InnovationthroughcommunicationAdEPT Telecom plcANNUAL REPORT AND ACCOUNTS 2015

InnovationthroughcommunicationWe don’t treat our customers as numbers;we focus on personal service and meetingpersonal needs.We’re one of the UK’s leading independent telecommunicationsproviders, offering a complete unified communications portfolio:fixed line calls, line rental, mobile, data connectivity productshardware, managed services, Wi‑Fi and IP telephony.AdEPT at a glance Page 02How we work Page 06Our strategy and KPIs Page 08OverviewCorporate governance01 Highlights15 Board of directors02 AdEPT at a glance16 Directors’ report04 Chairman’s statementFinancial statementsStrategic report19 Independent auditors’ report06 How we work20 Statement of comprehensive income08 Our strategy and KPIs21 Statement of financial position10 Strategic report22 Statement of changes in equity14 Corporate social responsibility23 Statement of cash flows24 Notes to the financial statements43 Company information44 GlossaryAdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015

OVERVIEWSTRATEGIC REPORTSummary of ourfinancial performanceYear ended 31 March 2015CORPORATE GOVERNANCEFINANCIAL STATEMENTSFinancial highlightsEETwelfth consecutive year of increased underlyingEBITDA up 13.5% to 4.6m (2014: 4.0m)EE Revenue increased by 5.8% to 22.1m (2014: 20.9m)EEUnderlying EBITDA margin % increased by 1.4%to 20.8% (2014: 19.4%)Revenue ( m)21.921.020.922.1 22.1m12131415144.615Adjusted earnings per share (p)1415.7611.201314.1311.3515.76p12EE11.8% increase to earnings per share of 6.90p(2014: 6.17p)EE58.3% increase to dividends declared to 4.75p(interim 2.25p, final 2.50p) (2014: 3.00p) 4.6m13EE15.3% increase to profit after tax to 1.5m(2014: 1.3m)EE11.5% increase to adjusted earnings per shareof 15.76p (2014: 14.13p)EBITDA† ( m)12EE15.8% increase to profit before tax to 2.1m(2014: 1.8m)15EECash generation with free cash flow, afterinterest, of 4.3m (2014: 2.6m)*EENet debt reduction of 1.5m year on year to 1.5m(2014: 3.0m)**EETotal interest costs reduced by 9.1% to 0.23m(2014: 0.26m)Operational highlightsEE15.0% increase to data connectivity andbroadband revenues year on yearEEAcquisition of entire issued share capitalof Bluecherry Telecom Limited completedin April 2014Net debt ( m) 1.5m13141.53.0123.35.3Visit our website atwww.adept‑ for thelatest investor news and informationListen to our CEOwww.adept‑* Calculated as net cash from operating activities less interest paid** Calculated as cash and cash equivalents less short-term andlong-term borrowings† Before non‑recurring costsWWW.ADEPT-TELECOM.CO.UKAdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 201501

OVERVIEWAdEPT at a glanceAdEPT Telecom is one of the UK’s leading network independentproviders of voice and data telecommunications services.We provide solutions for thousands of companies of all sizesfrom multi-site, national call centres, public sector andhealthcare customers, to small business and home offices.Our solutionsData connectivityManaged servicesThe Company provides fixed linecalls, line rental, mobile, dataconnectivity products, managedservices and IP telephony tothousands of business andresidential customers acrossthe UK.Nationwide reachAdEPT offers a comprehensive rangeof business telecom products for allsizes of business. AdEPT has a highlyexperienced team of dedicated productspecialists who support customersfrom its UK-based service centres.02AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015AdEPT provides fast, low‑contention,higher quality broadband, leasedlines connections and MPLSnetworks using 21st CenturyNetwork technology.AdEPT offers award-winninghelpdesk engineer services witha team of highly trained productspecialists ready to assistcustomers with network solutionarchitecture and diagnostics.Solutions are available from 2Mb broadbandto 100Gb optical spectrum services at asurprisingly low cost.AdEPT has in place network partnershipswith leading equipment vendors, includingAvaya, Cisco and Medusa.EE AdEPT partners with all the majornetworks across the UK, ensuring thatthe customer can be provided with themost appropriate and cost effectivesolution to meet their requirements.EE Fully product trained engineer helpdeskavailable 24x7 who will carry outdiagnostics and rectification.EE All our data solutions are scalable,so they can keep pace as businessneeds evolve.EE Whether it’s a multi-site solution fora major UK company or an upgradeto IP telephony, AdEPT will tailora solution.EE On-site engineers specialisingin equipment installations oron‑site maintenance.EE Equipment and software supportdirect from the manufacturers,including Avaya, Cisco and Medusa,for everything from bug fixes tofirmware updates and escalations.EE International support for UK customerswho have expanded around the globe.

OVERVIEWSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSInboundIP telephonyAdEPT’s ‘cloud’ or network-basedinbound call handling solutionsoffer a simple and scalable way tomanage inbound calls, with onlineaccess enabling customers toimplement changes instantly.AdEPT’s IP telephony solutions, inpartnership with the UK’s largestdata centre, are fully backed by asecure and reliable network. Thisprovides a flexible and cost effectivealternative to carrying inbound andoutbound voice calls.AdEPT offers a comprehensiverange of traditional and nextgeneration business telecomproducts for all sizes of business.EE AdEPT has a specialist team of inboundtelephony experts that develop bespokecall management solutions.AdEPT provides both traditional calls andline rental and SIP and is therefore ideallyplaced to handle a fully managed migrationto next generation IP telephony.AdEPT provides great value of moneycombined with award-winning customerservice levels. This gives customers peaceof mind and a service they can rely on.EE Customers benefit from increasedfunctionality compared to conventionaltelephone lines.EE We support the critical businesscommunications for more than 15,000small, medium and large enterprisecompanies across the UK.EE The customer can decide how theywould like their calls answered,handled and directed.EE Low set up costs using network-basedsolutions means no additional hardware,integration or maintenance issues.EE Call queuing at network levelremoves strain from customers’telecoms infrastructure.EE The unique flexibility of our systemsmeans that no matter what typeof call handling solution is needed,we can deliver it.WWW.ADEPT-TELECOM.CO.UKEE There is little or no capital cost, meaningan end to obsolete phone systems.EE The AdEPT IP Solutions Team is trainedto handle everything from solutionsarchitecture to physical installationand implementation.Fixed lineEE From single analogue business linesto complex digital multi-site solutions,the AdEPT range of products andservices is scalable.EE AdEPT has strategic relationshipswith all tier-1 suppliers, includingBT, Vodafone and TalkTalk Business,to ensure the best possible choiceof networks.AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 201503

OVERVIEWChairman’s statementRoger Wilson, Non-executive ChairmanFor the year ended 31 March 2015AdEPT Telecom plc (‘AdEPT’ or the ‘Company’)delivered another strong trading performance,and increased value for shareholders.Review of operationsI am pleased to report a twelfth consecutiveincrease to underlying EBITDA, up 13.5% to 4.6m. EBITDA margin has improved furtherfrom 19.4% to 20.8%.In April 2014 AdEPT completed its nineteenthacquisition, the entire issued share capital ofBluecherry Telecom Limited which was fullyintegrated into the customer managementsystem in Tunbridge Wells, Kent in April 2014.SummaryThe Company has improved its EBITDA by13.5% through direct sales, the acquisitionof Bluecherry Telecom Limited, managementof wholesale supply contracts and continuedoperational efficiencyEEContinued deployment of 21CN dataconnectivity has led to data and broadbandrevenues increasing by 15% in the yearEEDividends increased by 58% year on yearto 4.75p per share as a result of continuedstrong free cash flow generationEENet borrowings were reduced to 1.5m atMarch 2015 despite undertaking a customerbase acquisition and increasing the dividendEEIn May 2015 the Company acquired CentrixLimited, a leading specialist provider ofcomplex unified communications04AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015AdEPT’s continued strong cash flowgeneration resulted in 4.3m of free cashflow after interest. This free cash flow is aftermaking corporation tax payments of 0.3m,which is considerably lower than the prioryear as that included the transition to largecompany status for corporation tax purposes. 2.2m of free cash has been used to fund thecontingent consideration of the customer baseacquisition from Bluebell Telecom Limitedin August 2013 and the initial considerationfor the acquisition of the entire issued sharecapital of Bluecherry Telecom Limited. 0.7m of free cash was used to meet dividendpayments to shareholders as the Companycontinues to apply its progressive policy.The issue of new equity during the year todirectors increasing their shareholdings followingthe exercise of share options resulted in a cashinflow of 0.2m, which was used by the Companyto repurchase 122,203 of its own shares duringthe year ended 31 March 2015 at an averageprice of 148.9p pursuant to the stock exchangeannouncement issued on 18 December 2014.The Board believes that share repurchasescheme can improve stock liquidity andincrease value to shareholders.In line with its progressive policy, AdEPT hasincreased the dividend year on year by 58.3%,declaring a final dividend of 2.50p per ordinaryshare (2014: 1.50p), making total dividendsdeclared during the year ended 31 March 2015of 4.75p per ordinary share (2014: 3.00p). TheBoard is confident that the continued strongcash generation will support a progressivedividend policy.

