the Group’s
current position and the potential impact of the principal risks documented in the Annual Report.

In addressing the current coronavirus outbreak, which has been impacting the attendance and
hosting of events, the Directors’ assessment considered the resilience of the Group, also taking
account of its current position. With no facilities maturing in the period, forward bookings, the
principal risks facing the business in a severe but reasonable scenario and the effectiveness of
any mitigating actions.

This assessment has considered the potential impacts of these risks on the Group’s position,
including the possible impact on solvency and liquidity over the period – primarily through
considering the Group’s position in light of scenarios featuring reduced revenues and cash-flows.
It has also taken account of the mitigating actions including reducing discretionary spend and
reducing launch investments and capital expenditure.

The scenarios modelled disruption arising from the coronavirus pandemic continuing from the
current time (March 2022) to the end of December 2022 during which period it is assumed that
a reduced number of events would take place. The model has been updated for the cashflow
phasing delays seen in 2022 Q1 due to Covid. It is further assumed that the events which are
able to take place, run at a reduced profitability and cash generation due to the disruption
caused in the market. With total 2022 revenues reduced by 23% from the base case and EBITA
impact of $28m.
Based on this assessment, the Directors have a reasonable expectation that the Group will be
able to continue in operation, for a period not less than 12 months from the date of these
financial statements, and meet its liabilities as they fall due in that period.

Going Concern Model

The Group models incorporate the submitted projections for profit and cash that were
submitted by the divisions for the 2022 budget and 2023 outlook which were approved by the
Board in December 2021. These forecast figures have been consolidated into a working capital
model that projects the Group’s liquidity for each month to December 2023. The model has
been adjusted to reflect actual fourth quarter results and the corresponding impact on
cashflow timing.

The Group has $460m of committed borrowings which mature in August 2026, together with
a $78m Acquisition facility and a £25m revolving credit facility which extends to 2026. These
facilities have no financial covenants.

The Group model incorporates the payment of any remaining contingent consideration
payments in respect of previous acquisitions of $8.6m and includes high level assumptions on
the payment of dividends from JV companies in US, Turkey and China, moving cash balances of
$12.1m to Group within the Going Concern period.

Sensitivities
The table below shows how the principal risks and mitigations have been modelled:

Risk Modelled
Known Show Labels Europe
cancellations not
included in Base
Case
Show cancellations H1 Asia shows (7 in China and 6
in Southeast Asia)
US 10% contribution reduction for
the US portfolio in 2022 H1 to
accommodate local cancellations
& any further dampening to the
trading environment

The scenario modelled is in some ways unrealistic – for example, offsetting overhead savings
would be made in most cases, but for the purposes of demonstrating the worst-case impact on
the model, only limited mitigation scenarios were included in the first analysis.

The above model shows a cash balance low-point of $18.4m in September 2022. This then
increases to $27.0m in January 2023 before falling to the next low-point of $18.7m in June 2023.
If we needed to start implementing more mitigating activities, we would have good visibility to
be able to plan these effectively well before end 2022.

To help further mitigate these risks there are discretionary levers which can be used – i.e.
reduction in capital expenditure/intangibles spend, travel costs, entertaining, overhead
reductions through restructurings and deferring launch investment. These in practice would
be the first lines of reduction before the emergency levers above. The table below highlights
some of the levers we have in each year and the impact that would have on P&L/cashflow:

LEVER US$’M 2022 2023

Bonuses not paid 3.0 3.0
Headcount 1.6 2.5
Salary savings 1.0 1.0

These have been modelled from July 2022 onwards as some are already in place until then,
following on from the mitigating actions taken in 2020 & 2021.

Current Trading
The Group has traded in line with expectations during the early part of 2022, and fx rates are
broadly in line with those used for budget. There have been several physical shows take place
in 2022 Q1, a co-located show held by Aerospace in Dubai for AIME and MRO in March; OffPrice
in Florida in February; Mexico ran Expo Manufactura and Plastimagen in February and March;
and Turkey have had all three of Asansor, Host Istanbul and Komatek take place in March.

There was an impact on numbers due to Omicrom earlier in the year but that they are now
recovering with large events, strong bookings, and cash collection. There has been the
cancellation of Labels Europe in April and there are currently risks in China for 2022 H1.

Our current expectation is that shows from July 2022 will be held ‘as normal’. We also expect
that 2022 trading will continue in line with our current budgets and established patterns.

Consolidated bookings for 2022 events are robust with over 50% of budgeted revenue
contracted.

Conclusion
Based on the model projections the Group has sufficient headroom on cash liquidity for the
period being tested to December 2023. Forecasts continue to be tracked regularly so that
mitigating actions can be enacted in time if required. Details of the projections under each
scenario are set out in the attached summary of the liquidity headroom.

