Annual Report & Financial Statements 2022 for the period ended 1 January 202 3 Enjoy a taste of our world 2 Annual Report & Financial Statements 2022 My main focus with creating a restaurant is to ensure our guests fall in love with Lebanon and its bold flavours and generous hospitality. Tony Kitous, Founder Comptoir Group Did you know? In 2022, we entertained 1.5m guests – they could fill 17 Wembley stadiums 04 At a glance Our history 04 06 08 10 12 Comptoir Group PLC snapshot Our brands Our food Our environmental, social, governance highlights 14 Strategic Report Chairperson’s statement 15 16 18 23 31 Chief Executive’s review 2022/23 Financial highlights FD review Strategic Report Strategic Report Section 172 Statement 32 Corporate Governance Statement of Corporate Governance 32 36 38 40 Report of the Directors Statements of Directors’ responsibilities Independent Auditors’ report 47 Financial Statements 47 Consolidated statement of comprehensive income 48 49 50 51 58 83 92 Consolidated balance sheet Consolidated statement of changes in equity Consolidated statement of cash flows Principal accounting policies for the consolidated financial statements Notes to the consolidated financial statements Parent Company accounts (under UK GAAP) Note of annual general meeting Annual Report & Financial Statements 2022 3 At a glance: Our history Comptoir Group PLC snapshot Our brands Our food Our environmental, social, governance highlights For the love of food Our history Founder Tony Kitous’ relationship with food began under his mum’s influence. The eldest of seven children, his mum - like many Arabic mothers of the time - would spend six hours a day in the kitchen. He still has strong memories of the fisherman who used to visit in his little truck and sell them fresh sardines, which his mother would either stuff or marinate. When I was eight my mother used It was a holiday to London when Tony was to help me prepare harissa and merguez sandwiches and make 18 that really fired his imagination and his passion to make something of himself. He probably didn’t realise at the time, but this fresh lemonades, and I would set ‘holiday’ was to last 26 years! He loved London up a stall outside the football stadium near my house. It’s about and knew that this is where he wanted to live, but also knew that he'd need to work hard to survive. Living in a squat, he managed making people feel welcome - to find work in restaurants. But the 18 hour it’s about hospitality and I naturally just love welcoming people, even on a pavement. Tony Kitous, Founder Comptoir Group days didn’t feel like work as he was driven by his love of food and hospitality. It certainly paid off, by the age of 22 Tony had opened his first restaurant in Wigmore Street called Levant. 4 Annual Report & Financial Statements 2022 Our vision: To constantly surprise and delight our guests by taking them on a memorable and distinctive journey through food and culture, celebrating Lebanese flavours. Excellence: We always strive for the highest standards and quality. Our brands are born out of a passion for food… the flavours, the textures, the colours and the smells. It can transport you, and as ambassadors of Lebanese food and ambience we transport people every day. Tony Kitous, Founder Comptoir Group Did you know? We served 105K portions of hommos – that would fill two swimming pools Annual Report & Financial Statements 2022 5 Building something special A Comptoir Group PLC snapshot From humble beginnings, Tony has built something truly special. But at the heart of it is still a simple concept…to make Lebanese food as popular as Italian food. We currently have 21 restaurants helping us achieve this goal (27 Including franchise): 16* 1 2 2 *22 including franchise. 6 Annual Report & Financial Statements 2022 Creativity: We’re continually exploring new ideas and approaches to delight our guests and inspire our team members. 597 staff (557 excl Support Office) who are a part of the family: Working in 21 restaurants across 9 geographical locations in the UK 27 different nationalities Serving 1,495,085 meals in 2022 alone Did you know? We made 376k portions of flatbread – the same weight as eight elephants I have always had a need to explore and discover new things. Each of our Comptoir Group brands is an extension of my sense of adventure. Tony Kitous, Founder Comptoir Group Annual Report & Financial Statements 2022 7 Unique dining experiences for everyone Our brands The Comptoir Group PLC comprises Comptoir Libanias, Yalla Yalla, Kenza, and Shawa: Locations: Manchester / Birmingham / Exeter / Bath / Reading / Oxford / London Bridge / Gloucester Road / Wigmore St / Chelsea / Kingston / Broadgate / South Kensington / Westfield and Bluewater (+franchises). Translated, Comptoir Libanias means ‘Lebanese Counter’ and that captures the brand perfectly. Everyone is welcome to eat the authentic Lebanese food in a friendly and relaxing environment. Locations: Westfield Shepherd's Bush and Bluewater. Tony wanted to share the taste of Shawarma with the United Kingdom and Shawa was born. The creation of wraps is quite a spectacle, as guests watch the team expertly carve the meat. Shawa is a fast takeaway offering healthy food suitable for everyone. Locations: Devonshire Square. Kenza restaurant serves authentic, Lebanese cuisine. Our fun and relaxed approach is accentuated with authentic, traditional, lighting and furnishings that will transport you to Marrakesh. Locations: Fitzrovia, Soho. Yalla Yalla joined the family in December 2016 and our restaurants are welcoming and unique in style offering time-honoured Lebanese recipes, passed down through generations and perfected along the way. 8 Annual Report & Financial Statements 2022 Authenticity: We always stay true to our roots and traditions, while embracing innovation and evolution. Did you know? Our guests consumed one million falafels – enough to fill a double-decker bus Growing up in Algeria, I was always close to my mother and, after all this time, she’s still the best cook I know. It’s down to her insistence on the freshest ingredients and commitment to quality - something I always carry with me. Tony Kitous, Founder Comptoir Group Annual Report & Financial Statements 2022 9 Where quality meets authenticity Our food Tony doesn’t just like food, he loves food. And that love doesn’t come through simply in the preparation; the way our ingredients are sourced is proof of our commitment to quality. It’s easy to say you’re authentic, but it takes hard work and commitment to stake your reputation on it. Hommos is made to a unique family recipe; no one makes it like we do. Kibbeh, Sambousek and falafel are handmade locally by experienced chefs. Our Central Production Unit (CPU) supports all our outlets to make sure they have what they need, when they need it. This keeps consumer experiences consistently impeccable – whether at home or in one of our restaurants. 10 Annual Report & Financial Statements 2022 Community: We give back to the communities we serve and have a positive impact on the world around us. Baba ghanoush is made using specially imported roasted aubergines to give it that unique smoky flavour. Pickles are carefully selected for flavour and authenticity and imported directly from Lebanon. Chateau Ksara is Lebanon’s oldest winery, located in the Bekaa Valley. They produce exceptional wines, which complements our food perfectly and have done since we opened our first restaurant. Annual Report & Financial Statements 2022 11 The right food, the right surroundings, the right way Environmental, Social, Governance We care about the health of our guests and the health of our planet. That’s why we’ve made it our goal to do things right: We serve food which is naturally vegetarian, and the majority of our mezze dishes are plant-based which helps our carbon footprint Our central kitchen and efficient operations ensure minimum wastage Freshly prepared food reduces the reliance on energy-hungry processes and storage Every member of the exec team has signed up to support our journey towards carbon neutral status. We aim to achieve the following in 2023: Switch to fully recyclable packaging Reduce carbon emissions by consolidating our deliveries Eliminate the use of chemicals harmful to the environment Improve transparency in our supply base – increasing our knowledge of where products are from and how they are sourced Only use renewable energy 12 Annual Report & Financial Statements 2022 Teamwork: We always work collaboratively to achieve our goals and create a positive, supportive culture. Our teams are diverse and represent many different communities. The positive impact we can have on those communities and the wider environment has always been important to Comptoir Group. Tony Kitous, Founder Comptoir Group Annual Report & Financial Statements 2022 13 Comptoir Group PLC – Annual Report For the period ended 1 January 2023 Company information Directors: Secretary: Company number: Registered office: Business address: A Kitous Founder and Creative Director N Ayerst (Appointed 17 October 2022) Chief Executive M Toon Finance Director JM Orieux (Appointed 1 August 2022) Non-Executive Director B Lafon (Appointed 1 August 2022) Non-Executive Chairperson C Hanna (Resigned 2 August 2022) Chief Executive R Kleiner (Resigned 2 August 2022) Non-Executive Chairperson M Toon 07741283 Unit 2, Plantain Place, Crosby Row, London Bridge SE1 1YN Unit 2, Plantain Place, Crosby Row, London Bridge SE1 1YN Nominated Advisor and Broker: finnCap Group PLX, One Bartholomew Close, London EC1A 7BL Auditors: Solicitors: Registrars: UHY Hacker Young, Quadrant House, 4 Thomas More Square, London E1W 1YW Howard Kennedy LLP, No.1 London Bridge, London SE1 9BG Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL 14 Annual Report & Financial Statements 2022 Strategic Report Chairperson’s statement I am pleased to report on the Group’s annual results for the 52-week period ended 1st January 2023. At year-end, we were trading from 21 managed restaurants and 6 Franchise restaurants, having opened in H2, 2 new franchise restaurants, in Stansted and Qatar. FY 2022 was a pivotal year for the Group as it looked to recover from the challenges presented by the pandemic, the slow return to a new normal without the level of government support received in FY 2021, and the need to address the unexpected and unprecedented inflationary pressures on food and energy prices. Adjusted EBITDA for the period was £6.3m v £6.4m. A new Board was formed effective August 1, which led to the appointment of a new CEO and executive team. Against the challenging backdrop described above, the Board chose to reinvest in the business and build strong foundations for growth and recovery. By year-end staff numbers had increased by a quarter in order to deliver a Back-to-Basics programme launched in September 2022, which included, for instance, the launch of a re-engineered menu to help value-conscious consumers. Within 5 months, our overall customer NPS score had doubled, and the staff turnover rate also improved by 10%. Comptoir Group has good cash reserves, new and energetic teams, a stable of strong brands, and a new focus on growth, underpinned by our unique position in the sector: celebrating Lebanese cuisine and hospitality in a uniquely vibrant environment. We are cautiously optimistic about the near term as footfall resumes, inflationary pressures are known, and we start to see traction from the initiatives launched over the last 6 months. I would like to thank our teams for their commitment and flexibility as we evolve the way we serve our guests, as well as our suppliers, partners, and shareholders for their ongoing support. Together, we will continue to drive the success of Comptoir Group, building an even brighter future for our business and our people. Beatrice Lafon - Chairperson 09 May 2023 Annual Report & Financial Statements 2022 15 Strategic Report Chief Executive’s review Comptoir Group is a dynamic, bold and innovative hospitality company committed to delivering exceptional hospitality experiences that celebrate the rich cultural heritage of Lebanon. With a passion for our food, and a focus on quality ingredients, our restaurants offer an authentic taste of the region’s diverse and vibrant cuisine. We are dedicated to providing outstanding guest hospitality by creating a welcoming and inviting atmosphere that inspires guests to return time and time again. At Comptoir Group we are driven by a desire to share our love of our delicious food with the wider world. The Group entered 2022 in good financial shape. Sales recovered throughout the year against the backdrop of the worst cost-of-living crises in recent memory. Food, labour and energy inflation, as well as industrial unrest, meant the business had a number of challenges to tackle, none of which were expected. Beyond addressing the challenges mentioned above, Comptoir Group with the full support of the Board and the Senior Leadership Team looked to position itself for future growth with significant investment in people, ongoing updates to our restaurants and increasing its focus to become a carbon neutral operator. In 2022 we moved to 100% recyclable packaging in Comptoir Libanais and signed our first contract for green electricity. 2022 was a period of transition for the Group and I am delighted and honoured to be in a position as CEO to deliver my first report on the performance across the business. Trading Comparisons to prior years are difficult due to the extended impact of Covid related restrictions between March 2020 and January 2022. However, for the last 6 months of the financial year when compared to 2019 (that being the last comparable period of no interruption) we saw encouraging like-for-like growth, which against the backdrop of external pressures, we believe to be a good trading performance. 16 Annual Report & Financial Statements 2022 Comptoir Group are not immune to the inflationary pressures on the Hospitality industry in general and we took steps to mitigate this impact without compromising the offer to our guests. A 2-year contract hedge on utilities ended in September 2022, and we fixed for another 12 months until September 2023. Supply chain management was brought in-house for the first time with a clear strategy for control and consolidation that helped mitigate the worst of the external turmoil. During quarter 4 and continuing into 2023 we carried out significant menu re-engineering exercises across the Group. This covered both food and drink and allowed us to offset some of the inflationary pressures and VAT increases to protect margins with only modest price increases. We continue to closely monitor guest sentiment in respect of the value proposition. Our Central Production Unit enables us to control quality and respond quickly to changing circumstances. People The teams across all our restaurants and at the Support Office once again showed exceptional commitment to providing our guests with a high-quality experience. We are privileged to have a significant proportion of the team who have been with us for many years and this commitment and experience have enabled us to not lose a single day of trade over the last 3 years due to staffing issues. We are back near to our optimum employment levels and have strong retention KPIs, together with improved terms and conditions for our teams. During the year we improved pay rates, bonus potential and added or enhanced other benefits such as health care as well as financial and mental well-being support. We introduced incentives relating to guest satisfaction scores ranging from mystery guest scores to google reviews. In anticipation of future expansion and strategic planning we have strengthened our management structure throughout the year with key appointments in marketing, procurement and food development. brands have a great opportunity for organic growth with a clear market positioning and renewed focus. We are in a position to open new restaurants across the different brands with an experienced and motivated leadership team to execute the Groups strategy. The cost pressures of the last 12 months have impacted profitability, and this will continue into 2023. Whilst we would expect costs to remain higher than they were prior to the war in Ukraine we continue to mitigate these effects through our new supplier partnerships and menu engineering. Energy prices have already started to retreat, and our flexible hedge allows us to take that benefit as it occurs. I would like to thank all of my colleagues in our restaurants and Support Office for their commitment during a challenging year. Comptoir Group is able to build on good foundations and we are cautiously optimistic about the near term. Nick Ayerst – Chief Executive Officer 09 May 2023 Technology Technology is an important element of the Comptoir Group strategy to help enhance the guest journey as well as improve the efficiency of the restaurants and support functions. We continue to invest in both restaurants and Support Office in respect of hardware and software with a particular focus on learning about our guests and how best to interact with them. Franchising Franchising is an integral part of the Group’s strategy and one that will continue to be focused on over the coming year. In 2022 two new restaurants opened in Travel Hubs: Doha Airport, Qatar and London Stansted Airport, both through our long-term partner HMS Host. Both have performed ahead of expectations, and we continue to review opportunities both in the UK and further afield with existing and new franchise partners. Digital Delivery remains an important channel for the business, and we intend to maintain the previously adopted multi-channel approach to ensure Comptoir is widely available to our guests. As dine in returns we have had to adapt operations to satisfy both channels’ competing expectations. Looking ahead While economic uncertainty and inflationary cost pressures are set to persist in the short term, we believe Comptoir Group is in an excellent position to capitalise on opportunities in the marketplace. Comptoir Libanais is a vibrant and differentiated all-day casual dining brand