OVERVIEWSTRATEGIC REPORTAdEPT continues to provide voice and dataservices to its customers by offering best ofbreed products from all major UK networks.Continued deployment and development of21CN data connectivity products with the tier-1network partners has led to data and broadbandrevenues increasing by 15.0% in the year ended31 March 2015. As the demand for faster dataconnectivity speeds continues AdEPT has seenfurther customer orders for 1–10Gb services,particularly from its base of university andcollege customers.Growth strategyThe strategy of the Company remains that ofincreasing EBITDA and free cash generationby concentrating organic sales efforts onwinning direct new business with largercustomers, particularly in the publicsector, and complementing this withearnings‑enhancing acquisitions.AdEPT has been highly successful in gainingtraction in the public sector space during thepast two years with a number of organic contractwins with public sector clients, including25 councils. During the year we also wonour first NHS Trust (Berkshire) and twohousing associations.We continue to concentrate on winningframeworks rather than individual tenders.In July 2014 AdEPT successfully renewedits approved supplier status for a furtherfour years with which allows AdEPTto continue to sell data connectivity to UKcolleges and universities. In October 2014AdEPT successfully renewed its status fora further two years as the sole supplier underthe ESPO Telecom Framework 7 for calls,lines, broadband, super-fast internet accessand SIP to public sector and registered charitiesnationwide. In February 2015 AdEPT wasalso awarded approved supplier status underthe G-Cloud 6 RM1557vi framework. This isin addition to AdEPT’s existing frameworkagreement with the Crown CommercialService under the RM1035 framework.On 1 April 2014 the Company acquired the entireissued share capital of Bluecherry TelecomLimited. The acquisition consideration wasfunded from operating cash flow.WWW.ADEPT-TELECOM.CO.UKCORPORATE GOVERNANCEPost-balance sheet eventsAfter the balance sheet date, on 22 April 2015the Company signed a new five year 15mrevolving credit facility agreement withBarclays Bank plc. This longer-term facilityreplaced the previous 5m revolving creditfacility, which had an 18 month term remaining,and the term loan which was due for repaymentby September 2015. The new revolving creditfacility offers the Company significantly greaterfunding flexibility and is on improved commercialterms when compared to the facility whichit replaces.On 1 May 2015 the Company acquired theentire issued share capital of Centrix Limited(‘Centrix’) for an initial cash consideration of 7m. Further consideration of between Niland 3.5m will be payable, also in cash,dependent upon performance of Centrixpost-acquisition. Centrix, based in Hook, is awell-established UK-based specialist providerof complex unified communications, Avaya IPtelephony, hosted IP solutions and managedservices. Centrix offers its clients the deliveryof complex unified communications and managedservice solutions, which is an increasingrequisite for AdEPT’s existing and targetedenterprise and public sector customer base.Our revenue from public sector and healthcarewill more than double with the acquisition.Centrix skills and product set will complementand enhance AdEPT’s existing services andwe will retain the office and customer serviceoperation in Hook, Hampshire. Approximately80% of Centrix revenue is generated fromrecurring revenue streams. AdEPT andCentrix have both adopted capital assetlight strategies and are dedicated to offeringa full suite of flexible data and unifiedcommunication strategies.Our new banking facilities have enabled theBoard to continue to identify and evaluatestrategic acquisitions that are consideredto meet the criteria of complementingexisting business whilst adding value to ourshareholders. The organic growth strategycontinues to be winning larger customersand existing client retention. We also continueto target greater cross-sell penetration anddevelopment of new products.FINANCIAL STATEMENTSEmployeesThe improved profitability and free cash flowgeneration this year was made possible by thecontinued hard work and focus of all employeesat AdEPT. As a company we are immenselyproud of the track record we have createdover the last twelve years and on behalf ofthe Board I would like to take this opportunityto thank all of our employees for theircontinued hard work.Shareholder benefits schemeThe AdEPT shareholder benefits scheme hascontinued to attract new members during theyear. The scheme, which is available to allshareholders owning a minimum of 250 shares,provides eligible shareholders with freeresidential line rental worth approximately 154 per annum for as long as they remaineligible shareholders.OutlookThe improved EBITDA this year was underpinnedby focus on underlying profitability throughimproving margins on customer contracts,operational efficiencies, tight credit controland strategic acquisition of a complementarycustomer base. The Board is confident thatcontinued strong cash generation will supporta progressive dividend policy.The business focus for the coming year remainson continued development of organic salesthrough leveraging AdEPT’s approved supplierstatus on the various telecom frameworks,maintaining profitability and cash flow generation,which will be used to reduce net borrowingsand/or fund suitable earnings-enhancingacquisitions, if identified. We will thereforecontinue to invest in our organic sales channels,work with our network partners to developnew products, complement this with furtherinvestment in retention activities to retaincustomers and work with strategic partnersto actively identify potential acquisition targetswhich meet the Company’s requirements.Roger WilsonNon-executive Chairman10 July 2015AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 201505