Mark Pennington
March 2022
5. Internal Audit Update
Internal audit
March 2022

1
Contents

1. 2022 – 2026 strategy

2. 2021 Findings
a. Connect
b. Medical
c. Smarter

2
 Internal audit – scope
• It was agreed at the September board meeting that the 2021 internal audit scope would cover Connect, Medical and UK &
Dubai (Smarter was selected). The results* of these audits have been included in slides 6 – 16.
• The scope of these audits did not cover credit card refunds, the scope of future audits will be reviewed this risk is addressed.
• We have prepared a 2022 – 2026 strategy which has been developed to ensure audit coverage across Tarsus’s global
locations, planned activity and a risk-based plan developed based on the risk register and discussions with management.

Risk Ref (and Timing of coverage

Auditable Area
net risk level) 2022 2023 2024 2025 2026
Risk Based Coverage

Risk Management – annual review of risk register     

Disaster Recovery and Business Continuity 12 
Cyber Security 14,15  
GDPR Compliance 13 
Cash and Treasury Management 16,17, 22 
Key Financial Systems 19 
Fraud 18 
Staff recruitment and retention (including diversity & inclusion) 24 
Strategy and Business Development 5,6,7,8 
Environmental & Social Governance 27,31 

Corporate Governance 31 
Insurance 3

3
* Full audit reports are available on request
 Internal audit – scope
• The coverage in 2022 is weighted towards site visits due to the need to catch up on these as a result of COVID and in
respect of areas of high risk within Tarsus.

Timing of coverage
Auditable Area
2022 2023 2024 2025 2026
Site Audits
UK   
Dubai  
Connect  
Medical  
Other US  
China     
Turkey 
Mexico  
Philippines 
Indonesia 
Follow Up     

4
Contents

1. 2022 – 2026 strategy

2. 2021 Findings
a. Connect
b. Medical
c. Smarter

5
 Internal audit - Connect
LEVEL OF ASSURANCE (SEE APPENDIX II FOR DEFINITIONS) SUMMARY OF RECOMMENDATIONS

High 0
Design Controls are generally good at transactional level
Medium 2
Low 4
Transactional controls are generally operating
Effectiveness
effectively with little to no exceptions Total number of recommendations: 6

OVERVIEW
Background
The purpose of our review was to provide assurance that appropriate arrangements are in place and operating effectively in relation to Connect. The review consisted
of an evaluation of the overall control environment in relation to Connect focusing on areas covered by the Tarsus Group Internal Work Programme.
Overall responsibility for the internal control environment rests with the finance team at Connect. It is a small finance team with a Divisional CFO, Controller, Senior
Accounting Manager and Staff Accountant.Scope and Approach
Scope and Approach
The review consisted of interviews with employees, review of documentation and testing as appropriate. The areas covered were:
• Supplier Contract Management • Month End and Budgetary Control
• Health and Safety Management • Payroll
• Pricing Management • Bribery Act
• Treasury and Cash Management • Procurement to Pay

• Delegation of Authority

Findings
See slide 7 & 8
Conclusion
Appropriate procedures and controls are in place to mitigate the key risks. Employees responsible for the oversight and execution of internal control activities have a
strong and clear understanding of their responsibilities.
6
 Internal audit - Connect

Sig. Finding Summary Recommendation Management response

A Health and Safety (“H&S”) policy is not In conjunction with Group, establish an H&S A Group Health & Safety policy is in place and a
currently in place. policy. local H&S policy has been published in Q1 2022.

There have been no actions taken since the Identify an employee to be designated as the Andrew Dysart has been appointed as the H&S
2019 audit. No incident logbook exists H&S officer that facilitates compliance officer.
however, there have been no major incidents necessary to ensure a safe workplace according
reported in 2021. to legal standards. The H&S officer would
develop and maintain the incident logbook and
fosters a culture of attention to health and
safety.

Monthly reconciliations are completed but not Sign and date account reconciliations by the This recommendation has already been
signed and dated by the individual preparing individual performing and reviewing the implemented since year-end.
and the individual reviewing. Therefore, reconciliation.
timeliness and segregation of duties (SoD) can
not be validated.

7
 Internal audit - Connect

Sig. Finding Summary Recommendation Management response

Several manual journal entries, some as In conjunction with the UK SAP IT team, review This recommendation has already been
recent as October 2021, were approved and the existing system configurations and implemented since year-end.
posted by the same individual who created implement necessary changes to ensure that no
the entry. There was no evidence that these Connect employee can both post and approve a
entries were also reviewed by a 2ndmember journal entry.
of the finance staff who did not post the
journal entry.

“Starter” and “Leaver” forms are not being Complete and maintain the "Starter" and We will request a template of these starter and
completed as required by the control, "Leaver" form. leaver forms to understand the purpose and
although required authorizations are in value of the control it is establishing. If we
place. determine it enhances the existing process, we
will adopt implementation of these starter and
leaver forms.