delivering fresh and healthy food and naturally attractive to those looking for vegan or vegetarian options. Shawa our fast casual offering has huge potential we believe in the expanding QSR/fast casual marketplace and provides an excellent alternative when assessing properties and opening pipelines. Our destination restaurant Annual Report & Financial Statements 2022 17 Strategic Report 2022/23 Financial highlights – FD Review Overview The financial results for 2022 although impacted by the government advice to stay at home throughout December 2021 and into 2022, benefitted from all restaurants being open to trade throughout the year compared to various periods of closure during 2020 and 2021. Input cost increases were unavoidable. On the 1st August Beatrice Lafon and Jean Michel Orieux joined the Board as Chair and NED respectively, with the appointment of Nick Ayerst as CEO following in October. The KPIS of the Group performance are summarised in the table below: Group financial summary Revenue Gross profit Other costs Profit for the period Cash generated from operations Adjusted EBITDA ( Pre IFRS)1 Net Cash2 2022 £31.0m £24.4m £23.8m £0.6m £4.4m £2.8m £7.7m 2021 £20.7m £16.9m £15.3m £1.6m £4.7m £3.0m £7.1m Var 49.9% 44.3% 56.0% -64.2% -8.8% -5.9% 9.4% 1 Defined as statutory operating profit before interest, tax, depreciation and amortisation (before application of IFRS16 and excluding exceptional costs) and reflects the underlying trade of the Group 2 Defined as cash and cash equivalents less loans and borrowings Revenue Gross profit Revenue increased by 49.9 per cent to £31.0m, which compared to a total of £20.7m in 2021. This was, in the main, due to the return to a more normalised trade position with all restaurants trading during the year compared to the previous 2 years which were heavily impacted by Covid-19. During the year we opened 2 more Franchise restaurants with our partners HMS Host in Qatar and London Stansted Airport. Our Franchise partners are an important part of the business and the 6 restaurants contributed system sales of £7.4m over the course of the financial year. At the start of the financial year, we closed 1 restaurant in Stratford. The removal of the reduced rate of VAT which had benefitted the Group in 2021 had an impact of £2.7m. The support offered by the government in respect of VAT came to an end at the end of Q1 2022. At this point it returned to 20 per cent from the previous level of 12.5 per cent that was in place from Q4 2021. Prior to that VAT had been 5 per cent since July 2020. Consequently, FY2022 benefited less than FY2021 by £2.7m which equates to a 1.7 ppts reduction in the gross profit margin. The Group gross margin percentage reduced in 2022 from 81.8 per cent in 2021 to 78.7 per cent. Inflation in 2022 following the pandemic of the prior 2 years increased at an unprecedented rate and this was exacerbated by the war in Ukraine. In particular oils, protein, fresh produce and dairy prices rose at various times in the year and were the main contributor to the remaining gap to the prior year. 18 Annual Report & Financial Statements 2022 Other costs All other trading costs increased by 56 per cent which is in part driven by the increased level of trade in FY2022 but also the exceptional costs that occurred during the period. An exceptional cost of £1.0m was recognised in the year in respect of the reconstitution of the Board in August 2022. Adjusted EBITDA (pre-IFRS 16) Adjusted EBITDA (pre IFRS 16) is utilised by the Group as the primary metric in the assessment of profitability. A full reconciliation of both pre and post-IFRS 16 is shown below. The Group generated an Adjusted EBITDA (pre IFRS 16) of £2.8m compared to £3.0m in FY21. With the previously described negative impact of inflation and VAT this result allows us to remain confident in our brands and offer. Sales 31,046,546 31,046,546 20,711,257 20,711,257 Post IFRS 16 1 January 2023 Pre IFRS 16 1 January 2023 Post IFRS 16 2 January 2022 Pre IFRS 16 2 January 2022 £ £ £ £ Adjusted EBITDA: Profit before tax Add back: Depreciation Finance costs 902,450 578,609 1,525,167 1,259,709 3,252,841 1,124,243 3,659,196 1,372,645 1,042,697 94,078 822,094 336,356 21,057 266,255 Impairment of assets 78,266 - EBITDA 5,276,254 1,796,930 6,342,813 2,919,666 Share-based payments expense Restaurant opening costs Loss on disposal of fixed assets 15,377 - 8,188 15,377 - 8,188 32,436 10,489 38,098 32,436 10,489 38,098 Exceptional legal and professional fees (Note 3) 1,002,054 1,002,054 - - Adjusted EBITDA 6,301,873 2,822,549 6,423,836 3,000,689 Annual Report & Financial Statements 2022 19 Strategic Report 2022/23 Financial highlights – FD Review Cash flow and balance sheet Dividend Cash generated from operations decreased to £4.4m in FY22 (FY21 £4.7m). The decrease was driven by the return to standard working capital agreements post pandemic. The Directors do not recommend the payment of a dividend, believing it more beneficial to use cash resources to invest in the Group in line with our strategy. Cash expenditure on property, plant and equipment increased as the Group invested in the refurbishment of selected restaurants and an improvement of all IT infrastructure across the Group. Financing and net debt The Group had a cash and cash equivalents balance of £9.9m on 1 January 2023 and a net cash position of £7.7m (FY2021 £7.1m) The Group debt consists of a CBIL loan attracting no covenants. This has a six-year term with a maturity date in 2026. The loan had an initial interest-free period of 12 months followed by a rate of interest of 2.5% over the Bank base rate. Impairments A detailed review of each individual restaurant has resulted in an impairment charge of £0.1m in FY22 (FY21: £0.3m). Going concern Upon consideration of this analysis and the principal risks faced by the Group, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future, a period of at least twelve months from the date of this report. Accordingly, the Directors have concluded that it is appropriate to prepare these financial statements on a going concern basis. Michael Toon – Finance Director 09 May 2023 20 Annual Report & Financial Statements 2022 Our take on a classic Mixed Grill. Juicy meats chargrilled to perfection and irresistible when served with garlic and harissa sauce. Michael Toon, Financial Director Annual Report & Financial Statements 2022 21 Perfect combination of soft brioche roll with grilled, spiced kofta. The harissa sauce and pickled onions just make it extra special – there is nothing else like it anywhere. Victoria Gunter, Head of Procurement 22 Annual Report & Financial Statements 2022 Strategic Report For the period ended 1 January 2023 The Directors present their strategic report for the period ended 1 January 2023. Business model The Group’s flagship brand, Comptoir Libanais, specialises in authentic Lebanese cuisine, offered at its vibrant and friendly restaurants. The brand aims to provide a unique all-day dining experience, centred around fresh and healthy food that is both affordable and high-quality. Lebanese cuisine has gained immense popularity in recent times due to its rich and exotic flavours, vegetarian-friendly options, and health benefits, making it a go-to choice for food enthusiasts who love to share their meals with friends and family. At Comptoir Libanais, we take pride in bringing these culinary traditions to life and providing our guests with an unforgettable dining experience that is both satisfying and enjoyable. We seek to design each Comptoir Libanais restaurant with a bold and fresh design that is welcoming to all age groups and types of consumers. Each Comptoir Libanais restaurant has posters and menus showing an artist’s impression of Sirine Jamal al Dine, an iconic Arabian actress, providing a Lebanese café-culture feel. Shawa is a Lebanese grill-serving lean, grilled meats, rotisserie chicken, homemade falafel, halloumi and fresh salad, through a service counter offering, located in high footfall locations, such as shopping centres. The average net spend per head over 2022 at Comptoir Libanais was £17.14 and the average spend at Shawa was lower at £13.74, so our offering is positioned in the affordable or ‘value for money’ segment of the UK casual dining market. In addition, our offering is well-differentiated and faces limited direct competition, in marked contrast to other areas of the market. Strategy for growth Our overarching strategy is to expand our owned-site operations, encompassing both the highly successful Comptoir Libanais and the Shawa QSR brand. While Comptoir Libanais will remain our primary focus, we recognise that Shawa offers us the opportunity to serve our delicious Lebanese cuisine from a smaller footprint, providing us with greater flexibility in our expansion plans. We are also committed to growing our franchised operations, which we see as a complementary and relatively low-risk approach to extending our brand presence both in the UK and in overseas territories. To this end, we have successfully opened two new restaurants with our franchise partner, HMS Host, in Stansted Airport and Doha Airport. Furthermore, Comptoir is actively engaging with partners to explore opportunities to open additional restaurants across various regions. The UK food delivery market is another important channel for us, and we are delighted to report that it has experienced significant growth over the past three years. This has been facilitated by advancements in technology that have made ordering easier and provided quick access to a wide selection of menus through platforms such as Deliveroo and UberEATS. We work closely with all major delivery platforms, enabling us to offer our customers a direct delivery service that has been instrumental in driving growth across this channel. All of these channels are supported by our scalable central production unit located in North London. This provides us with cost advantages and complete quality assurance. Annual Report & Financial Statements 2022 23 Strategic Report For the period ended 1 January 2023 Review of the business and key performance indicators (KPIs) The Board and management team use a range of performance indicators to monitor and measure the performance of the business. However, in common with most businesses, the critical KPI’s are focused on growth in sales and EBITDA and these are appraised against budget, forecast and last year’s achieved levels. In terms of non-financial KPIs, the standard of service provided to guests is monitored via the scores from a programme of regular monthly “mystery diner” visits to our restaurants as well as guest feedback available to all of those who dine with us through use of a QR code all of which are carried out by HGem. These measures have seen significant improvement as the business returned to a normal course of operation. We also use feedback from health and safety audits conducted by an external company (Food Alert) to ensure that critical operating procedures are being adhered to. Principal risks and uncertainties The Board of Directors (“the Board”) has overall responsibility for identifying the most significant risks faced by the business and for developing appropriate policies to ensure that those risks are adequately managed. The following have been identified as the most significant risks faced by the Group, however, it should be noted that this is not an exhaustive list and the Company has policies and procedures to address other risks facing the business. Consumer demand Any weakness in consumer confidence could have an adverse effect on footfall and guest spend in our restaurants. The Covid-19 virus and now the cost of living crisis have had a significant impact on the hospitality sector and the wider UK and global economy. Frequent or regular participation in the eating-out market is afforded by the consumer out of household disposable income. Macroeconomic factors such as employment levels, interest rates and inflation can impact disposable income and consumer confidence can dictate their willingness to spend. As indicated above, the core brands within the Group are positioned in the affordable segment of the casual dining market. A strong focus on superior and attentive service together with value-added marketing initiatives can help to drive sales when guest footfall is more subdued. This, together with the strategic location of each of our restaurants helps to mitigate the risk of consumer demand to the business. Input cost inflation The Group’s key input variables are the cost of food and drink, associated ingredients and the continued progressive increases in the UK National Living Wage and Minimum present a challenge we must face up to alongside our peers and competitors. We aim to maintain an appropriate level of flexibility in our supplier base so we can work to mitigate the impact of input cost inflation. Our teams work hard to identify all cost savings and to capitalise on them. Economic conditions The exit from the European Union, the Covid-19 pandemic and now the war in Ukraine has left a great deal of uncertainty that still may impact consumer spending. The pressure on living standards and possible deterioration in consumer confidence due to future economic conditions could have a detrimental impact on the Group in terms of footfall and sales. This risk is mitigated by the positioning of the Group’s brands, which is within the affordable segment of the casual dining market. Continued focus on customer relations and targeted and adaptable marketing initiatives help the Group retain and drive sales where footfall declines. 24 Annual Report & Financial Statements 2022 There is something very special about our Halloumi, you can’t beat it! Especially when it’s coupled with some of the sweetness of figs. Gemma Hambley, Human Resources Director Annual Report & Financial Statements 2022 25 Energy Consumption and Carbon Emissions The Group is a public company under the Streamlined Energy and Carbon Reporting regulations and must report its greenhouse gas emissions from Scope 1 and 2 Electricity, Gas and Transport annually. The Group has followed the 2019 HM Government environmental reporting guidelines to ensure compliance with the SECR requirements. The UK Government issued ‘Greenhouse gas reporting: conversion factors 2022’ conversion figures for CO2e, along with the fuel property figures to determine the kWh content for reclaimed mileage. The chosen intensity measurement ratio is total gross emissions in Kgs CO2e/Cover. Strategic Report For the period ended 1 January 2023 Labour cost inflation Labour cost pressures that are outside of the control of the Group, such as auto-enrolment pension costs, minimum wage / Living wage increases, Employee and Employer NI increases, and the apprenticeship levy, are endured by the Group and its competitors. Labour costs continue to be regularly monitored and ongoing initiatives are used to reduce the impact of such pressures. Strategy and execution The Group’s central strategy is to open additional new outlets under its core Comptoir Libanais and Shawa brands. Despite making every effort, there is no guarantee that the Group will be able to secure a sufficient number of appropriate restaurants to meet its growth and financial targets and it is possible that new openings may take time to reach the anticipated levels of mature profitability or to match historical financial returns. The Group utilises the services of external property consultants and continues to develop stronger contacts and relationships with potential landlords as well as their agents and advisers. However, there will always be competition for the best restaurants and the Board will continue to approach any potential new restaurant with caution and be highly selective in its evaluation of new restaurants to ensure that target levels of return on investment are achieved. 