STRATEGIC REPORTHow we workWe have a robust and sustainable business model thatengages our expertise to drive growth and generate profit.The Board believes that AdEPT operates a resilient businessmodel with excellent cash generation and has a strongcustomer proposition which will present further opportunitiesin the coming year.Our marketsThe market in which we operateAdEPT is one of the UK’s leading independent communications integrators,specialising in multi-site and multi-product solutions.The UK market for business telephony is highly fragmented with more than 900 providers.AdEPT was originally established as a traditional fixed line service provider; however, theCompany is successfully transitioning to a complete communications integrator providinga full suite of data connectivity and broadband services.Emerging marketsNext generation services continue to evolve both technically and commercially.The take-up of IP telephony services continues to be small scale compared to traditional fixedline telephony, partly due to regulatory pressures on fixed line pricing. However, IP telephonyis likely to increasingly displace legacy voice infrastructures. AdEPT is ideally positioned tohandle the transition from traditional to next generation services by being able to providea single bill solution for both technologies.Key trendsOutlookThe market for voice revenues continues to be undervolume pressure in contrast to data revenue.Following the recent acquisition of Centrix Limited, a leadingUK-based specialist provider of complex unified communications,the Board considers that there are an increased number ofopportunities for AdEPT as the product portfolio of the Grouphas been extended to include services such as managedservices, Wi‑Fi and Avaya IP telephony.The continued deployment of 21CN network infrastructure andproducts combined with the ever increasing demand for fasterdata connectivity and more capacity continue to drive businesstelephony requirements. The increasing availability of super-fastbroadband services has continued, with services now availableto more than 60% of the UK. AdEPT has continued to broadenits product offering of data, broadband and IP telephony servicesto ensure that it can offer all of the latest technology. The increaseduptake of ‘cloud’ or network-based services for business contactcentres is expected to continue as businesses utilise businesstelephony to achieve their own growth objectives.In addition, AdEPT continues to maintain its approved supplier statuson a number of public sector frameworks which will be leveragedto increase the Company’s presence as a supplier to the public andhealthcare sectors. This is to complement the continued consolidationof the fragmented UK telephony market through the strategicacquisition of other telecom businesses and customer bases.Public sector and healthcare focusAdEPT provides an integrated telephony and call centre solution for the overseas arm ofAmerica’s leading provider of private healthcare services in over 30 world-class privatehospitals and medical centres across the UK. The customer requirement encompassesa diverse mix of users including back-office staff, consultants, patients, inbound call centreagents and management. Due to the critical nature of the customers’ business it is vitalfor them to have a communications partnership and solution on which they can rely.AdEPT provides a resilient unified telephony solution which also integrates with thecustomers Meditech patient portal, crash-call paging and nurse call systems.The services provided range from basic telephony to PCI-compliant voice recording in theaward-winning contact centre and the latest IP DECT wireless solution, which integrateswith door entry alarms and monitors gases alarms too.As well as providing voice and data hardware we also provide the ISDN, SIP and gigabit backbonesbetween sites for enhanced resilience and future-proof delivery of more products and services.06AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015

OVERVIEWSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOur business modelNetwork partnersFixed lineIP telephonyAdEPTsolution designand service LBUSINESSCUSTOMERUK client baseWWW.ADEPT-TELECOM.CO.UKAdEPT’s focus with its carrier partners is to develop andprovide cost effective solutions with enhanced features andresilience. AdEPT selects its carrier partners on the basisof technical and financial stability, in order to manage thesupply risk associated with a business critical supply.AdEPT solution design and service wrapAdEPT combines multi-product solutions froma number of carrier partners to provide bespokesolutions tailored to meet the specificrequirements of customers.AdEPT provides a single invoice solution for customerscombined with award-winning customer service andsupport available at a lower spend level than other largertelecommunications businesses. AdEPT provides dedicatedaccount management for customers spending as little as 400 per month on telecommunications.InboundPREMIERCUSTOMERNetwork partnersAdEPT has established relationships withall of the major UK network operators andcommunication suppliers, working with tier‑1carrier partners to develop products andsolutions which meet the ever changingneeds of customers.UK client baseAdEPT provides competitively pricedcommunications solutions for all sizesof UK‑based clients spread acrossa wide range of business sectors.AdEPT and its sales channels work with its customerbase to develop appropriate communications solutions.AdEPT Telecom is widely recognised as a multi-sitemulti-product specialist, with more than 700 multi-sitecustomers taking a range of products. AdEPT is increasinglyfocused on Premier, Public Sector and Healthcare customerswho can benefit from AdEPT’s ability to provide a fullcommunication solution.AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 201507

STRATEGIC REPORTOur strategy and KPIsOur strategy focuses on four key areas, enabling the Companyto expand its product range, investing in customer retention,increasing public sector presence by leveraging frameworksand identifying strategic acquisition opportunities.ProductsAdEPT was originally established asa fixed line telecom provider but isdiversifying its product range to becomeone of the UK’s leading independentcommunications integrators.CustomersOur strategy isbased aroundfour key areas:Our aimsDevelopment and expansionof our product rangeInvestment in customerretention activitiesTo constantly monitor product development to ensure thatwe can offer all of the latest and best of breed products.Improve customer retention by maintaining the higheststandards of customer service combined with a highlycompetitive product offering.EE Added new products to the portfolio, such as 40Gband 100Gb OSA, and successfully sold these intothe customer base.EE Continued investment in retention strategiesto retain customers.EE Won new larger customers and retaining existing clientsthrough providing dedicated account management.EE Our ‘cloud’ and network-based next generationservices have been rolled out to more customers.Financial performanceGross marginEBITDA marginNet debt37.6%20.8% 1.5m15AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015121314151213141.5143.037.6133.336.412(2014: 3.0m)5.334.5(2014: 19.4%)32.2(2014: 36.4%)08EE Maintaining high levels of customer service willremain a critical element of our business model.17.8Our resultsEE Data services will be a key area of expansion as thedemand for faster data connectivity speeds continues.Continue to evaluate new connectivity products andintroduce them to the portfolio.16.7Oursolutions20.8OurachievementsOur business is focused on providinghigh levels of customer service. Ouraward‑winning UK-based customerservice team has all the necessary skillsto give our customers peace of mindand a service they can rely on.19.4Key areas15

OVERVIEWSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSFrameworksAcquisitionsUtilising approved supplier statusIdentify strategic acquisitionsto add shareholder valueAdEPT is focused upon increasing itspublic sector presence and helping thosecustomers achieve the budget reductionsand cost initiatives they have been set.The Board continues to identify andevaluate strategic acquisitions thatare considered to meet the criteriaof complementing existing businesswhilst adding value to our shareholders.Further develop the existing public sector relationshipsand forge new partnerships with public sector customers.The operational and financial platform in place hasbeen developed to provide further efficiencies fromincreased scale.EE Achieved approved supplier status on three publicsector frameworks.EE Acquired and fully integrated of 20 customer basesto date, including Bluecherry Telecom in the currentyear and Centrix post-year end.EE Leveraged our position on the frameworks to bringin a large number of public sector customers.EE Careful planning and rigorous operational andfinancial due diligence was undertaken to minimiseintegration and execution risk.EE Continue to review the development of public sectorframeworks and ensure that AdEPT remains in aposition to be able to take advantage of opportunitiesas they arise.EE The executive director team and the Board willcontinue to monitor all potential acquisition targetsthat meet the criteria of complementing existingbusiness and adding value.Non‑financial performanceDividend per shareCustomer credit collection15.76p4.75p24 83.031(2014: 28 days)1.50.51315.7611.2012(2014: 3.0p)14.1311.35(2014: 14.13p)4.75Adjusted earnings per share15AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 201509