Upon hire, only a Non-Compete Agreement is In conjunction with Group, update the Agree with the recommendation and is
provided and signed. A comprehensive Employee Handbook to align with Group something the company is already working on.
Employee Handbook exists; however, it has policies. After updates are made, require all We will need to prioritise this in Q1.
not been updated since 2016. No other existing employees, including future new hires,
Group policies (Whistleblowing, Bribery to review and provide attestation. Retain the
Prevention, Gifts and Hospitality) are Employee Handbook in a location that is always
provided to the employee. accessible.

8
Contents

1. 2022 – 2026 strategy

2. 2021 Findings
a. Connect
b. Medical
c. Smarter

9
 Internal audit – Medical
LEVEL OF ASSURANCE (SEE APPENDIX II FOR DEFINITIONS) SUMMARY OF RECOMMENDATIONS

High 0
There is a sound system of internal control
Design
designed to achieve system objectives. Medium 1
Low 3
The controls that are in place are being
Effectiveness
consistently applied. Total number of recommendations: 4

OVERVIEW
Background
The purpose of our review was to provide assurance that appropriate arrangements are in place and operating effectively in relation to Medical. The review consisted
of an evaluation of the overall control environment in relation to Medical focusing on areas covered by the Tarsus Group Internal Work Programme.
Overall responsibility for the internal control environment rests with the finance team at Medical. It is a finance team with a Finance Director, Controller, Accounting
Manager and five senior or staff accountants.
Scope and Approach
The review consisted of interviews with employees, review of documentation and testing as appropriate. The areas covered were:

• Supplier Contract Management • Month End and Budgetary Control

• Health and Safety Management • Payroll
• Pricing Management • Bribery Act
• Treasury and Cash Management • Procurement to Pay

• Delegation of Authority

Findings
See slide 11.
Conclusion
Appropriate procedures and controls are in place to mitigate the key risks. Employees responsible for the oversight and execution of internal control activities have a
strong and clear understanding of their responsibilities.
10
 Internal audit – Medical

Sig. Finding Summary Recommendation Management response

A Health and Safety (“H&S”) policy is In conjunction with Group, establish a H&S policy. A Group Health & Safety policy is in place and
not currently in place. a local H&S policy is expected to be published
by mid year.

An incident logbook does not exist, Identify an employee to be designated as the H&S officer A local H&S officer will be appointed by mid
however there were no major that facilitates compliance necessary to ensure a safe year who will report any significant events to the
incidents reported in 2021. workplace according to legal standards. The H&S officer group team who will maintain a company wide
would develop and maintain the incident logbook and fosters log.
a culture of attention to health and safety.

Monthly reconciliations are Sign and date account reconciliations by the individual A “front page” sheet will be added into the files
completed but not signed and dated performing and reviewing the reconciliation. with:
by the individual preparing and the
1. Preparer and reviewer names
individual reviewing. Therefore,
timeliness and segregation of duties 2. Completion dates. A time stamp will be
(SoD) cannot be validated. added.

Upon hire, only a Non-Compete In conjunction with Group, update the Employee Handbook Will work with our Professional Employer
Agreement is provided and signed. to align with Group policies. After updates are made, require Organization (Questco) to update the Employee
No other Group policies all existing employees, including future new hires, to review Handbook. Furthermore, we will also ensure all
(Whistleblowing, Bribery Prevention, and provide attestation. Retain the Employee Handbook in a relevant staff (those identified as requiring
Gifts and Hospitality) are provided. location that is always accessible. Also, ensure all relevant training) have received appropriate Anti-Bribery
Furthermore, all relevant staff (those staff (those identified as requiring training) have received & Corruption refresher training within the last
identified as requiring training) have appropriate Anti-Bribery & Corruption refresher training two years.
not received appropriate Anti-Bribery within the last two years.
& Corruption refresher training within
the last two years.

11
Contents

1. 2022 – 2026 strategy

2. 2021 Findings
a. Connect
b. Medical
c. Smarter

12
 Internal audit – Smarter
LEVEL OF ASSURANCE (SEE APPENDIX II FOR DEFINITIONS) SUMMARY OF RECOMMENDATIONS

High 2
Design Controls are generally good at transactional level
Medium 1

Low 1
Transactional controls are generally operating
Effectiveness
effectively with little to no exceptions Total number of recommendations: 4

OVERVIEW
Background
The purpose of our review was to provide assurance that appropriate arrangements are in place and operating effectively in relation to Smarter Shows financial
controls. The review consisted of an evaluation of the overall control environment in relation to financial control activities focusing on areas covered by the Tarsus
Group Internal Work Programme, developed in conjunction with our internal auditors. Overall responsibility for financial controls rests with the finance team of
Smarter Shows as well as the finance staff at Tarsus Group level.
The Smarter Shows team maintain responsibility for all submissions with the input from the wide team.
Scope and Approach
The review consisted of interviews with staff, review of documentation and testing as appropriate. The areas covered were:
• Supplier Contract Management • Month End and Budgetary Control
• Health and Safety Management • Payroll
• Pricing Management • Bribery Act
• Treasury and Cash Management • Procurement to Pay
• Delegation of Authority