26 Annual Report & Financial Statements 2022 Energy consumption used to calculate emissions (kWh) Grid Electricity Natural Gas Company Fleet Grey fleet Scope 1 emissions in metric tonnes CO2e Natural gas Company fleet FY 2022 5,473,397 2022 2021 2,734,638 2,617,319 64,804 56,636 529.41 16.61 2,191,709 1,444,967 64,063 0 264.66 16.12 Total Scope 1 consumption (kWh) 2,682,123 1,509,030 Scope 2 emissions in metric tonnes CO2e Grid electricity Total Scope 2 consumption (kWh) Scope 3 emissions in metric tonnes CO2e Grey fleet Total Scope 3 Consumption (kWh) Total Gross emissions in metric tonnes CO2e Total Consumption (kWh) Intensity ratio kg CO2e/ Covers FY 2022 Intensity ratio kg CO2e/Covers FY 2021 528.82 2,734,638 13.97 56,636 1,088.81 5,473,397 506.55 2,191,709 0 0 787.33 3,700,739 FY 2022 0.69 0.75 Annual Report & Financial Statements 2022 27 Strategic Report For the period ended 1 January 2023 Quantification and reporting methodology. Materiality Comptoir Group PLC are reporting upon all the required fuel sources as per SECR requirements. Data gaps for Reading - The Oracle Shopping Centre - Unit 43 (electricity) and South Kensington - 77A Gloucester Road (natural gas) were filled using pro-rata method due to lack of invoices from previous suppliers. Estimations for Vehicle Fleet, costs were provided, and UK government fuel properties used to convert to kWh and tCO2e. Future developments The Group will continue to roll out selectively its Comptoir Libanais and Shawa brands by opening new restaurants across the UK and to explore further opportunities to grow the Comptoir Libanais brand via franchising with suitable partners and expansion of the external catering offering. On behalf of the Board Nick Ayerst – Chief Executive Officer 09 May 2023 Comptoir Group PLC have appointed Amber as their SECR consultants. We have followed 2019 HM Government environmental reporting guidelines to ensure compliance with the SECR requirements. The UK government issued “Greenhouse gas reporting: conversion factors 2022” conversion figures for CO2e were used. Intensity measurement The chosen intensity measurement ratio is Covers. Measures taken to improve energy efficiency. Comptoir Group PLC continue to strive for energy and carbon reduction arising from their activities. During this reporting period Comptoir Group PLC have: Moved to 100% renewable energy suppliers Introduced CAPUT and WATTAGE - systems to help record and monitoring Energy usage on hourly and daily basis. We are also trialling a new monitoring system at our two busiest restaurants – the system saves energy by controlling the speed of the extract and air supply fans in–line with activity levels in the kitchen Adjusted fan speeds so that the energy consumption is only 6% of that with the fans running at full capacity Replaced normal lights to energy saving Lights-LED Encouraged General Managers to pool share for company meetings 28 Annual Report & Financial Statements 2022 Our Whipped Feta Dip is amazing! I just had to get the recipe off our Executive Chef as soon as I tried it! Nicole Goodwin, Marketing Director Annual Report & Financial Statements 2022 29 These mini meaty croquettes known as Lamb Kibbeh are jammed with gorgeous Lebanese flavours, perfect on its own as a snack, or with a delicious dip to dig into! Adil Loudiyi, F&B System Controller 30 Annual Report & Financial Statements 2022 Strategic Report Section 172 Statement Background 172(1)(a) to (f): Section 172 of the Companies Act 2006 (‘Act’) requires the Directors to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, having regard to various factors, including the matters listed below in section. a. The likely consequences of any decisions in the long-term; b. The interests of the Company’s employees; c. The need to foster the Company’s business relationships with suppliers, customers and others; d. The impact of the Company’s operations on the community and environment; e. The desirability of the Company maintaining a reputation for high standards of business conduct and f. The need to act fairly as between members of the Company This statement is aimed at helping shareholders better understand how Directors discharged their duty to promote the success of companies under Section 172 of the Companies Act 2006 (“S172 Matters”). Throughout the year, in performance of its duties, the Board has had regard to the interests of the Groups key stakeholders and has taken account of any potential impact on these stakeholders of the decisions it has made. Details of how the Board had regard to the following S172 matters are as per the below. S172 Matters Example The likely consequences of any decisions in the long-term Communication with shareholders through the Comptoir Investor website, AGM, investor meeting and circulars Through the corporate governance framework described in this annual report The interests of the Company’s employees Ongoing training and development at all levels Engagement through the company engagement application, newsletters, emails and other communications tools The need to foster the Company’s business relationships with suppliers, customers and others Maintenance of regular contact with all suppliers Launch of the Comptoir loyalty scheme through the Comptoir application Responding to feedback from the guest Use of a mystery guest programme to ensure standards are visible and maintained The impact of the Company’s operations on the community and environment Local recruitment of staff Flexible working to reduce travel where applicable Ongoing focus on environmentally friendly processes and procedures The desirability of the Company maintaining a reputation for high standards of business conduct Regular restaurant visits and audit processes Mystery guest programme Food standards programme Compliance updates at Board meetings Ongoing training for all staff The need to act fairly as between members of the Company We maintain an open dialogue with our shareholders Engagement with stakeholders On behalf of the Board Nick Ayerst – Chief Executive Officer 09 May 2023 Annual Report & Financial Statements 2022 31 Corporate Governance Statement of Corporate Governance The Board have elected to adopt the Quoted Companies Alliance (QCA) Corporate Governance Code in line with the changes under Rule 26 of the AIM Rules for Companies requiring all companies that are traded on AIM to adopt and comply with a recognised corporate governance code. Full details of our adoption to the code can be found at https://investors.comptoirlibanais.com/ corporate-governance/. Audit Committee The Audit Committee meets twice a year, including a meeting with the auditors shortly before the signing of the accounts. The terms of reference of the Audit Committee include: any matters relating to the appointment, resignation or dismissal of the external auditors and their fees; discussion with the auditors on the nature, scope and findings of the audit; consideration of issues of accounting policy and presentation; monitoring. The work of the review function carried out to ensure the adequacy of accounting controls and procedures. Nomination Committee The Company does not have a Nomination Committee. Any Board appointments are dealt with by the Board itself. Internal control The Board is responsible for the Group’s system of internal control and for reviewing the effectiveness of the system of internal control. Internal control systems are designed to meet the particular needs of a business and manage the risks but not to eliminate the risk of failure to achieve the business objectives. By its nature, any system of internal control can only provide reasonable, and not absolute, assurance against material misstatement or loss. Internal audit Given the size of the Group, the Board does not believe it is appropriate to have a separate internal audit function. The Group’s systems are designed to provide the Directors with reasonable assurance that problems are identified on a timely basis and are dealt with appropriately. The Board The Board of Comptoir Group PLC is the body responsible for the Group’s objectives, its policies and the stewardship of its resources. At the balance sheet date, the Board comprised five Directors Nick Ayerst, Ahmad (Tony) Kitous and Michael Toon as Executive Directors, Jean Michel Orieux and Beatrice Lafon as Non-Executive Directors. Beatrice Lafon and Jean Michel Orieux are considered by the Board to be independent. Each Director demonstrates a range of experience and sufficient calibre to bring independent judgment on issues of strategy, risk management, performance, resources and standards of conduct which are vital for the success of the Group. The Board had eleven Board meetings during the year. Beatrice Lafon is Chairperson of both the Audit and the Remuneration Committees. The terms of reference of both these committees have been approved by the Board. Remuneration Committee The Remuneration Committee’s responsibilities include the determination of the remuneration and options of Directors and senior executives of the Group and the administration of the Company’s option schemes and arrangements. The Committee takes appropriate advice, where necessary, to fulfil this remit. 32 Annual Report & Financial Statements 2022 Grilled Chicken Taouk & Comptoir Salad with a side of harissa and garlic sauce. A lean, succulent, and full flavoured meal without carbs; excellent choice for lunch or lighter meal without compromising on taste. Conrad Patterson, Chief Operating Officer Annual Report & Financial Statements 2022 33 Corporate Governance Statement of Corporate Governance Relations with shareholders There is a regular dialogue with institutional investors including presentations after the Group’s year-end and half year results announcements. Feedback from major institutional shareholders is provided to the Board on a regular basis and, where appropriate, the Board will take steps to address their concerns and recommendations. Aside from announcements that the Group makes periodically to the market, the Board uses the annual general meeting to communicate with shareholders and welcomes their participation. Going concern In assessing the going concern position of the Group for the consolidated financial statements for the year ended the 1 January 2023, the Directors have considered the Group’s cash flow, liquidity and business activities. The last couple of years have been uncertain following the Covid-19 pandemic, the war in Ukraine and now the cost of living crisis and this has been considered as part of the Group’s adoption of the going concern basis. Although trading was impacted over this period, the Group’s trading remained ahead of expectations. The Group was profitable during this period and had increased its cash reserves to £9.9m as at the start of the current accounting period. The Directors have considered the current business model, strategies and principal risks and uncertainties. Based on the Group’s cash flow forecasts and projections, the Board is satisfied that the Group will be able to operate for the foreseeable future. In making this assessment, the Directors have made a specific analysis of the impact of current inflationary pressures, Covid-19, Brexit and the current war impacting Ukraine. The Group’s current cash reserves remains at £9.9m, and the Board believes that the business has the ability to remain trading for a period of at least 12 months from the date of signing of these financial statements. These financial statements have therefore been prepared on the going concern basis. 34 Annual Report & Financial Statements 2022 My favourite dish is Baba Ghanuj. Charcoal smoked aubergine, tahini and fresh lemon juice. The smokiness of the aubergine and the creaminess of the tahini makes me feel I’m in the sun in the Middle East. David Jones, Executive Chef Annual Report & Financial Statements 2022 35 Corporate Governance Report of the Directors The Directors present their report together with the audited financial statements for the period ended 1 January 2023. Results and dividends The consolidated statement of comprehensive income is set out on page 47 and shows the profit for the year. The Directors do not recommend the payment of a dividend for the year (2021: £nil). Principal activities The Company’s and Group’s principal activity continues to be that of the operating of restaurants with Lebanese offering in the UK casual dining sector. Directors The Directors of the Group, who held office during the year, and their shareholding at the year-end date, were as follows: Directors who held office in the year Executive A Kitous C Hanna (Resigned 2 August 2022) R Kleiner (Resigned 2 August 2022) Number of ordinary shares Percentage shareholding (%) 58,412,503 22,585,833 610,000 47.6% 18.4% 0.5% Substantial shareholders Directors’ remuneration Besides the Directors, the only other substantial shareholder at the year-end date is Tellworth Investments, whom have a 7.5% shareholding (9,192,319 ordinary shares). The remuneration of the Directors for the year ended 1 January 2023 was as follows: Period ended 1 January 2023 Period ended 2 January 2022 A Kitous M Toon B Lafon J-M Orieux N Ayerst Remuneration Pension £ 336,672 122,686 27,083 19,000 50,210 £ 1,321 1,321 220 197 - Total £ 337,993 124,007 27,303 19,197 50,210 C Hanna (Resigned 2 August 2022) 972,947 24,307 997,254 R Kleiner (Resigned 2 August 2022) - - - 1,528,598 27,366 1,555,964 See Note 27. Total £ 169,116 133,576 - - - 169,116 7,500 313,392 36 Annual Report & Financial Statements 2022 Creditor payment policy Financial instruments The Group has a standard code and also agrees specific individual terms with certain suppliers. Payment is normally made in accordance with those terms, subject to the suppliers’ own performance. Employees Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities. The Group takes a positive view toward employee communication and has established systems for ensuring employees are informed of developments and that they are consulted regularly. These include engagement at office town hall meetings in person and online, induction days for new starters and weekly communications to all staff highlighting key messages for that week. The company also utilises a company called Fourth which provides a service that acts as a central hub to provide regular updates as well as engage with employees in a more informal environment and share success stories. The company also operates a bonus and share scheme at varying levels to reward performance. Details of the use of financial instruments and the principal risks faced by the Group are contained in note 25 to the financial statements. Future developments Details of future developments are contained in the Strategic Report on page 31. Auditors All the current Directors have taken all reasonable steps necessary to make themselves aware of any information needed by the Group’s auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware. UHY Hacker Young have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting. On behalf of the Board Nick Ayerst – Chief Executive Officer 09 May 202 Annual Report & Financial Statements 2022 37 Corporate Governance Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Reports and the Group and Parent Company financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare Group and Parent Company financial statements for each financial period. Under that law, and as required by the AIM rules, the Directors have elected to prepare Group financial statements under UK- adopted International Accounting Standards (IASs), and the Parent Company financial statements under United Kingdom Accounting Standards. Under Company Law the Directors must not approve the Group and Parent Company financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group for that period. In preparing the Group and Parent Company financial statements the Directors are required to: Present fairly the financial position, financial performance and cash flows of the Group and Parent Company; Select suitable accounting policies in accordance with IAS 8: ‘Accounting Policies, Changes in Accounting Estimates and Errors’ and then apply them consistently; Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; Make judgments and estimates that are reasonable; Provide additional disclosures when compliance with the specific requirements in UK adopted international accounting standards is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group’s and the Company’s financial position and financial performance; and The Group and Parent Company financial statements have been prepared in accordance with UK adopted international accounting standards or United Kingdom Accounting Standards, subject to any material departures disclosed and explained in the financial statements The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent Company and enable them to ensure that the Group and Parent Company financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 38 Annual Report & Financial Statements 2022 The Mezze Platter showcases what we are all about on one plate! There’s a lot of skill and attention to detail to bring all the flavours together. Nick Ayerst, CEO Annual Report & Financial Statements 2022 39 Corporate Governance Independent Auditors’ Report To the members of Comptoir Group PLC Opinion We have audited the financial statements of Comptoir Group PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the period ended 1 January 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Balance Sheet, the Consolidated Statements of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group’s financial statements is applicable law and UK-adopted International Accounting Standards. The financial reporting framework that has been applied in the preparation of the Parent Company’s financial statements is FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice) and in accordance with the provisions of the Companies Act 2006. In our opinion: The financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 1 January 2023 and of the Group’s profit for the period then ended; The Group financial statements have been properly prepared in accordance with UK-adopted International Accounting Standards and in accordance with the requirements of the Companies Act 2006; and The Parent Company financial statements have been properly prepared in accordance with FRS 102 (United Kingdom Generally Accepted Accounting Practice) and as applied in accordance with the provisions of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. 40 Annual Report & Financial Statements 2022 We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Director’s use of the going concern basis of accounting in the preparation of the financial statement is appropriate. Our evaluation of the Director’s assessment of the entity’s ability to continue to adopt the going concern basis of accounting included: Evaluation of management assessment Assessing the transparency and the completeness and accuracy of the matters covered in the going concern disclosure by evaluating management’s cashflow projections for the next 12 months and the underlying assumptions We obtained budgets and cashflow forecasts, reviewed the methodology behind these, ensured arithmetically correct and challenged the assumptions We obtained post period end trading results and compared these to budget to ensure budgeting is reasonable and results are in line with expectations Evaluated the key assumptions in the forecast, which were consistent with our knowledge of the business and considered whether these were supported by the evidence we obtained Discussed plans for the Group going forward with management, ensuring these had been incorporated into the budgeting and would not have an impact on the going concern status of the Group Compared the prior period forecast against current period actual performance to assess management’s ability to forecast accurately We have assessed the sensitivity of the forecasts to a decrease in budgeted profit for the forecast period and the resulting impact on the cash position We also reviewed the disclosures relating to going concern basis of preparation and found that these provided an explanation of the Directors’ assessment that was consistent with the evidence we obtained Key observations The Group generated a profit of £0.59m in the 52 weeks to 1 January 2023 (profit for the 52 week period to 2 January 2022 of £1.64m). They generated net cash from operating activities of £4.27m in the 52 weeks to 1 January 2023 (£4.69m in the 52 weeks to 2 January 2022) and had a cash and cash equivalents of £9.93m as at 1 January 2023 (£9.87m as at 2 January 2022). Clear and full disclosure of the facts and the Directors’ rationale for the use of the going concern basis of preparation, is a key financial statement disclosure and so was the focus of our audit in this area. Auditing standards require that to be reported as a key audit matter. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. Our approach to the audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account an understanding of the structure of the Parent Company and the Group, their activities, the accounting processes and controls, and the industry in which they operate. Our planned audit testing was directed accordingly and was focused on areas where we assessed there to be the highest risk of material misstatement. Our Group audit scope includes all of the Group companies. At the Group level, we also tested the consolidation procedures. The audit team met and communicated regularly throughout the audit with the CFO in order to ensure we had a good knowledge of the business of the Group. During the audit we reassessed and re-evaluated audit risks and tailored our approach accordingly. The audit testing included substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls and the management of specific risk. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant findings, including any significant deficiencies in internal control that we identify during the audit. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Group and Parent Company financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified during our audit. Going concern is a significant key audit matter and is described above. In arriving at our audit opinion above, the other key audit matters were as follows: Annual Report & Financial Statements 2022 41 Corporate Governance Independent Auditors’ Report Key audit matters (applicable to the Group) Revenue recognition The Group recognises revenue for services and goods How our audit addressed the key audit matters Our audit work included, but was not restricted to: provided in the Group’s restaurants (excluding value Performing transaction testing from the nominal added tax and gratuities left by guests for the benefit ledger to the source documents on a sample of of employees) and is recognised at the point of sale. sales transactions to test the occurrence and at It should be ensured that any gratuities left by the same time test the accuracy of the correct guests, which are due to the staff, are not recognised treatment of the service charges and the as revenue. Tronc system Service charges/tips are distributed between those Assessment of sales recorded around the who are eligible via the Tronc system and through financial period end to determine if recorded wages. Those eligible for service charges include in the correct accounting period to gain assurance all employees who have any contact with a guest on the cut off assertion or any form of influence over revenue growth. Therefore some head office staff also receive a share of service charges. Revenue is a key driver of the business and is made up of a high number of individual low value transactions therefore in respect of services provided there is a risk that revenue is recorded inappropriately relative to the provision of underlying services. We therefore identified the risk over the occurrence assertion relating to revenue recognition as a significant risk, which was one of the most significant risks of material misstatement. Documenting our understanding of the systems and controls around the recording of revenue and testing the design effectiveness of such controls We carried out detailed substantive analytical procedures on sales We have assessed whether revenue was accounted for in accordance with that stated accounting policy on revenue The Group’s accounting policy on revenue recognition is shown in Significant Accounting Policies for the consolidated financial statements and related disclosures are included in note 2. Key observations We have not found any issues or errors involving sales and are therefore satisfied we have assurance over sales recognition and treatment. Impairment of property, plant and equipment and right-of-use assets Property, plant and equipment and right-of-use assets are significant assets on the Group’s balance sheet with a combined net book value of £20.4m at 1 January 2023 (2 January 2022: £23.2m). We assessed Management’s process for identifying restaurants with a potential impairment and the impairment review process and performed analysis to challenge their assumptions on impairments and considered the level of impairments made in the period. 42 Annual Report & Financial Statements 2022 The balance is primarily comprised of leasehold We assessed Management’s process for identifying buildings and fixtures, fittings and equipment to restaurants with a potential impairment and the support the Group’s restaurants. The assets are at risk impairment review process and performed analysis of potential impairment due to the Group operating to challenge their assumptions on impairments in a competitive industry. The estimated recoverable and considered the level of impairments made amount of these balances is subjective due to the in the period. inherent uncertainty involved in forecasting and discounting the related future cash flows. At each reporting date Management has undertaken an assessment of the carrying value of these assets and, where there are indicators of impairment in accordance with IAS 36 ‘Impairment of assets’, has carried out an impairment review by reference to external market factors and discounted cash flows in relation to cash generating units that include these assets. The assessment was based on the future cash flows of each restaurant using a discounted cash flow model (being the ‘value in use’). The higher of these amounts, being the recoverable amount, was then compared to the carrying value of fixed assets for that restaurant. Significant management judgement and estimation uncertainty is involved in this area, where the primary inputs are: Estimating cash flow forecasts; and Selecting an appropriate discount rate Our audit work included, but was not restricted to, the following: Evaluating Management’s assessment of forecasted cash flows site-by site and challenging Management on significant movements in forecasted cash flows on a restaurant by restaurant basis compared to historic performance Testing the accuracy of management’s 2022 forecasts against the actual results Assessing Management’s forecasted cash flows that feed into the discounted cash flow model and challenging assumptions around this with reference to historic results, market trends and future expectations and tested mathematical accuracy Challenging the appropriateness of Management’s assumptions including the growth and discount rates Assessing the sensitivity of the value in use for each restaurant by sensitising the key This area has been recognised by the Board as assumptions in the impairment calculation a critical accounting judgement and estimate, refer to the end of note 1 - Critical accounting judgements and key sources of estimation uncertainty and note 10 – Property, Plant and Equipment. There is also a risk that Management may unduly influence the significant judgements and estimates in respect of the requirement for an impairment provision. Given the value of the tangible fixed assets and the performance of some restaurants over the period, we consider this to be a significant risk, which was one of the most significant risks of material misstatement. We held discussions with Management to challenge the impairments on those restaurants where: the headroom before impairment was low and the forecast growth in cash flows was high Assessing the adequacy of disclosures in the financial statements against the requirement of IAS 36 ‘Impairment of assets’ The Group’s accounting policy on the impairment of Property, plant and equipment and right-of-use assets is shown in Principal Accounting Policies for the consolidated financial statements and related disclosures are included in note 10. Annual Report & Financial Statements 2022 43 Corporate Governance Independent Auditors’ Report Key observations As a result of our testing, we concluded that the valuation of the tangible fixed assets is accounted for in accordance with the Group’s accounting policies and IAS 36 ‘Impairment of assets’. Our application of materiality The scope and focus of our audit was influenced by our assessment and application of materiality. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the financial statements. We define financial statement materiality as the magnitude by which misstatements, including omissions, could reasonably be expected to influence the economic decisions taken on the basis of the financial statements by reasonable users. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Group Parent Overall materiality We determined materiality for the financial statements as a whole to be £465,000 (2022: £310,000). We have determined Parent Company materiality to be £178,000 (2022: £195,000). How we determine it Based on a benchmark of 1.5% of revenue for the period. Based on a benchmark of 4% of gross assets. Rationale for benchmark applied Due to the volatility of profits/losses before tax, total revenues for the period has been determined to be the most appropriate benchmark. As the company is a holding company materiality was based on gross assets, in line with the previous year’s calculation. Performance materiality On the basis of our risk assessment, together with our assessment of the Group’s control environment, our judgement is that performance materiality for the financial statements should be 70% of materiality and was set at £325,000 (2022: £232,500). Performance materiality for the Parent Company was set at 75% of financial statement materiality, for the same reasons as for the Group, being £133,000 (2022: 146,000). Specific materiality A lower materiality has been used for the cash element of Directors’ remuneration, being £2,000. A lower materiality has been used for the cash element of Directors’ remuneration, being £2,000. 44 Annual Report & Financial Statements 2022 Matters on which we are required to report by exception In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: Adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or The Parent Company financial statements are not in agreement with the accounting records and returns; or Certain disclosures of directors’ remuneration specified by law are not made; or We have not received all the information and explanations we require for our audit Responsibilities of Directors As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do so. Reporting threshold We agreed with the Audit Committee that we would report to them all misstatements over £23,000 (5% of Group materiality) identified during the audit, as well as differences below that threshold that, in our view, warrant reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. Other information The other information comprises the information included in the annual report other than the financial statements and our auditors’ report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: The information given in the Strategic Report and the Directors’ report for the financial period for which the financial statements are prepared is consistent with the financial statements; and The Strategic Report and the Directors’ report have been prepared in accordance with applicable legal requirements Annual Report & Financial Statements 2022 45 Corporate Governance Independent Auditors’ Report Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Based on our understanding of the Group and Parent Company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to UK Tax Legislation, pension legislation, employment and health and safety regulations and anti-bribery, corruption and fraud and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and the Quoted Companies Alliance. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related management bias in accounting estimates and inappropriate journal entries to revenue. Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of legal fees in the period and enquiries of management in so far as they related to the financial statements, and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud. 46 Annual Report & Financial Statements 2022 There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the Parent Company’s members, as a body, in accordance with part 3 of Chapter 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. James Astley – (Senior Statutory Auditor) For and on behalf of UHY Hacker Young Chartered Accountants and Statutory Auditor UHY Hacker Young LLP 4 Thomas More Square London E1W 1YW 09 May 2023 Financial Statements Consolidated financial statements & notes Consolidated Statement of Comprehensive Income For the period ended 1 January 2023 Revenue Cost of sales Gross profit Distribution expenses Administrative expenses Other income Operating profit Finance costs Profit before tax Taxation (charge)/credit Profit for the period Other comprehensive income Total comprehensive income for the period Basic earnings per share (pence) Diluted earnings per share (pence) Notes Period ended 1 January 2023 Period ended 2 January 2022 2 2 3 6 7 8 8 £ 31,046,546 (6,605,074) 24,441,472 (11,431,633) £ 20,711,257 (3,773,721) 16,937,536 (9,318,203) (11,357,436) (9,362,286) 292,744 1,945,147 (1,042,697) 902,450 (314,146) 588,304 - 588,304 0.48 0.48 4,090,214 2,347,261 (822,094) 1,525,167 118,288 1,643,455 - 1,643,455 1.34 1.34 All of the above results are derived from continuing operations. Profit for the period and total comprehensive income for the period is entirely attributable to the equity shareholders of the Group. Annual Report & Financial Statements 2022 47 Financial Statements Consolidated financial statements & notes Consolidated balance sheet At 1 January 2023 Assets Non-current assets Intangible assets Property, plant and equipment Right-of-use assets Deferred tax asset Current assets Inventories Trade and other receivables Cash and cash equivalents Total assets Liabilities Current liabilities Borrowings Trade and other payables Lease liabilities Current tax liabilities Non-current liabilities Borrowings Provisions for liabilities Lease liabilities Deferred tax liabilities Total liabilities Net assets Equity Share capital Share premium Other reserves Retained losses Total equity Notes 9 10 10 17 12 13 15 14 26 15 16 26 17 18 19 1 January 2023 £ 29,134 6,708,383 13,704,427 - 20,441,944 474,655 1,220,053 9,930,323 11,625,031 32,066,975 (600,000) (6,399,675) (2,351,410) - (9,351,085) (1,600,000) (362,088) (15,728,066) (271,967) (17,962,121) (27,313,206) 4,753,769 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769 2 January 2022 £ 55,267 7,232,869 15,960,380 106,659 23,355,175 465,890 698,994 9,867,799 11,032,683 34,387,858 (600,000) (6,131,539) (2,387,104) (64,480) (9,183,123) (2,200,000) (859,414) (17,995,233) - (21,054,647) (30,237,770) 4,150,088 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088 The financial statements of Comptoir Group PLC (company registration number 07741283) were approved by the Board of Directors and authorised for issue on 09 May 2023 and were signed on its behalf by: Nick Ayerst – Chief Executive Officer 48 Annual Report & Financial Statements 2022 Consolidated statement of changes in equity For the period ended 1 January 2023 Notes Share capital Share premium Other reserves Retained losses Total equity £ £ £ £ £ At 1 January 2021 1,226,667 10,050,313 97,286 (8,900,069) 2,474,197 Total comprehensive loss Profit for the period Transactions with owners Share-based payments 21 - - - - - 1,643,455 1,643,455 32,436 - 32,436 At 2 January 2022 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088 At 3 January 2022 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088 Total comprehensive income Profit for the period Transactions with owners Share-based payments 21 - - - - - 588,304 588,304 15,377 - 15,377 At 1 January 2023 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769 Annual Report & Financial Statements 2022 49 Financial Statements Consolidated financial statements & notes Consolidated statement of cash flows For the period ended 1 January 2023 Operating activities Cash inflow from operations Interest paid Tax paid Net cash from operating activities Investing activities Purchase of property, plant & equipment Net cash used in investing activities Financing activities Payment of lease liabilities Bank loan repayments Notes Period ended 1 January 2023 Period ended 2 January 2022 £ £ 22 10 26 23 4,368,949 (94,078) - 4,675,786 (21,057) 30,292 4,274,871 4,685,021 (581,250) (581,250) (436,272) (436,272) (3,031,097) (600,000) (2,014,626) (200,000) Net cash used in financing activities (3,631,097) (2,214,626) Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 62,524 9,867,799 9,930,323 2,034,123 7,833,676 9,867,799 50 Annual Report & Financial Statements 2022 Principal accounting policies for the consolidated financial statements For the period ended 1 January 2023 Reporting entity Use of non-GAAP profit and loss measures Comptoir Group PLC (the “Company”) is a company incorporated and registered in England and Wales, with a company registration number of 07741283. The address of the Company’s registered office is Unit 2, Plantain Place, Crosby Row, London Bridge, SE1 1YN. The consolidated financial statements comprise of the Company and its subsidiaries (together referred to as the “Group”). Statement of compliance The consolidated financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards and its interpretations adopted by the International Accounting Standards Board (IASB). The Parent Company financial statements have been prepared using United Kingdom Accounting Standards including FRS 102 ‘The financial reporting standard