STRATEGIC REPORTStrategic reportJohn Swaite, Finance directorFocus on underlying profitability combined with strategicacquisition and high free cash flow conversion hasdelivered increased EBITDA whilst reducing net debt.This has supported an increase to dividends.Principal activities and review of businessThe principal activity of the Company is theprovision of voice and data communicationservices to both domestic and businesscustomers. A review of the business is containedin the chairman’s statement on pages 4 to 5and the highlights are summarised in thestrategic report on pages 6 to 14.RevenueDuring the year AdEPT has continued itsdiversification from a traditional fixed line serviceprovider towards next generation products. Totalrevenue generated from data, mobile, inboundand other services represented 27.4% of totalrevenue in the year ended 31 March 2015(2014: 24.7%).Total revenue increased by 5.8% to 22.1m(2014: 20.9m):SummaryEEEBITDA increase of 13.5% to 4.6m was thetwelfth consecutive increase since AdEPT’sinception in 2003EEStrong free cash flow, before interest, of 4.3m has been used to fund the acquisitionof Bluecherry Telecom and the progressivedividend policyEEAdjusted earnings per share increased by11.5% to 15.8p per share giving 3.3x dividendcover at March 2015EEIn April 2015 the Company signed a new fiveyear 15m banking facility with Barclays10AdEPT TELECOM PLCANNUAL REPORT AND ACCOUNTS 2015EE Traditional fixed line revenues increasedto 16.0m (2014: 15.7m), which is largelya reflection of the contribution from theBluecherry Telecom Limited acquisition whichhas been partially offset by the continuedimpact of the OFCOM regulatory price controlfor mobile termination costs reducing callspend from landline to mobile networks.In addition, call volume reductions arisingfrom continued substitution with emailand mobile-based telephony applied furthertop-line pressure to call revenues. However,the Company’s reliance on call revenuescontinues to reduce with call revenue providingonly 25.3% of total revenue in the year ended31 March 2015 (2014: 29.3%).EE Data and broadband product revenuesincreased by 15.0% to 3.8m (2014: 3.3m).AdEPT has continued to make progressin expanding the number of circuits andconnections from new customer additionsand through cross-selling into the existingcustomer base. As the demand for fasterdata connectivity speeds continues AdEPThas seen further customer orders for1–10Gb services.

OVERVIEWSTRATEGIC REPORTThe Company continues to focus on productsdelivering fixed monthly revenue streams toreduce revenue volatility. The proportion ofrevenue, which is fixed monthly values, increasedto 65.9% of total revenue for the year endedMarch 2015 (2014: 63.3%) following the continuedfocus on multi-product sales (calls, line rental,broadband and data connectivity products)and the enhancement of the data connectivityproduct portfolio.AdEPT has been highly successful in gainingtraction in the public sector space during thelast two years through leveraging its approvedstatus on various frameworks; this contractsuccess is included in the 2015 revenue figures.In July 2014 AdEPT successfully renewed itsapproved supplier status for a further four yearswith under which AdEPT is one of onlya small number of companies approved to selldata connectivity to UK colleges and universities.In October 2014 AdEPT successfully renewedits status for a further two years as the solerecommended supplier to public servicebodies and registered charities for calls, lines,broadband, super-fast broadband (fibre) andSIP trunks. In February 2015 AdEPT was alsoawarded approved supplier status under theG-Cloud 6 RM1557vi framework for softwareas a service (SaaS). This is in addition toAdEPT’s existing framework agreement withthe Crown Commercial Service under theRM1035 framework.CORPORATE GOVERNANCEGross marginThe price of calls to mobiles continued todecrease during the year ended March 2014as a result of the OFCOM regulatory impactof reduced mobile termination rates. However,gross margins have been maintained at anabsolute and per cent. level through closemonitoring of customer profitability and supplychain management of wholesale contracts.Profit after tax and earnings per shareThe profit for the year, after taxation, amountedto 1.53m (

system in Tunbridge Wells, Kent in April 2014. AdEPT’s continued strong cash flow generation resulted in 4.3m of free cash flow after interest. This free cash flow is after making corporation tax payments of 0.3m, which is considerably lower tha