Findings
See slide 15 & 16

13
 Internal audit – Smarter
LEVEL OF ASSURANCE (SEE APPENDIX II FOR DEFINITIONS) SUMMARY OF RECOMMENDATIONS

High 1
Design Controls are generally good at transactional level
Medium 1

Low 2
Transactional controls are generally operating
Effectiveness
effectively with little to no exceptions Total number of recommendations: 4

OVERVIEW (continued)
Conclusion
Our review concluded that there are good internal controls in place such as segregation of duties and authorisation levels regarding planning, invoicing and payments
for goods and services. Some opportunities were identified however to enhance the control environment as set out below and in more detail throughout the report.
There are no procedures in place however regarding how value for money can be obtained through procurement through use of tenders and quotations. In addition,
purchase order controls should be established as a control mechanism to keep expenditures under control and to enable expenditure to be approved at the
commitment stage. Finally, although the responsibility to carry out checks on the accuracy of prices applied to clients and suppliers invoices lies with the budget
holders, there is a need for this process to be strengthened with additional detective controls within the Finance Department to ensure that prices are applied as
agreed, and according to the Price List and Contracts.

14
 Internal audit – Smarter

Sig. Finding Summary Recommendation Management response

Health and Safety Policy not updated. The Health and Safety Policy should be reviewed to Health and safety – Currently all contractors
ensure that it remains up to date and relevant. are provided with a copy of our Health and
Staff not required to confirm they
Safety risk assessment, however there is no
have read the policy. Staff should acknowledge they have read and understood
confirmation collected that this has been
Policies and Procedures and agree to abide them by
No requirements for contractors accepted. We will look at implementing the
signing a Policy and Procedure Acknowledgement Form.
attending site to confirm they have recommendation for future events.
read the health and safety procedures. As part of the arrangements for contractors coming on
site, they should be made aware of the health and safety
regulations in place and sign to confirm their
acceptance.
In conjunction with Group, establish a H&S policy.

No evidence discount applied to a Discount pricing and promotional pricing strategy should Discount pricing – Tarsus agree the pricing
supplier had been approved in one be approved by the executive level according to the level for each event and the average discount
instance. Delegation of Authority. level upfront and then it is up to the teams at
Smarter to manage the overall discount level
for the exhibitor universe and to not exceed
the approved amount. This is reviewed weekly
when the data for the sales report is prepared
by the Smarter Managing Director.

15
 Internal audit – Smarter

Sig. Finding Summary Recommendation Management response

No periodic second line assurance to • Prices applied to invoices raised and received should Purchase orders: Finding accepted, PO’s
check invoice and orders against be checked on an ad hoc basis by the Finance team planned to be launched in Q1 2022
agreed rates and lists to confirm before approving a payment.
accuracy.
• All the contracts with current speakers and venues
Contracts not available to finance should be updated and made accessible to the finance
team team.
Purchase orders not utilised. • Introduce Purchase Order processes as a mechanism
to manage expenditure at the commitment stage.
No Procurement Policy in place which
details processes to be followed in • Draft a Procurement Policy which includes the
relation to tenders or quotations. processes and limits under which quotes or tenders
should be obtained to ensure that value for money is
being achieved through expenditure.

There is currently no structure chart Produce a current structure of employees in a form of an We are not clear that the creation of an
which sets out all of the Smarter Organisation Chart. organisation chart will add any value to the
Shows employees and their role within payroll process control environment, although
the organisation Therefore, we were appreciate it would be a useful document to
unable to reconcile the list of have.
employees to the most recent payroll
report.

16
RISKS RISK MANAGEMENT
RISK IMPACT ANALYSIS Acceptable Risk? Previous Net Risk Direction of Travel Further Action Required
RISK CATEGORY RISK DESCRIPTION Strength
REFERENCE
Significance Likelihood Gross Risk CURRENT RISK MANAGEMENT STRATEGY (what already happens now) (S,M,W) Net Risk
1 Operations Injury or death to staff, customers or 3 2 High Operational H&S procedures and insurance cover. New reporting to M Medium No Medium 
contractors. Doug introduced which has driven management focus and discussion

2 Travel Terror attack event preventing a show. 3 2 High Review conducted annually and insurance taken out for selected shows M Medium Yes Medium 
as required, and operational management in place to formulate a plan
as required.
3 Travel Travel disruptions / embargo / adverse 3 2 High Review conducted annually and insurance taken out for selected shows M Medium Yes Medium 
weather/ significant event adversely as required, and operational management in place to formulate a plan
impacts on travel arrangements. as required.