applicable in the UK and Republic of Ireland’ and are set out on pages 84 to 90. Basis of preparation These consolidated financial statements for the period ended 1 January 2023 are prepared in accordance with UK-adopted International Accounting Standards. The accounting period for the Group runs to the closest Sunday to 31 December each year. The consolidated financial statements for the current period has been prepared to 1 January 2023 and the comparative period to 2 January 2022. The financial statements are presented in Pound Sterling (£), which is both the functional and presentational currency of the Group and Company. All amounts are rounded to the nearest pound, except where otherwise indicated. The Group and Parent Company financial statements have been prepared on the historical cost convention as modified for certain financial instruments, which are stated at fair value. Non-current assets are stated at the lower of carrying amount and fair value less costs to sell. The Group believes that along with operating profit, the ‘Adjusted EBITDA’ provides additional guidance to the statutory measures of the performance of the business during the financial year. Adjusted profit from operations is calculated by adding back depreciation, amortisation, impairment of assets, finance costs, preopening costs and certain non-recurring or non-cash items. Adjusted EBITDA is an internal measure used by management as they believe it better reflects the underlying performance of the Group beyond generally accepted accounting principles. Going concern basis In assessing the going concern position of the Group for the consolidated financial statements for the year ended the 1 January 2023, the Directors have considered the Group’s cash flow, liquidity and business activities. The last couple of years have been uncertain following the Covid-19 pandemic, the war in Ukraine and now the cost of living crisis and this has been considered as part of the Group’s adoption of the going concern basis. Although trading was impacted over this period, the Group’s trading remained ahead of expectations. The Group was profitable during this period and had increased its cash reserves to £9.9m as at the start of the current accounting period. The Directors have considered the current business model, strategies and principal risks and uncertainties. Based on the Group’s cash flow forecasts and projections, the Board is satisfied that the Group will be able to operate for the foreseeable future. In making this assessment, the Directors have made a specific analysis of the impact of current inflationary pressures, Covid-19, Brexit and the current war impacting Ukraine. The Group’s current cash reserves remains at £9.9m, and the Board believes that the business has the ability to remain trading for a period of at least 12 months from the date of signing of these financial statements. These financial statements have therefore been prepared on the going concern basis. Annual Report & Financial Statements 2022 51 Financial Statements Consolidated financial statements & notes Changes in accounting standards, amendments and interpretations At the date of authorisation of the consolidated financial statements, the following amendments to Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after 1 January 2022. These have not had any material impact on the amounts reported for the current and prior periods. Standard or Interpretation Effective Date Annual improvements to IFRS Standards 2018-2020 1 January 2022 IAS 37 – Onerous Contracts IAS 16 – Property, Plant and Equipment 1 January 2022 1 January 2022 IFRS 3 – Reference to the Conceptual Framework 1 January 2022 New and revised Standards and Interpretations in issue but not yet effective At the date of authorisation of these financial statements, the Group has not early adopted any of the following amendments to Standards and Interpretations that have been issued but are not yet effective: Standard or Interpretation IFRS 17 – Insurance Contracts IAS 8 – Definition of Accounting Estimates IAS 1 – Disclosure of Accounting Policies Effective Date 1 January 2023 1 January 2023 1 January 2023 IAS 12 – Deferred Tax Arising from a Single Transaction 1 January 2023 As yet, none of these have been endorsed for use in the UK and will not be adopted until such time as endorsement is confirmed. The Directors do not expect any material impact as a result of adopting standards and amendments listed above in the financial year they become effective. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in the historical consolidated financial statements, unless otherwise indicated. (a) Basis of consolidation These financial statements consolidate the financial statements of the Company and all of its subsidiary undertakings drawn up to 1 January 2023. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account, regardless of management’s intention to exercise that option or warrant. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date the control ceases. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the identifiable net assets acquired is recorded as goodwill. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are eliminated fully on consolidation. The gain or loss on disposal of a subsidiary company is the difference between net disposals proceeds and the Group’s share of its net assets together with any goodwill and exchange differences. (b) Foreign currency translation Functional and presentational currency Items included in the financial results of each of the Group entities are measured using the currency of the primary economic environment in which the entities operate (the functional currency). The consolidated financial statements are presented in Pounds Sterling (“£”) which is the Company’s functional and operational currency. 52 Annual Report & Financial Statements 2022 Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and financial liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. (c) Financial instruments Financial assets and financial liabilities are measured initially at fair value plus transactions costs. Financial assets and financial liabilities are measured subsequently as described below. Financial assets The Group classifies its financial assets as ‘loans and receivables’. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the statement of financial position date, which are classified as non-current assets. Receivables are classified as ‘trade and other receivables’ and loans are classified as ‘borrowings’ in the statement of financial position. Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The carrying value of trade and other receivables recorded at amortised cost are reduced by allowances for lifetime estimated credit losses. Estimated future credit losses are first recorded on the initial recognition of a receivable and are based on the ageing of the receivable balance, historical experience and forward looking considerations. Balances that are deemed not collectable will be recognised as a loss in the income statement. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited to the Statement of Comprehensive Income. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. Financial liabilities The Group’s financial liabilities include trade and other payables. Trade payables are recognised initially at fair value less transaction costs and subsequently measured at amortised cost using the effective interest method (“EIR” method). Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Comprehensive Income. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. (d) Property, plant and equipment Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation Depreciation is charged to the income statement on a reducing balance basis and on a straight-line basis over the estimated useful lives of corresponding items of property, plant and equipment: Land & buildings leasehold Over the length of the lease Plant & machinery 15% on reducing balance Fixture, fittings & equipment 10% on reducing balance The carrying values of plant and equipment are reviewed at each reporting date to determine whether there are any indications of impairment. If any such indication exists, the assets are tested for impairment to estimate the assets’ recoverable amounts. Any impairment losses are recognised in the Statement of Comprehensive Income. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. Annual Report & Financial Statements 2022 53 Financial Statements Consolidated financial statements & notes Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the Statement of Comprehensive Income. (e) Intangible assets – goodwill All business combinations are accounted for by applying the acquisition method. Goodwill represents amounts arising on acquisition of subsidiaries, associates and joint ventures. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is formally tested for impairment annually, thus is not amortised. Any excess of fair value of net assets over consideration on acquisition are recognised directly in the income statement. (f) Inventories Inventories are stated at the lower of costs and net realisable value. Cost comprises direct materials, and those direct overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. (g) Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash at bank, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts that are repayable on demand are included within borrowings in current liabilities on the balance sheet. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. (h) Share-based payments The Group’s share option programme allows Group employees to acquire shares of the Company and all options are equity-settled. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest. (i) Provisions for liabilities A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in the income statement in the period it arises. (j) Deferred tax and current tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered or paid to the taxation authorities. A provision is made for corporation tax for the reporting period using the tax rates that have been substantially enacted for the company at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Comprehensive Income. 54 Annual Report & Financial Statements 2022 Deferred income tax is provided in full on a non-discounted basis, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. (k) Leases Right-of-use assets Right-of-use assets are recognised at the commencement date of the lease (i.e., the date the underlying asset is available for use). Initially, right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Subsequently, right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Lease liabilities At the commencement date of the lease, the lease liabilities recognised are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group used the incremental borrowing rate at the lease commencement. After the commencement date, the amount of lease liabilities is increased to account for interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. The Group elected to apply the practical expedient in relation to amendments to IFRS 16: Covid-19 Related Rent Concessions. This allows a lessee to account for any changes to their lease payments due to the effects of Covid-19 in the Statement of Comprehensive Income rather than be treated as a lease modification. The practical expedient was applied consistently to all lease contracts with similar characteristics and in similar circumstances. A resulting credit will be recognised as income in the profit and loss for the reporting period reflecting the changes in lease payments arising from the application of this practical expedient. (l) Employee benefits Short term employee benefits Wages, salaries, paid annual leave, paid sick leave and bonuses are recognised as an expense in the period in which the associated services are rendered by employees. The Group recognises an accrual for annual holiday pay accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within 12 months. The accrual is measured at the salary cost payable for the period of absence. Pensions and other post-employment benefits The Group pays monthly contributions to defined contribution pension plans. The legal or constructive obligation of the Group is limited to the amount that they agree to contribute to the plan. The contributions to the plan are charged to the Statement of Comprehensive Income in the period to which they relate. Annual Report & Financial Statements 2022 55 Financial Statements Consolidated financial statements & notes Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits. (m) Revenue Revenue represents amounts received and receivable for services and goods provided (excluding value added tax) and is recognised at the point of sale. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Franchise fees from the Group’s role as franchisor in the UK, Europe and the Middle East. Revenue comprises ongoing royalties based on the sales results of the franchisee and up-front initial site fees. (n) Expenses Variable lease payments Variable lease payments that do not depend on an index or rate and are not in-substance fixed payments, such as rental expenses payable based on the percentage of sales made in the period, are not included in the initial measurement of the lease liability. These payments are recognised in the income statement in the period in which the event or condition that triggers those payments occurs. Opening expenses Property rentals and related costs incurred up to the date of opening of a new restaurant are written off to the income statement in the period in which they are incurred. Promotional and training costs are written off to the income statement in the period in which they are incurred. Financial expenses Financial expenses comprise of interest payable on bank loans, hire purchase liabilities and other financial costs and charges. Interest payable is recognised on an accrual basis. (o) Ordinary share capital Ordinary shares are classified as equity. Costs directly attributable to the increase of new shares or options are shown in equity as a deduction from the proceeds. 56 Annual Report & Financial Statements 2022 (p) Dividend policy In accordance with IAS 10 ‘Events after the Balance Sheet Date’, dividends declared after the balance sheet date are not recognised as a liability at that balance sheet date and are recognised in the financial statements when they have received approval by shareholders. Unpaid dividends that are not approved are disclosed in the notes to the consolidated financial statements. (q) Commercial discount policy Commercial discounts represent a reduction in cost of goods and services in accordance with negotiated supplier contracts, the majority of which are based on purchase volumes. Commercial discounts are recognised in the period in which they are earned and to the extent that any variable targets have been achieved in that financial period. Costs associated with commercial discounts are recognised in the period in which they are incurred. (r) Operating segments An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenue and expenses related to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the Board of Executive Directors, at which level strategic decisions are made. (s) Government grants Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. Critical accounting judgements and key sources of estimation uncertainty The preparation of financial statements in conformity with UK-adopted IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. The resulting accounting estimates may differ from the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. In the process of applying the Group’s accounting policies, management has made a number of judgments and estimations of which the following are the most significant. The estimates and assumptions that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the future financial years are as follows: Depreciation, useful lives and residual values of property, plant & equipment The Directors estimate the useful lives and residual values of property, plant & equipment in order to calculate the depreciation charges. Changes in these estimates could result in changes being required to the annual depreciation charges in the Statement of Comprehensive Incomes and the carrying values of the property, plant & equipment in the balance sheet. Impairment of assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset. Leases At the commencement date of property leases the lease liability is calculated by discounting the lease payments. The discount rate used should be the interest rate implicit in the lease. However, if that rate cannot be readily determined, which is generally the case for property leases, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The discount rate originally applied to the Group’s leases under the portfolio approach was 2.6%. Where there have been modifications to leases since the first application of IFRS 16 the discount rate has been updated in line with the incremental cost of borrowing and ranges between 4% to 6.75%. Deferred tax assets Historically, deferred tax assets had been recognised in respect of the total unutilised tax losses within the Group. A condition of recognising this amount depended on the extent that it was probable that future taxable profits will be available. Share based payments The charge for share-based payments is calculated according to the methodology described in note 21. The Black-Scholes model requires subjective assumptions to be made including the volatility of the Company’s share price, fair value of the shares and the risk-free interest rates. Dilapidations Provisions for leasehold property dilapidation repairs are recognised when the Group has a present obligation to carry out dilapidation work on the leasehold premises before the property is vacated. The amount recognised as a provision is the best estimate of the costs required to carry out the dilapidations work and is spread over the expected period of the tenancy. Annual Report & Financial Statements 2022 57 Financial Statements Consolidated financial statements & notes Notes to the consolidated financial statements For the period ended 1 January 2023 1. Segmental analysis The Group has only one operating segment being: the operation of restaurants with Lebanese Offerings and one geographical segment being the United Kingdom. The Group’s brands meet the aggregation criteria set out in paragraph 22 of IFRS 8 ‘Operating Segments’ and as such the Group reports the business as one reportable segment. None of the Group’s guests individually contribute over 10% of the total revenues. 