4 Travel Covid-19 or other communicable 3 3 High Management of shows on an individual basis to reschedule. Monitoring of M Medium Yes Medium  Continue increased short term
disease adversely impacts on travel cash position and active management of discretionary cash/spend monitoring controls, and continue
arrangements, impacting on shows to evolve long term scenarios and
going ahead plan in the event of further/other
outbreaks

5 Competitors The market becomes increasingly 3 2 High Lockout of key venues. Strong knowledge of local markets. Strong S Low Yes Low 
competitive, resulting in a loss of relationships with associations and key customers.
market share.
6 Customers Loss of business due to collusion 3 2 High Ongoing relationship building, communication plans for large shows, M Medium Yes Medium 
resulting in an alternative event. pricing management.

7 Customers Strong relationships with trade 3 2 High Ongoing relationship building, communication plans for large shows, M Medium Yes Medium 
association are not maintained, pricing management.
adversely impacting on reputation
within the industry.
8 Customers Slow-down of underlying industry / 2 2 Medium Active portfolio management and disposal. S Low Yes Low 
sector.

9 Customers Failure to attract and retain a 3 3 High Sufficient resource and effort dedicated to attract and retain correct S Low Yes Low 
sufficient buyer-base, particularly for quality of buyers.
new events.
10 Customers Failure to identify and react to 3 1 Medium Ongoing monitoring and review of changes within industry. Investments M Low Yes Low 
changing media trends and channels in new areas such as marketing and sales
resulting in loss of income.

11 Customers Terror attack at a show. 3 1 Medium Operations procedures are in place. Robust security arrangements at S Low Yes Low 
Dubai air show (governed by venue).

12 Information Technology Unforeseen events affecting Business 2 2 Medium Informal BC/DR plan in place to cover IT systems. Most systems are now M Low Yes Low  New CTO has been hired who will
Continuity, impacting on Head Office / cloud based, hosted by blue chip providers. carry out a general IT review
causing major shutdown of IT systems including the BC/DR plan update as
and infrastructure. required

13 Information Technology Loss of key buyer/exhibitor data and 2 2 Medium Policies and procedures regarding data usage and retention as well as M Low Yes Low  New CTO to refresh IT policies.
non-compliance with GDPR. the appointment of an external data protection officer. Penetration testing to be
undertaken. Implenting actions from
Cyber Security Review

14 Information Technology Cyber attack - risk of fraud and 3 3 High We have policies in place to prevent payments being made to new M Medium Yes Medium  Remain vigilant and aware at all
misappropriation of assets through accounts without verbal confirmation. Banking limits are also in place times, and constantly remind staff
cyber attacks and we have weekly cash reporting and regular payment reviews of the threat

15 Information Technology Cyber attack - risk of loss of data of 3 3 High We use blue chip CRM's such as Salesforce and Hubspot for critical data, M Medium Yes Low  Penetration testing to be
customers or attendees through cyber as well as a diversified portfolio and use of systems to segregate data undertaken
attack, or a ransomware attack causing and mitigate any one attack
financial loss

16 Finance Access to liquidity and funding. 3 1 Medium Close monitoring of cash requirements. Prudent approach to borrowing / S Low Yes Low 
bank covenants. Strong relationships with banks. New bank facilities in
place post takeover.

17 Finance Exposure to large fluctuations in FX 2 1 Low Functional currency changed to USD. Close management of FX M Low Yes Medium  Decisions over fx hedging should
rates, particularly with volatility exposures. occur at each budget
caused by global events including
Brexit and increasing reliance on USD
profits with sterling financing.

18 Finance Financial loss due to fraud. 2 3 High Policies and procedures. Cash reporting. Cash clearing (where possible). M Medium Yes Medium 
RISKS RISK MANAGEMENT
RISK IMPACT ANALYSIS Acceptable Risk? Previous Net Risk Direction of Travel Further Action Required
RISK CATEGORY RISK DESCRIPTION Strength
REFERENCE
Significance Likelihood Gross Risk CURRENT RISK MANAGEMENT STRATEGY (what already happens now) (S,M,W) Net Risk
19 Finance JV partners / vendors not adhering to 1 3 Medium Weekly reconciliations of cash. Balance sheet reviews. Regional Business M Low Yes Low 
policies and procedures (e.g. Leaders are in attendance at trade shows to link revenue to customers.
unauthorised loans).

20 Finance Successful challenge of tax 2 1 Low Use of specialist external consultants. S Low Yes Low 
structures/transfer pricing.

21 Finance Geo-economic slow down, supply chain 3 1 Medium Diversified geographical and sector portfolio of shows, large number of M Low Yes Low 
issues and protectionists trade policies national/domestic focussed shows mitigates larger impact.
around the world cause economic slow
down and impact on business.

22 Finance Inadequate control over cash held in 3 2 High Weekly cash reporting, with Chinese FD signing off on cash transactions. M Medium Yes Medium  Internal audit review of cash
China. controls. Establish database of bank
mandates globally
23 People Loss of key operational staff members 2 3 High Market rate remuneration. Long term incentives in place. High degree of M Medium Yes Low  A benefits, pay and bonus review is
or inability to recruit new talent. autonomy. Long notice periods. Non-compete agreements/clauses. being done with a focus on talent
development/retention
24 People Lack of succession planning resulting in 2 1 Low Annual succession planning exercise undertaken. Experienced Board of M Low Yes Low 
key person dependency risk - Douglas Directors.
Emslie.

25 People Earn out agreements - earn out 2 2 Medium Review and audit of figures. M Low Yes Low 
calculations are not checked prior to
payment, resulting in incorrect
payments.

26 People Earn out agreements - Sustainability 2 3 High Development of long-term succession plans. M Medium Yes Medium 
of business post earn out.

27 People Board and company-wide diversity is 2 1 Low Policy to be issued in 2022 and initiatives to be launched as wider ESG S Low Yes
quantified into task-oriented diversity roll out.
(tenure and education) and relation-
oriented diversity (age and gender).

28 Strategy Return on Investment to investors is 2 2 Medium Robust assessment of acquisitions is performed and diligenced by third S Low Yes Low 
not maximised, either because an party experts, management & BD team spends an appropriate amount of
acquisition pipeline cannot be time identifying new opportunities, with a constant stream of businesses
identified, or a new acquisition does being evaluated
not do as well as expected

29 Venues Appropriate venue is not secured in a 3 1 Medium Forward planning on venue-by-venue basis. S Low Yes Low 
timely manner.

30 Venues Event (e.g. flooding/fire) results in 2 1 Low Insurance cover (flood, fire, access) on costs. S Low Yes Low 
venue not being operable for the short
term.

31 Environmental, Social, and Environmental, how a company 2 1 Low Strategy drafted and approved, KPIs being agreed 1H 2022 and will then S Low Yes
Governance (ESG) performs as a steward of nature. be monitored and reported along with dedicated ESG initiatives being
Social, how it manages relationships run group wide
with employees, suppliers, customers,
and the communities where it
operates. Governance deals with a
company’s leadership, executive pay,
audits, internal controls, and
shareholder rights.
6. US Refunds
Audit Committee Memo – Improper Credit Card Refunds
To: Tarsus Board
From: Mark Pennington
Date: 11 March 2022
Subject: Improper Credit Card Refunds

Executive summary:
A senior member of finance staff has stolen funds from the company by abusing an administrator account on a
credit card processor site (PayPal) and exploiting a security flaw which allows refunds to be made to a credit card,
even if there is no original sale on this card (this flaw does not exist in most processors, including our more
commonly used one, Authorize.net). The issue was found by our auditors raising two suspicious manual journals
to the Group CFO for $5,220 and $8,995 during 2021. During investigations, the issue was found to date between
2019 and 2021 and total over $200,000. 2018 reports have just been received from PayPal and we expect will
include some further transactions. The member of staff joined Tarsus in June 2016 and took over responsibility
for this area of the business in December 2017.

The member of staff has been terminated, account access removed, and the security setting in PayPal changed to
prohibit refunds with no matching sale transaction. Multiple administrators have been created in PayPal who each
receive e-mail notifications if a security setting is changed, mitigating the risk of the administrator changing this
setting back.

A contractor reporting directly to the CFO is currently conducting an investigation to provide comfort that the
issue is not broader into other payment processes. A full list of their procedures is included in Appendix B, and we
will update the board of findings when these are complete.

A restructure of the US finance team to strengthen control and improve oversight is substantially complete.

Legal and Recovery Options

We have engaged counsel in the US to assist – they have confirmed we have no legal reporting obligations at this
stage. At the completion of our investigation, we have 3 options to pursue prosecution and recovery:
1. State criminal prosecution
2. Federal criminal prosecution
3. Civil Settlement

Each option has pros and cons. Counsel have suggested that Federal prosecution normally has the best criminal
outcome, although at current materiality this will be of low interest as a result of the individual being in Florida,
and having higher ticket items in the state. A civil settlement often results in the highest recovery, as the individual
has the ability to work to provide an income to help pay their obligation. In each case, counsel would be able to
assist in liaising with authorities and providing support as needed.

Included Documents

Appendix A – Full Background

Appendix B – Full Scope of Proposed Procedures
Appendix C – New Organisational Structure
Appendix A - Full Background:

During the course of the annual audit by Deloitte, they became concerned about two transactions within the
Medical division (within MCI) and reported them directly to the Group CFO. The transactions identified were a
refund of $5,220 and a journal moving another refund of $8,895 from Medical to Offprice bad debt expense.