2. Revenue Income for the year consists of the following: Revenue from continuing operations 31,046,546 20,711,257 Other income not included within revenue in the income statement: 1 January 2023 £ 2 January 2022 £ Insurance claims receivable Local council support grants Covid-19 related rent concessions Coronavirus Job Retention Scheme income Other income Total income for the year - 120,888 171,856 - - 292,744 31,339,290 261,657 894,686 1,284,744 1,644,856 4,271 4,090,214 24,801,471 58 Annual Report & Financial Statements 2022 3. Group operating profit This is stated after charging/(crediting): Variable lease charges* (see note 26) Rent concessions (see note 26) Lease modifications (see note 26) Share-based payments expense (see note 21) Restaurant opening costs 1 January 2023 £ 444,327 (171,856) - 15,377 - 2 January 2022 £ 613,531 (1,284,744) (444,359) 32,436 10,489 Depreciation of property, plant and equipment (see note 10) 3,252,841 3,659,196 Impairment of assets (see note 9 & 10) Loss on disposal of fixed assets Auditors’ remuneration (see note 4) Exceptional legal and professional fees** 78,266 8,188 75,000 1,002,054 336,356 38,098 44,500 - *Variable lease charges relate to additional rental expenses payable based on selected restaurants achieving a certain level of turnover for the year. **Exceptional legal and professional fees related to payments and associated fees in respect of C Hanna’s resignation as Chief Executive Officer of the Group during the period. For the initial trading period following the opening of a new restaurant, the performance of that restaurant will be lower than that achieved by other, similar mature restaurants. The difference in this performance, which is calculated by reference to gross profit margins amongst other key metrics is quantified and included within opening costs. The breakdown of opening costs, between pre-opening costs and certain post-opening costs for 3 months is shown below: Pre-opening costs 1 January 2023 £ - - 2 January 2022 £ 10,489 10,489 Annual Report & Financial Statements 2022 59 Financial Statements Consolidated financial statements & notes 4. Auditors’ remuneration Auditors’ remuneration: Fees payable to Company’s auditor for the audit of its annual accounts 20,500 19,500 1 January 2023 £ 2 January 2022 £ Other fees to the Company’s auditors The audit of the Company’s subsidiaries Total audit fees Review of the half-year accounts Total non-audit fees 49,500 70,000 5,000 5,000 20,000 39,500 5,000 5,000 Total auditors’ remuneration 75,000 44,500 60 Annual Report & Financial Statements 2022 5. Staff costs and numbers (a) Staff costs (including Directors): Wages and salaries: Kitchen, floor and management wages Apprentice Levy Other costs: Social security costs Share-based payments (note 21) Pension costs Total staff costs 1 January 2023 £ 2 January 2022 £ 10,140,060 39,202 6,300,540 26,788 844,542 15,377 159,281 624,327 32,436 140,908 11,198,462 7,124,999 (b) Staff numbers (including Directors): Number Number Kitchen and floor staff Management staff Total number of staff (c) Directors’ remuneration: Emoluments Money purchase (and other) pension contributions Non-Executive Directors’ fees Total Directors’ costs* *Includes redundancy pay. 461 136 597 1,528,598 27,366 - 371 104 475 437,858 33,950 7,500 1,555,964 479,307 Directors’ remuneration disclosed above include the following amounts paid to the highest paid Director still in office at the end of the period: Emoluments Money purchase (and other) pension contributions 336,672 1,321 158,203 10,913 Further details on Directors’ emoluments and the executive pension schemes are given in the Directors’ report. Annual Report & Financial Statements 2022 61 Financial Statements Consolidated financial statements & notes 6. Finance costs Interest payable and similar charges: Interest on bank loans and overdraft Interest on lease liabilities Total finance costs for the year 7. Taxation 1 January 2023 £ 94,078 948,619 1,042,697 2 January 2022 £ 21,057 801,037 822,094 The major components of income tax for the periods ended 1 January 2023 and 2 January 2022 are: (a) Analysis of charge in the year: Current tax: UK corporation tax on the profit/(loss) for the year 1 January 2023 2 January 2022 £ - £ - Adjustments in respect of previous years (64,480) (11,629) Deferred tax: Origination and reversal of temporary differences Tax losses carried forward Total tax charge/(credit) for the period 7,235 371,391 314,146 220,343 (327,002) (118,288) 62 Annual Report & Financial Statements 2022 7. Taxation (continued) (b) Factors affecting the tax charge for the year: The tax charged for the year varies from the standard rate of corporation tax in the UK due to the following factors: Profit/(loss) before tax 1 January 2023 £ 902,450 2 January 2022 £ 1,525,167 Expected tax charge based on the standard rate of corporation tax in the UK of 19% (2022: 19%) 171,466 289,782 Effects of: Depreciation on non-qualifying assets Expenses not deductible for tax purposes Adjustments in respect of previous tax years Tax losses utilised/(carried forward) Losses previously not recognised Effect of change in corporation tax rate Movements in respect of deferred tax Total tax charge/(credit) for the period 7,638 (19,573) (64,480) (159,531) - - 378,626 314,146 223,735 12,709 (11,629) (388,489) (218,798) (25,598) - (118,288) The Group had a brought forward tax losses of £1,793,961 at 2 January 2022, of which £839,637 was utilised in the period ended 1 January 2023. In March 2021 a change to the future corporation tax rate was substantively enacted to increase from 19% to 25% from 1 April 2023. Accordingly, the rate used to calculate the deferred tax balances at 1 January 2023 is 25% (2 January 2022: 25%) as the timing of the release of this asset is materially expected to be after this date. Annual Report & Financial Statements 2022 63 Financial Statements Consolidated financial statements & notes 8. Earnings per share The basic and diluted loss per share figures are set out below: Profit attributable to shareholders Weighted average number of shares For basic earnings per share Adjustment for options outstanding For diluted earnings per share Loss per share: Basic (pence) From profit for the year Diluted (pence) From profit for the year 1 January 2023 £ 588,304 2 January 2022 £ 1,643,455 122,666,667 122,666,667 - - 122,666,667 122,666,667 Pence per share Pence per share 0.48 0.48 1.34 1.34 Further details of the share options that could potentially dilute basic earnings per share in the future are provided in note 21. Diluted earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of shares and ‘in the money’ share options in issue. Share options are classified as ‘in the money’ if their exercise price is lower than the average share price for the period. As required by IAS 33 ‘Earnings Per Share’, this calculation assumes that the proceeds receivable from the exercise of ‘in the money’ options would be used to purchase share options in the open market in order to reduce the number of new shares that would need to be issued. As the shares were not ‘in the money’ as at 1 January 2023 and consequently would be antidilutive, no adjustment was made in respect of the share options outstanding to determine the diluted number of options. 64 Annual Report & Financial Statements 2022 9. Intangible assets Group Cost At 1 January 2021 Additions At 2 January 2022 Accumulated amortisation and impairment At 1 January 2021 Impairments At 2 January 2022 Net Book Value as at 31 December 2020 Net Book Value as at 2 January 2022 Cost At 1 January 2021 Additions At 2 January 2022 Accumulated amortisation and impairment At 1 January 2021 Impairments At 2 January 2022 Net Book Value as at 2 January 2022 Net Book Value as at 1 January 2023 Goodwill £ 89,961 - 89,961 (34,694) - (34,694) 55,267 55,267 Goodwill £ 89,961 - 89,961 (34,694) (26,133) (60,827) 55,267 29,134 Total £ 89,961 - 89,961 (34,694) - (34,694) 55,267 55,267 Total £ 89,961 - 89,961 (34,694) (26,133) (60,827) 55,267 29,134 Goodwill arising on business combinations is not amortised but is subject to an impairment test annually which compares the goodwill’s ‘value in use’ to its carrying value. During the year, an impairment of £26,133 (2022: £nil) was considered necessary in respect of goodwill. Annual Report & Financial Statements 2022 65 Financial Statements Consolidated financial statements & notes 10. Property, plant and equipment Group Cost Right-of use assets Leasehold land & buildings Plant & machinery Fixture, fittings, & equipment Motor vehicles £ £ £ £ £ Total £ At 1 January 2021 27,924,649 11,016,023 4,800,774 2,858,547 53,430 46,653,423 Additions Disposals Modifications At 2 January 2022 961,807 26,764 243,860 165,649 - 1,398,080 - (623,777) (342,067) (180,230) (15,120) (1,161,194) (241,519) - - - - (241,519) 28,644,937 10,419,010 4,702,567 2,843,966 38,310 46,648,790 Accumulated depreciation and impairment At 1 January 2021 (10,327,905) (5,878,170) (2,926,080) (1,441,993) (8,935) (20,583,083) Depreciation during the period (2,286,551) (770,599) (342,355) (254,073) (5,618) (3,659,196) Disposals during the period - 620,673 320,586 172,390 9,445 1,123,094 Impairment during the period (70,101) (179,932) (61,047) (25,276) - (336,356) At 2 January 2022 (12,684,557) (6,208,028) (3,008,896) (1,548,952) (5,108) (23,455,541) Cost At 3 January 2022 28,644,937 10,419,010 4,702,567 2,843,966 38,310 46,648,790 Additions Disposals Modifications At 1 January 2023 - - 15,741 417,524 147,985 (63,577) (26,785) (48,527) - - (704) - - - - 581,250 (91,066) (48,527) 28,596,410 10,371,174 5,093,306 2,991,247 38,310 47,090,447 Accumulated depreciation and impairment At 3 January 2022 (12,684,557) (6,208,028) (3,008,896) (1,548,952) (5,108) (23,455,541) Depreciation during the period (2,166,098) (619,284) (298,010) (163,320) (6,129) (3,252,841) Disposals during the period Impairment during the period Transfers At 1 January 2023 - (41,328) 64,380 (1,602) - (55,802) 21,420 (7,220) 55,802 (2,922) (1,983) - - - - 82,878 (52,133) - (14,891,983) (6,820,336) (3,236,904) (1,717,177) (11,237) (26,677,637) Net Book Value as at 3 January 2022 15,960,380 4,210,982 1,693,671 1,295,014 33,202 23,193,249 Net Book Value as at 1 January 2023 13,704,427 3,550,838 1,856,402 1,274,070 27,073 20,412,810 66 Annual Report & Financial Statements 2022 10. Property, plant and equipment (continued) The right of use assets relates to one class of underlying assets, being the property leases entered into for various restaurants. At each reporting date the Group considers any indication of impairment to the carrying value of its property, plant and equipment. The assessment is based on expected future cash flows and Value-in-Use calculations are performed annually and at each reporting date and is carried out on each restaurant as these are separate ‘cash generating units’ (CGU). Value-in-use was calculated as the net present value of the projected risk-adjusted post-tax cash flows plus a terminal value of the CGU. A pre-tax discount rate was applied to calculate the net present value of pre-tax cash flows. The discount rate was calculated using a market participant weighted average cost of capital. A single rate has been used for all restaurants as management believe the risks to be the same for all restaurants. The recoverable amount of each CGU has been calculated with reference to its value-in-use. The key assumptions of this calculation are shown below: Sales growth Discount rate 3% 5.5% Number of years projected over life of lease The projected sales growth was based on the Group’s latest forecasts at the time of review. The key assumptions in the cashflow pertain to revenue growth. Management have determined that growth based on industry average growth rates and actuals achieved historically are the best indication of growth going forward. The Directors are confident that the Group is largely immune from the effects of Brexit and forecasts have considered the impact of inflation and rising energy costs. Management has also performed sensitivity analysis on sales inputs to the model and noted no material sensitivities in the model. Based on the review, an impairment charge of £52,133 (2022: £336,357) was recorded for the year. Annual Report & Financial Statements 2022 67 Financial Statements Consolidated financial statements & notes 11. Subsidiaries The subsidiaries of Comptoir Group PLC, all of which have been included in these consolidated financial statements, are as follows: Name Timerest Limited Chabane Limited* Comptoir Franchise Limited Shawa Group Limited* Shawa Bluewater Limited* Shawa Limited Shawa Westfield Limited Shawa Rupert Street Limited* Comptoir Stratford Limited* Comptoir South Ken Limited* Comptoir Soho Limited* Comptoir Central Production Limited* Comptoir Westfield London Limited* Levant Restaurants Group Limited* Comptoir Chelsea Limited* Comptoir Bluewater Limited* Comptoir Wigmore Limited* Comptoir Kingston Limited* Comptoir Broadgate Limited* Comptoir Manchester Limited* Comptoir Restaurants Limited Comptoir Leeds Limited* Comptoir Oxford Street Limited* Comptoir I.P. Limited* Comptoir Reading Limited* Comptoir Bath Limited* Comptoir Exeter Limited* Yalla Yalla Restaurants Limited Comptoir Haymarket Ltd* Comptoir Oxford Limited* *Dormant companies **52 weeks ending 1 January 2023 Country of incorporation and principal place of business Proportion of ownership interest as at year end England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales 2023** 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% The registered office address for all subsidiaries is Unit 2, Plantain Place, Crosby Row, London, England, SE1 1YN. 68 Annual Report & Financial Statements 2022 12. Inventories Finished goods and goods for resale 13. Trade and other receivables Trade receivables Other receivables Prepayments and accrued income Total trade and other receivables 14. Trade and other payables Trade payables Accruals Other taxation and social security Other payables Total trade and other payables Group 1 January 2023 Group 2 January 2022 £ 474,655 £ 465,890 Group 1 January 2023 Group 2 January 2022 £ 256,841 318,018 645,194 £1,220,053 £ 51,389 323,687 323,918 698,994 Group 1 January 2023 Group 2 January 2022 £ 2,307,855 2,701,001 1,309,913 80,906 6,399,675 £ 2,027,821 3,054,952 996,938 51,828 6,131,539 Annual Report & Financial Statements 2022 69 Financial Statements Consolidated financial statements & notes 15. Borrowings Amounts falling due within one year: Bank loans Total borrowings Amounts falling due after more than one year: Bank loans Total borrowings Group 1 January 2023 Group 2 January 2022 £ £ 600,000 600,000 600,000 600,000 1,600,000 1,600,000 2,200,000 2,200,000 The bank loan relates to a £3m Coronavirus Business Interruption Loan Scheme (“CBILS”) loan. The CBILS loan is secured by way of fixed charges over the assets of various Group companies. The CBIL loan of £2,200,000 represent amounts repayable within one year of £600,000 (2022: £600,000) and £1,600,000 (2022: £2,200,000) repayable in more than one year. The bank loan has a six-year term with maturity date in 2026. The loan has an initial interest free period of 12 months followed by a rate of interest of 2.5% over the Bank base rate. 16. Provisions for liabilities 1 January 2023 2 January 2022 £ 167,953 - 194,135 362,088 £ 859,414 (497,326) 362,088 £ 133,369 373,033 353,012 859,414 £ 832,455 26,959 859,414 Provisions for leasehold property dilapidations Provisions for rent reviews per lease agreements Provisions for payroll pension costs Total provisions Movements on provisions: At beginning of period Provision in the year (net of releases) At end of period 70 Annual Report & Financial Statements 2022 16. Provisions for liabilities (continued) Provisions for leasehold property dilapidation repairs are recognised when the Group has a present obligation to carry out dilapidation repair work on the leasehold premises before the property is vacated. The amount recognised as a provision is the best estimate of the costs required to carry out the dilapidations work and is spread over the expected period of the tenancy. Provisions for rent reviews relates to any increases in rent that may become payable based on scheduled rent review dates as per lease agreements. This was all settled during the period. The payroll provision relates to a one-off provision as a result of a review of the current pension scheme in place as part of the transition to Payroll Bureau services. 17. Deferred taxation Deferred tax assets and liabilities are offset where the Group or Company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes: Group Liabilities 2023 Liabilities 2022 £ £ Accelerated capital allowances (351,425) (344,190) Tax losses - - (351,425) (344,190) Movements in the year: Net liability at 1 January Assets 2023 £ - 79,458 79,458 Group 2023 £ (106,659) Assets 2022 £ - 450,849 450,849 Group 2022 £ - (Credit)/charge to Statement of Comprehensive Income (note 7) 378,626 (106,659) Net liability/(asset) at year end 271,967 (106,659) The deferred tax liability set out above is related to accelerated capital allowances and will reverse over the period that the fixed assets to which it relates are depreciated. The deferred tax asset on tax losses has been recognised as management expect that there will be sufficient profits available in future to utilise against this amount. Annual Report & Financial Statements 2022 71 Financial Statements Consolidated financial statements & notes 18. Share capital Authorised, issued and fully paid 1 January 2023 2 January 2022 Number of 1p shares Brought forward Issued in the period At the end of the year £ £ 122,666,667 122,666,667 - - 122,666,667 122,666,667 Nominal value Authorised, issued and fully paid 1 January 2023 2 January 2022 Brought forward Issued in the period At the end of the year 19. Other reserves £ £ 1,226,667 1,226,667 - - 1,226,667 1,226,667 The other reserves amount of £145,099 (2022: £129,722) on the balance sheet reflects the credit to equity made in respect of the charge for share-based payments made through the income statement and the purchase of shares in the market in order to satisfy the vesting of existing and future share awards under the Long-Term Incentive Plan. For further details, refer to note 21. 