A related internal control weakness had previously been flagged in a Q3 balance sheet review that a shared
merchant service login was being used and that some refunds had been made to different cards than they had
been raised on. After an internal review at that time, it had been concluded that the transactions were
appropriate, and different cards had been used due to old ones expiring which the sales team confirmed. In
addition, unique user ID’s were set up for each user with access to the merchant service provider.

I initially performed direct inquiries into the transactions in SAP, as well as reviewing the earlier review of refunds
performed by the local team. Each of the transactions flagged by Deloitte were identified on the initial review
and on closer inspection, two further transactions for $10,000 and $5,000 were identified within the list being
made to credit cards with the last same 4 digits and expiry date as the two flagged – these occurred at the end of
March 2021. These refunds had not previously been raised as suspicious as they were allocated to a client account
who had matching credit notes for these amounts.

I attempted to verify the full list of refunds with the sales team directly to ensure that they had been requested.
The sales team verified that often credit cards with different numbers were used for refunds due to the time that
had elapsed from original order to delivery, due to the timing of events – i.e. an order could have been taken in
2019 for Hollywood 2020, but that live event has still not occurred and will now do so in April 2022. The only
items that the sales team could not verify as appropriate refunds were the four transactions already identified.

Also in discussions with the sales team, it was identified that the refund for $5,220 had subsequently been re-
charged to the card, and so no loss was made. This was raised at the time as an issue as the sales representative
was going to lose a commission, and identified that no refund had been approved. The matter was resolved at
the time as Tikkitra Mizell said she would contact the client and arrange for the card to be re-charged.

My review identified accounting transactions linked to the refunds were raised by Terri Rizza (MCI/PW Finance
Manager) with the bad debt journal posted by Pedro Leon (Accounting Manager) and reviewed by Tikkitra Mizell
(Medical Controller). E-mail communications on refunds attached to journals were questions raised by Terri Rizza
to the sales team and Tikkitra, and booking instructions being provided by Tikkitra Mizell, which Terri had then
followed. Hayley Smith had not been linked to any of the transactions or support, and as a result was briefed to
provide local assistance.

The merchant service system/processor used in MCI (PayFlow Pro – B2B provider of PayPal) allows for refunds to
be made with only a card number and expiry date. No customer name had been added in the field. Furthermore,
as noted above, before Q3 a shared login had been used and so it was not possible to identify who had processed
the refund. The screen shots of the refunds, however, show the IP address where the refunds had been processed.
With the help of IT matching the IP address to logins to their Office 365 account, we could verify that Tikkitra
Mizell had processed the transactions from her home address.

As the recipient of the refunds could not be identified from the system, the customers who the transactions had
been allocated to in SAP (Access Med for the $10,000, $5,000 and subsequently recharged $5,220 and Ward
Phototonics for the transaction of $8,995) were contacted by their sales representative to ask if they had received
refunds or recognised these last 4 digits of the card numbers. They had not received refunds and did not recognise
the cards.

I visited the site in Boca and interviewed Terri Rizza and Pedro Leon. Terri felt that there had been insufficient
support for some transactions. She had tried to flag the issues by questioning them to the sales team and
raising the account control issues with Hayley in the balance sheet review, although she did acknowledge that as
she was not comfortable she had not been direct on raising her suspicions. In discussing the specific
transactions she was referring to, she quoted the same two that were being investigated (i.e. the refunds for
$8,895 and $5,220). Terri said she did not have concerns on other payment processes such as AP as she could
see the bills and understand what they were for, and there was good separation between creating and
approving payments.

Pedro Leon was asked specifically about the journal to move the refund (and write off) of $8,895 from MCI to
Offprice which he had posted. When asked about why he had moved this, and how he knew it related to
Offprice, he explained that this was on the instruction of Tikkitra Mizell – he was unable to find any further
support and admitted this was poor judgement on his part. Pedro does not have access to PayFlow Pro since his
change in role to look after TCI. He confirmed that he was not aware or suspicious of any inappropriate refunds,
cash payments or any other forms of theft against the company. He confirmed that he could and would
immediately provide support for all of the credit card refunds issued in the company which he looks after. Post
interview, he sat with Hayley Smith at his computer and was able to provide clear evidence of approved refund
forms for all of his businesses.

Tikkitra initially denied refunding her own account, but after discussing the transactions further, asked for time
to consider her response, but acknowledged that she would not be able to support the transactions and that we
would find additional transactions with similar problems in earlier years. Tikkitra said that she could not afford
to repay the full amount (effectively admitting guilt). Tikkitra said she would consider providing full written
details but that she had deliberately not kept a log of the transactions as she did not want to admit to herself
the full scale of them.

I notified Tikkitra that she could no longer work with Tarsus and asked her to work on an orderly handover. She
immediately agreed and created an administrator account for Hayley Smith on PayFlow Pro so her own could be
deleted, which then occurred, and her own IP removed from the system so that it could no longer be accessed
from there. She also noted that she had the password for the other admin account linked to the Plurotech sales
system and that it should be changed, which it was. She assisted in changing Diners Club, ADP and Questco
system rights as well as her own computer which had many files saved upon the desktop.

The following week Tikkitra said she would repay all amounts owing however long it took, and asked us for a full
list of transactions which she would confirm. She directed me in how to identify the transactions from
descriptions, and these matched to ones I had identified as high risk from my own review. The transactions are
relatively easy to identify in reports from PayPal because most refunds have a matching invoice number relating
to the original sale transaction, whereas these have no matching ID.
Appendix B – Scope of Proposed Procedures

1. MCI refunds (EA of refunds) (high risk)

a. High risk transactions
i.Identify high risk refund transactions in Paypal (MCI) account since TM started overseeing MCI in
2018. High risk refund transactions have the following characteristics:
1. Those with descriptions flagged by TM (i.e. those only with years as reference); or
2. Those with no invoice references.
ii.For all high-risk transactions, locate the corresponding credit cards used for refunds from the
batch order files (for refunds made in 2018 to 2020, since the paypal reports do not contain
such details), the sales invoices and credit notes.
iii.For all transactions without sales invoices and credit notes, perform a search in the system to
identify all transactions made with those credit cards. Locate sales invoices and credit notes for
these transactions to ascertain their existence and accuracy.
iv.Quantify the impact of those credit transactions not supported by a corresponding sales invoice
and credit notes.
b. Other credit refund transactions
i.For the remaining credit refunds, trace the refund to the original sales orders and transaction
credit cards. Match the refund card numbers to those of the sales.
ii.For refunds which are larger than the original sales orders, locate and review credit notes to
ascertain existence and accuracy of the refund amounts.
iii.For refunds with credit card details which do not match with those of the original sales, locate
and review credit notes to ascertain existence and accuracy of the refund amounts.
c. Based on the work on a) and b), identify the time when the misappropriation started and
expand scope to cover earlier years if needed.

2. Other Medical and Offprice refunds (low risk as refund procedures are different)
a. Identify all medical and Offprice refunds processed in 2021 and 2022.
b. Perform a walkthrough on the refund creation and approval process to understand it.
c. For all refunds made in 2021 and 2022, match the refunds to the original sales transactions
using the transaction report generated by the third-party payment handling agent (for WP) or
refund forms and original sales invoices (for SBS and CMHC).
d. Extend the sample size should any unsupported or unapproved refunds are found and quantify
their financial impact.

3. Expense claims forms (low risk since additional review and approval)
a. Obtain all TM’s expense claims forms in 2021 and 2022 for evidence of review and approval.
b. Discuss and interview approvers for their review and approval process.
c. Quantify the impact of any unapproved expense claims.

4. HSBC transactions approved by TM (limit of €12.5k) (low risk above this since additional review
and approval, also separate preparer below this amount)
a. Identify all HSBC transactions approved by TM in 2021 and 2022.
b. Verify individual transactions with amount a particular threshold by reviewing supporting
invoices and approval of the user department of those disbursements.
5. Corporate cards (Diners) (low risk since additional review and approval)
a. Since all corporate card spendings are reviewed by respective departments before sending over
to the finance department for review (and approval), the risk of unauthorised personal purchases
using corporate credit cards is low if control is effective.
b. Walkthrough and understand the review and approval procedures on corporate credit card
spendings.
c. Scrutinise all statements for cards TM controlled in 2021 and 2022 for any transactions of
unusual nature.

6. Monthly payroll (low risk since additional review and approval, and PEO has ID checks on new
employees)
a. Perform a walkthrough on the monthly payroll process in 2021/22. Obtain an understanding on
how changes in employees (new/ resigned) are processed.
b. Perform a test of control on 2 monthly payrolls by reviewing the required approval and control
procedures.
c. Compare monthly payroll expenses to the group finance budget and headcount list to identify
any significant variance.

7. Manual journal entries

a. Select all manual journals that are created and approved by TM in 2021 and 2022. Trace the
journals to supporting documents.
b. Select all manual journals that are created by direct subordinates of TM (I.e. by Pedro, Juan and
Terri) and approved by TM in 2021 and 2022. Among these journals, select journals made to
accounts which are more prone to manipulation (e.g. bad debt expenses and intercompany netting)
or vague descriptions (e.g. others). Trace these journals to supporting documents.
c. For system created journals approved by TM (I.e. those start with 4800), select a sample and
trace them to supporting documents.
d. For expenses journals created by other users and approved by TM (I.e. those start with 1400),
select a sample and trace them to supporting documents.