72 Annual Report & Financial Statements 2022 20. Retirement benefit schemes Defined contribution schemes 1 January 2023 2 January 2022 Charge to profit and loss £ 159,281 £ 140,908 A defined contribution scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. 21.Share-based payments Equity-settled share-based payments On 4 July 2018, the Group established a Company Share Option Plan (“CSOP”) under which 4,890,000 share options were granted to key employees. On the same day, the options which had been granted under the Group’s existing EMI share option scheme were cancelled. The CSOP scheme includes all subsidiary companies headed by Comptoir Group PLC. The exercise price of all of the options is £0.1025 and the term to expiration is 3 years from the date of grant, being 4 July 2018. All of the options have the same vesting conditions attached to them. On 21 May 2021, the Group established a new Company Share Option Plan (“CSOP”) under which 3,245,000 share options were granted to key employees. The CSOP scheme includes all subsidiary companies headed by Comptoir Group PLC. The exercise price of all of the options is £0.0723 and the term to expiration is 3 years from the date of grant, being 21 May 2021. All of the options have the same vesting conditions attached to them. A share-based payment charge of £15,377 (2022: £32,436) was recognised during the year in relation to the new scheme and this amount is included within administrative expenses and added back in calculating adjusted EBITDA. 1 January 2023 average exercise price 2 January 2022 average exercise price No. of shares £ £ No. of shares £ CSOP options Options outstanding, beginning of year Granted Cancelled 6,045,000 - 0.1025 0.0723 3,310,000 3,245,000 (1,775,000) - (510,000) Options outstanding, end of year 4,270,000 0.0874 6,045,000 Options exercisable, end of year 2,300,000 0.1025 3,200,000 0.1025 0.0723 - 0.0874 0.1025 Annual Report & Financial Statements 2022 73 Financial Statements Consolidated financial statements & notes 21.Share-based payments (continued) The Black-Scholes option pricing model is used to estimate the fair value of options granted under the Group’s share-based compensation plan. The range of assumptions used and the resulting weighted average fair value of options granted at the date of grant for the Group were as follows: Risk free rate of return Expected term Estimated volatility Expected dividend yield July 2018 On grant date May 2021 On grant date 0.1% 3 years 51.3% 0% 0.39% 3 years 64% 0% Weighted average fair value of options granted £0.03527 £0.03050 Risk free interest rate The risk-free interest rate is based on the UK 10-year Gilt yield. Expected term The expected term represents the maximum term that the Group’s share options in relation to employees of the Group are expected to be outstanding. The expected term is based on expectations using information available. Estimated volatility The estimated volatility is the amount by which the price is expected to fluctuate during the period. No share options were granted during the current year, the estimated volatility for the share options issued in the prior year was determined based on the standard deviation of share price fluctuations of similar businesses. Expected dividends Comptoir’s Board of Directors may from time to time declare dividends on its outstanding shares. Any determination to declare and pay dividends will be made by Comptoir Group PLC’s Board of Directors and will depend upon the Group’s results, earnings, capital requirements, financial condition, business prospects, contractual restrictions and other factors deemed relevant by the Board of Directors. In the event that a dividend is declared, there is no assurance with respect to the amount, timing or frequency of any such dividends. Based on this uncertainty and unknown frequency, no dividend rate was used in the assumptions to calculate the share based compensation expense. 74 Annual Report & Financial Statements 2022 22. Reconciliation of profit to cash generated from operations Operating profit for the year Depreciation Loss on disposal of fixed assets Impairment of assets Rent concessions Lease modifications Share-based payment charge Movements in working capital Increase in inventories (Increase)/decrease in trade and other receivables Decrease in payables and provisions Cash from operations 1 January 2023 2 January 2022 £ 1,945,147 3,252,841 8,188 78,266 £ 2,347,261 3,659,196 38,098 336,356 (171,856) (1,284,744) - 15,377 (8,765) (521,065) (229,184) 4,368,949 (444,359) 32,436 (41,219) 401,934 (369,173) 4,675,786 23. Reconciliation of changes in cash to the movement in net cash/(debt) Net cash/(debt): 1 January 2023 2 January 2022 £ £ At the beginning of the period (13,314,538) (17,771,065) Movements in the year: Bank and other borrowings Lease liabilities Non-cash movements in the period Cash inflow At the end of the period 600,000 3,031,097 (728,236) 62,524 200,000 2,014,626 207,778 2,034,123 (10,349,153) (13,314,538) Annual Report & Financial Statements 2022 75 Financial Statements Consolidated financial statements & notes 23. Reconciliation of changes in cash to the movement in net cash/(debt) (continued) Represented by: At 1 January 2021 Cash flow movements in the period Non- cash flow movements in the period Cash and cash equivalents 7,833,676 2,034,123 £ £ At 2 January 2022 £ 9,867,799 (2,800,000) £ - - (3,000,000) 200,000 (22,604,741) 2,014,626 207,778 (20,382,337) (17,771,065) 4,248,749 207,778 (13,314,538) At 3 January 2022 £ 9,867,799 (2,800,000) Cash flow movements in the period Non- cash flow movements in the period £ 62,524 600,000 £ - - At 1 January 2023 £ 9,930,323 (2,200,000) (20,382,337) 3,031,097 (728,236) (18,079,476) (13,314,538) 3,693,621 (728,236) (10,349,153) Bank loans Lease liabilities Cash and cash equivalents Bank loans Lease liabilities 24. Financial instruments The Group finances its operations through equity and borrowings, with the borrowing interest subject to 2.5% per annum over base rate. Management pay rigorous attention to treasury management requirements and continue to: Ensure sufficient committed loan facilities are in place to support anticipated business requirements; Ensure the Group’s debt service will be supported by anticipated cash flows and that covenants will be complied with; and Manage interest rate exposure with a combination of floating rate debt and interest rate swaps when deemed appropriate The Board closely monitors the Group’s treasury strategy and the management of treasury risk. Further details of the Group’s capital risk management can be found in the report of the Directors. 76 Annual Report & Financial Statements 2022 24. Financial instruments (continued) Further details on the business risk factors that are considered to affect the Group are included in the Strategic Report and more specific financial risk management (including sensitivity to increases in interest rates) are included in the Report of the Directors. Further details on market and economic risk and headroom against covenants are included in the Strategic Report. Financial assets and liabilities Group financial assets: 1 January 2023 2 January 2022 Cash and cash equivalents Trade and other receivables Total financial assets £ 9,930,323 574,859 £ 9,867,799 375,076 10,505,182 10,242,875 Group financial liabilities: 1 January 2023 2 January 2022 Trade and other payables excl. corporation tax Bank loan Short-term financial liabilities Bank loan Long-term financial liabilities Total financial liabilities The bank loan has an interest rate of 2.5% per annum over base rate. £ 5,276,259 600,000 5,876,259 1,600,000 1,600,000 7,476,259 £ 5,919,360 600,000 6,519,360 2,200,000 2,200,000 8,719,360 Annual Report & Financial Statements 2022 77 Financial Statements Consolidated financial statements & notes 24. Financial instruments (continued) The maturity profile of anticipated gross future cash flows, including interest, relating to the Group’s non-derivative financial liabilities, on an undiscounted basis, are set out below: As at 2 January 2022 Within one year Within two to five years Total As at 1 January 2023 Within one year Within two to five years Total Trade and other payables* Bank loans £ £ 6,990,953 - 6,990,953 6,761,763 - 6,761,763 600,000 2,200,000 2,800,000 600,000 1,600,000 2,200,000 *Excluding corporation tax. Fair value of financial assets and liabilities All financial assets and liabilities are accounted for at cost and the Directors consider the carrying value to approximate their fair value. 25. Financial risk management The Group’s and Company’s financial instruments comprise investments, cash and liquid resources, and various items, such as trade receivables and trade payables that arise directly from its operations. The vast majority of the Group’s and Company’s financial investments are denominated in sterling. Neither the Group nor the Company enter into derivatives or hedging transactions. It is, and has been throughout the period under review, the Group’s and Company’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group’s and Company’s financial instruments are credit risk, liquidity risk, foreign currency risk, interest rate risk and investment risk. The Group does not have a material exposure to foreign currency risk. 78 Annual Report & Financial Statements 2022 25. Financial risk management (continued) The Board reviews policies for managing each of these risks, and they are summarised as follows: Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Group. Counterparties for cash balances are with large established financial institutions. The Group is exposed to credit related losses in the event of non-performance by the financial institutions but does not expect them to fail to meet their obligations. As a retail business with trading receipts settled either by cash or credit and debit cards, there is very limited exposure from guest transactions. The Group is exposed to credit risk in respect of commercial discounts receivable from suppliers but the Directors believe adequate provision has been made in respect of doubtful debts and there are no material amounts past due that have not been provided against. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum exposure to credit risk. Liquidity risk The Group has built an appropriate mechanism to manage liquidity risk of the short, medium and long-term funding and liquidity management requirements. Liquidity risk is managed through the maintenance of adequate cash reserves and bank facilities by monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group’s loan facilities (as set out in note 16), ensure continuity of funding, provided the Group continues to meet its covenant requirements (as detailed in the report of the Directors). Foreign currency risk The Group is not materially exposed to changes in foreign currency rates and does not use foreign exchange forward contracts. Interest rate risk Exposure to interest rate movements has been controlled historically through the use of floating rate debt to achieve a balanced interest rate profile. The Group does not currently have any interest rate swaps in place as the continued reduction in the level of debt combined with current market conditions results in a low level of exposure. The Group’s exposure will continue to be monitored and the use of interest rate swaps may be considered in the future. Investment risk Investment risk includes investing in companies that may not perform as expected. The Group’s investment criteria focus on the quality of the business and the management team of the target company, market potential and the ability of the investment to attain the returns required within the time horizon set for the investment. Due diligence is undertaken on each investment. The Group regularly reviews the investments in order to monitor the level of risk and mitigate exposure where appropriate. Annual Report & Financial Statements 2022 79 Financial Statements Consolidated financial statements & notes 26. Lease commitments The Group has leases assets including 25 restaurants and one head office location within the United Kingdom. The Group has elected to not take the practical expedient for short term and low values leases, therefore all leases have been included. The remaining lease terms range from less than one year to 19 years with an average remaining lease term of 7 years. Information about leases for which the Group is a lessee is presented below: Net book value of right of use assets 1 January 2023 2 January 2022 Balance at 1 January Additions Depreciation change Impairment charge Modifications £ 15,960,380 - £ 17,596,744 961,807 (2,166,098) (2,286,551) (41,328) (48,527) (70,101) (241,519) 13,704,427 15,960,380 Maturity analysis - contractual undiscounted cash flows 1 January 2023 2 January 2022 Within one year More than one year £ £ (2,982,848) (3,108,285) (18,763,863) (21,746,711) (21,746,711) (24,854,996) Lease liabilities included in the statement of financial position 1 January 2023 2 January 2022 Current Non-current £ £ (2,351,410) (2,387,104) (15,728,066) (17,995,233) (18,079,476) (20,382,337) 80 Annual Report & Financial Statements 2022 26. Lease commitments (continued) Amounts charged/(credited) in profit or loss 1 January 2023 2 January 2022 Interest on lease liabilities Expenses relating to variable lease payments Rent concessions Lease modifications £ 948,619 444,327 (171,856) - 1,221,090 £ 801,037 613,531 (1,284,744) (444,359) (314,535) Some restaurant leases contained clauses on variable lease payments where additional lease payments may be required dependant on the revenue being generated at that particular restaurant. Variable lease payments ranged from 9% -15% of revenue in excess of the existing base rent per the respective lease agreements. Amounts recognised in statement of cash flow 1 January 2023 2 January 2022 Total cash outflow for leases £ 3,031,097 3,031,097 £ 2,014,626 2,014,626 Annual Report & Financial Statements 2022 81 Financial Statements Consolidated financial statements & notes 27. Related party transactions Remuneration in respect of key management personnel, defined as the Directors for this purpose, is disclosed in note 5. Further information concerning the Directors’ remuneration is provided in the Directors’ remuneration report. During the year, the Group paid fees to the following related parties: M Kitous L Kitous Remuneration Pension £ 35,200 18,418 53,618 £ 854 365 1,219 Total £ 36,054 18,783 54,837 During the period, the Group also paid fees of £68,655 (2022: £41,250) to Messrs Gerald Edelman, a firm in which former Non-Executive Director R Kleiner is a partner. The fees were paid in relation to accountancy and corporate finance services provided to the Group. 28. Subsequent events On 27 January 2023, the Group exited their lease for the Comptoir Libanais Leeds restaurant. 29. Ultimate controlling party The Company has a number of shareholders and is not under the control of any one person or ultimate controlling party. 82 Annual Report & Financial Statements 2022 Parent Company accounts (under UK GAAP) Company balance sheet as at 2 January 2022 Fixed assets Intangible assets Tangible assets Investments Current assets Debtors Cash and cash equivalents Total assets Liabilities Current liabilities Creditors Borrowings Non-current liabilities Borrowings Provisions for liabilities Total liabilities Net assets Equity Share capital Share premium Other reserves Retained earnings Total equity Notes 1 January 2023 2 January 2022 £ £ ii iii iv v vi vii vii viii ix ix ix ix 29,134 10,282 146,479 185,895 3,635,522 54,236 3,689,758 42,110 11,749 131,102 184,961 4,178,022 517,285 4,695,307 3,875,653 4,880,268 (1,501,421) (600,000) (2,101,421) (1,600,000) (1,238) (3,702,659) 172,994 1,226,667 10,050,313 145,099 (11,249,085) 172,994 (1,197,993) (600,000) (1,797,993) (2,200,000) (1,070) (3,999,063) 881,205 1,226,667 10,050,313 129,722 (10,525,497) 881,205 As permitted by section 408 of the Companies Act 2006, a separate profit and loss account has not been presented for the holding company. During the year the Company recorded a loss of £723,588 (2022: £30,108). Remuneration of the auditor is borne by a subsidiary undertaking, Timerest Limited. The financial statements of Comptoir Group PLC (company registration number 07741283) were approved by the Board of Directors and authorised for issue on 09 May 2023 and were signed on its behalf by: Nick Ayerst – Chief Executive Officer Annual Report & Financial Statements 2022 83 Financial Statements Consolidated financial statements & notes Company financial statements – under UK GAAP Accounting policies and basis of preparation Basis of accounting Dividends The financial statements for the Company have been prepared under FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102”) and the requirements of the Companies Act 2006. The Group financial statements have been prepared under IFRS and are shown separately. The Company financial statements have been prepared under the historical cost convention in accordance with applicable UK accounting standards and on the going concern basis. Equity dividends are recognised when they become legally payable. Interim dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Investments in subsidiaries The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Group (its subsidiaries). This company is a qualifying entity for the purposes of FRS 102, being a member of a Group where the parent of that Group prepares publicly available consolidated financial statements, including this Company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. The Company has therefore taken advantage of exemptions from the following disclosure requirements: The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate using accounting policies consistent with those of the parent. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Investments are valued at cost less any provision for impairment. Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures; Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel The financial statements of the Company are consolidated in the financial statements of Comptoir Group PLC, which are available at the Companies House. Going concern The Board of Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. More details on the going concern uncertainties are discussed in the going concern note in the Principal Accounting Policies for the Consolidated Financial Statements. Thus, the Board continues to adopt the going concern basis of accounting in preparing the financial statements. Intangible assets – goodwill Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the income statement over its economic life, which is estimated to be ten years from the date of acquisition. Tangible assets Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation Depreciation is charged to the income statement on a reducing balance basis and on a straight-line basis over the estimated useful lives of corresponding items of property, plant and equipment: Plant and machinery 15% on reducing balance Fixture, fittings and equipment 10% on reducing balance. 84 Annual Report & Financial Statements 2022 Share-based payment transactions Reserves The share options have been accounted for as an expense in the Company in which the employees are employed, using a valuation based on the Black-Scholes model. An increase in the investment held by the Company in the subsidiary in which the employees are employed, with a corresponding increase in equity, is recognised in the accounts of the Company. Information in respect of the Company’s share-based payment schemes is provided in Note 21 to the consolidated financial statements. The value is accounted for as a capital contribution in relevant Group subsidiaries that employ the staff members to whom awards of share options have been made. The Company’s reserves are as follows: Called up share capital represents the nominal value of the shares issued Share premium represents amounts paid in excess of the nominal value of shares Other reserves represent share-based payment charges recognised in equity, and; Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments Annual Report & Financial Statements 2022 85 Financial Statements Consolidated financial statements & notes Company financial statements – under UK GAAP Notes to the financial statements i) Employee costs and numbers The Company has no employees. All Group employees and Directors’ remuneration are disclosed within the Group’s consolidated financial statements. ii) Intangible assets Goodwill Cost At 1 January 2021 Additions during the year At 2 January 2022 Accumulated amortisation and impairment At 1 January 2021 Amortisation during the year At 2 January 2022 Net Book Value as at 31 December 2020 Net Book Value as at 2 January 2022 Cost At 3 January 2022 Additions during the year At 1 January 2023 Accumulated amortisation and impairment At 3 January 2022 Amortisation during the year Impairment during the year At 1 January 2023 Net Book Value as at 2 January 2022 Net Book Value as at 1 January 2023 86 Annual Report & Financial Statements 2022 Total £ 89,961 - 89,961 (38,855) (8,996) (47,851) 51,106 42,110 89,961 - 89,961 (47,851) (8,996) (3,980) (60,827) 42,110 29,134 ii) Intangible assets (continued) The intangible assets reported on the statement of financial position consists of goodwill arising on the acquisition on 14 December 2016 of the trade and assets of Agushia Limited. In accordance with FRS 102, goodwill arising on business combinations is amortised over the expected life of the asset and is subject to an impairment review annually if the life of the assets is indefinite or expected to be greater than 10 years, or more frequently if events or changes in circumstances indicate that it might be impaired. Therefore, goodwill arising on acquisition is monitored to compare the value in use to its carrying value. During the period an impairment charge of £3,980 (2022: £nil) was recorded. iii) Property, plant and equipment Leasehold land & buildings Plant & machinery Fixtures, fittings & equipment £ £ £ Cost At 1 January 2021 At 2 January 2022 Accumulated depreciation and impairment At 1 January 2021 Depreciation during the year At 2 January 2022 Net Book Value as at 31 December 2020 Net Book Value as at 2 January 2022 Cost At 3 January 2022 Disposals during the year At 1 January 2023 Accumulated depreciation and impairment At 3 January 2022 Depreciation during the year Depreciation eliminated on disposal At 1 January 2023 Net Book Value as at 2 January 2022 Net Book Value as at 1 January 2023 Total £ 43,500 43,500 (30,096) (1,655) (31,751) 13,404 11,749 43,500 (11,290) 32,210 (31,751) (1,467) 11,290 5,555 5,555 (2,602) (274) (2,876) 2,953 2,679 5,555 - 5,555 (2,876) (252) - 11,290 11,290 26,655 26,655 (11,290) - (11,290) - - (16,204) (1,381) (17,585) 10,451 9,070 11,290 (11,290) 26,655 - - 26,655 (17,585) (1,215) - (11,290) - 11,290 - - - (18,800) (3,128) (21,928) 9,070 7,855 2,679 2,427 11,749 10,282 Annual Report & Financial Statements 2022 87 Financial Statements Consolidated financial statements & notes iv) Investments in subsidiary undertakings Cost At 2 January 2022 Share-based payment charge At 1 January 2023 Amounts written off For the period ended 1 January 2023 Net book value at 2 January 2022 Net book value at 1 January 2023 v) Debtors Other debtors Amounts receivable from Group undertakings Total Amounts falling due after more than one year: Deferred tax asset Total Shares Capital contributions £ 1,380 - 1,380 - 1,380 1,380 £ 129,722 15,377 145,099 - 129,722 145,099 Total £ 131,102 15,377 146,479 - 131,102 146,479 1 January 2023 2 January 2022 £ 3,606 3,631,916 3,635,522 £ 4,339 4,171,566 4,175,905 - 2,117 3,635,522 4,178,022 During the period, an impairment provision of £590,282 (2022: £nil) was recorded in relation to amounts receivable from group undertakings. 88 Annual Report & Financial Statements 2022 vi) Creditors Amounts due to Group undertakings Other creditors Accruals Total vii) Borrowings Amounts falling due within one year: Bank loans Total borrowings Amounts falling due after more than one year: Bank loans Total borrowings 1 January 2023 2 January 2022 £ 1,477,451 1,470 22,500 £ 527,105 670,888 - 1,501,421 1,197,993 1 January 2023 2 January 2022 £ £ 600,000 600,000 600,000 600,000 1,600,000 1,600,000 2,200,000 2,200,000 The bank loan relates to a £3m Coronavirus Business Interruption Loan Scheme (“CBILS”) loan. The CBILS loan is secured by way of fixed charges over the assets of various Group companies. The CBIL loan of £2,200,000 represent amounts repayable within one year of £600,000 (2022: £600,000) and £1,600,000 (2022: £2,200,000) repayable in more than one year. The bank loan has a six-year term with maturity date in 2026. The loan has an initial interest free period of 12 months followed by a rate of interest of 2.5% over the Bank base rate. Annual Report & Financial Statements 2022 89 Financial Statements Consolidated financial statements & notes viii) Provisions Deferred tax recognised in balance sheet: Deferred tax liabilities: Brought forward Charge/(credit) to profit or loss Total ix) Share capital and reserves Share capital Share premium Other reserves Retained earnings £ £ £ £ Total £ (1,047) 2,285 1,238 Total £ At 1 January 2021 1,226,667 10,050,313 97,286 (10,495,389) 878,877 Share-based payment charge Total comprehensive loss for the year - - - - 32,436 - 32,436 - (30,108) (30,108) At 2 January 2022 1,226,667 10,050,313 129,722 (10,525,497) 881,205 At 3 January 2022 1,226,667 10,050,313 129,722 (10,525,497) 881,205 Share-based payment charge Total comprehensive loss for the year - - - - 15,377 - 15,377 - (723,588) (723,588) At 1 January 2023 1,226,667 10,050,313 145,099 (11,249,085) 172,994 x) Related party transactions The Company has taken advantage of the exemption in FRS 102 and has not disclosed transactions entered into between members of the Group. xi) Subsequent events Details of subsequent events are discussed in note 28 to the Group financial statements. xii) Ultimate controlling party The Company has no ultimate controlling party. 90 Annual Report & Financial Statements 2022 Enquiries: Comptoir Group PLC Nick Ayerst – Tel: 0207 486 1111 finnCap Group PLX (NOMAD and broker) Simon Hicks – Tel: 0207 220 0500 Camarco (Media enquiries) Jennifer Renwick – Tel: 0203 757 4994 Annual Report & Financial Statements 2022 91 Notice of Annual General Meeting Comptoir Group PLC Registered in England and Wales with no. 7741283 Notice is hereby given that the 2023 Annual General Meeting of Comptoir Group PLC will be held at Unit 2, Plantain Place, Crosby Row, London Bridge, SE 1 1YN on 27 June 2023 at 1.00 p.m. for the transaction of the following business: Ordinary Business As ordinary business to consider and, if thought fit, to pass the following resolutions, each of which will be proposed as ordinary resolutions: THAT, the Company’s annual accounts for the year ended 1 January 2023, together with the report of the auditors and the Directors thereon, be received and adopted THAT, Tony Kitous, who retires in accordance with the Company’s articles of association, be re-elected as a Director THAT, Nick Ayerst, who retires in accordance with the Company’s articles of association, be re-elected as a Director THAT, Beatrice Lafon, who retires in accordance with the Company’s articles of association, be re-elected as a Director THAT, Jean Michel Orieux, who retires in accordance with the Company’s articles of association, be re-elected as a Director THAT, UHY Hacker Young LLP be re-appointed as auditors to the Company until the conclusion of the next Annual General Meeting at which accounts of the Company are presented and the Directors be authorised to fix their remuneration Special Business As special business to consider and, if thought fit, to pass the following resolutions, of which resolution 5 will be proposed as an ordinary resolution and resolution 6 as a special resolution: 1. THAT, the Directors be and they are generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the Company to allot shares, or to grant rights to subscribe for or to convert any securities into shares, of up to an aggregate nominal amount of £96,000 during the period commencing on the passing of this resolution and expiring on the date of the next annual general meeting of the Company (unless previously revoked, varied or extended by the Company in general meeting), but so that the Company may before such expiry make an offer or agreement which would or might require shares to be allotted, or rights to subscribe for or to convert any securities into shares to be granted, after such expiry and the Directors may allot shares, or grant rights to subscribe for or to convert any securities into shares, in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. This authority is in substitution for all subsisting authorities, to the extent unused. 2. THAT, the Directors be and they are empowered during the period commencing on the passing of this resolution and expiring on the date of the next annual general meeting of the Company (unless previously revoked, varied or extended by the Company in general meeting) pursuant to section 570(1) of the Act to allot equity securities (within the meaning of section 560(1) of the Act) wholly for cash pursuant to the authority conferred by resolution 5 above as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to: (i) the allotment of equity securities for cash up to an aggregate nominal amount of £96,000; and (ii) The allotment of equity securities in connection with an offer of such securities by way of rights to holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings of such shares, but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal or practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange, but so that this authority shall allow the Company to make offers or agreements before the expiry and the Directors may allot equity securities in pursuance of such offers or agreements as if the powers conferred hereby had not so expired. 92 Annual Report & Financial Statements 2022 By order of the Board On behalf of the Directors Nick Ayerst - Chief Executive Officer 09 May 2023 Registered Office: Unit 2, Plantain Place, Crosby Row, London, England, SE1 1YN The following notes explain your general rights as a shareholder and your right to attend and vote at this Meeting or to appoint someone else to vote on your behalf. 1. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the number of votes they may cast), shareholders must be registered in the Register of Members of the Company at close of trading on 23 June 2023. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting. 2. Shareholders, or their proxies, intending to attend the Meeting in person are requested, if possible, to arrive at the Meeting venue at least 20 minutes prior to the commencement of the Meeting at 1.00 p.m. (UK time) 27 June 2023 so that their shareholding may be checked against the Company’s Register of Members and attendances recorded. 3. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to attend and to speak and vote on their behalf at the Meeting. 4. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder of the Company. 5. In the case of joint holders, where more than one of the joint holders’ purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s Register of Members in respect of the joint holding (the first named being the most senior). 6. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. 7. You will not receive a hard copy form of proxy for the Meeting in the post. Instead, you will be able to vote electronically using the link www.signalshares.com. You will need to log into your Signal Shares account, or register if you have not previously done so. To register you will need your Investor Code. This is detailed on your share certificate or available from our Registrar, Link Group. If you need help with voting online, please contact the portal team of our Registrar, Link Group, on 0371 664 0391. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09.00 – 17:30, Monday to Friday excluding public holidays in England and Wales or via email at shareholderenquiries@ linkgroup.co.uk. 8. You can vote either: by logging on to www.signalshares.com and following the instructions; or in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out For a proxy appointment to be valid, it must be submitted and received by Link Group by 1.00 p.m. on 23 June 2023, which is not less than 48 hours (excluding non-working holidays) before the time appointed for the meeting, or adjourned meeting. Annual Report & Financial Statements 2022 93 Notice of Annual General Meeting Comptoir Group PLC Registered in England and Wales with no. 7741283 9. If you return more than one proxy appointment, the appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities are open to all shareholders and those who use them will not be disadvantaged. 10. The return of a completed proxy, will not prevent a shareholder from attending the Meeting and voting in person if he/she wishes to do so. “Proxymity Voting - if you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 1.00pm on 23 June 2023 in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote.” 11. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer’s agent (ID RA10) by 1.00 p.m. on 23 June 2023, which is not less than 48 hours (excluding non-working holidays) before the time appointed for the meeting, or adjourned meeting. For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 12. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 94 Annual Report & Financial Statements 2022 16. Any shareholder attending the Meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered. The following documents are available for inspection during normal business hours at the registered office of the Company on any business day from the date of this Notice until the time of the Meeting and may also be inspected at the Meeting venue, as specified in this Notice, from am on the day of the Meeting until the conclusion of the Meeting: Copies of the Directors’ letters of appointment or service contracts. 17. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this Notice or any related documents (including the form of proxy) to communicate with the Company for any purposes other than those expressly stated. 18. A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the Company’s website at www.comptoirlibanais.com 13. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a shareholder provided that no more than one corporate representative exercises powers in relation to the same shares. 14. As at 05 May 2023 (being the latest practicable business day prior to the publication of this Notice), the Company’s ordinary issued share capital consists of 122,666,667 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 05 May 2023 are 122,666,667. 15. Under Section 527 of the Companies Act 2006, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s financial statements (including the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual financial statements and reports were laid in accordance with Section 437 of the Companies Act 2006 (in each case) that the shareholders propose to raise at the relevant meeting. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting for the relevant financial year includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on a website. Annual Report & Financial Statements 2022 95 COMPTOIR GROUP PLC COMPTOIR GROUP Unit 2, Plantain Place Unit 2, Plantain Place Crosby Row, London Bridge Crosby Row, London Bridge SE1 1YN SE1 1YN