Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2013
Company registration no: 3770602
Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2013
Contents
Directors and Advisers
Chairman’s Statement
Strategic Report
Directors’ Report
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Statements of Changes in Equity
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow Statement
Notes to the Consolidated Cash Flow Statement
Company Cash Flow Statement
Notes to the Company Cash Flow Statement
Notes to the Financial Statements
1
2-4
5-6
7-8
9-10
11
12-13
14
15
16
17
18
19
20-50
Minoan Group Plc
Directors and Advisers
Directors
C W Egleton FCA (Chairman)
D C Wilson (Managing Director)
B D Bartman BSc (Econ), FCA
G D Cook MA, ACA
T R C Hill B.Arch
Company secretary
W C Cole FCA
Registered office
5 Old Bailey
London
EC4M 7BA
Bankers
HSBC Bank plc, London
Barclays Bank Plc, Glasgow
Legal advisers
Pinsent Masons LLP, London
Nominated adviser and broker
WH Ireland Limited, London
Head office
3rd Floor
Sterling House
20 Renfield Street
Glasgow
G2 5AP
Administration office
3rd Floor
AMP House
Dingwall Road
Croydon
Surrey
CR0 2LX
Registrars
Neville Registrars Limited, Halesowen, West Midlands
Independent auditor
Chantrey Vellacott DFK LLP
Chartered Accountants and Statutory Auditor
Russell Square House
10-12 Russell Square
London
WC1B 5LF
1
Minoan Group Plc
Chairman’s Statement
Introduction
The year under review saw the successful completion of the consolidation of the Group’s travel business under
the Stewart Travel brand and very strong trading results. The Group’s project in Greece (the “Project”) was
granted Fast Track status and a major new financing facility was completed.
The Group has made significant progress in its twin objectives of the creation of a widely based travel and
leisure business, and the realisation of value from the Project, having put in place the management, financial
and technical resources to support both significant further growth of the travel and leisure division, and the
progress of the Project towards Presidential Decree and beyond.
Since the year end we have continued to move forward with the buy in of the 20% stake in the travel business
sold earlier in the financial year, the completion and submission of the Strategic Environmental Assessment
(“SEA”) for the Project and the start of the Public Consultation process on the SEA. In addition, we have
agreed to acquire the trade and assets of Martin Singer Travel Limited, a successful, long established,
independent business in the Aberdeen area.
Greece
The Project has already received the support of the local municipality in Sitia and the next step, assuming a
successful Public Consultation, is the preparation and gazetting of the Presidential Decree setting out the
development zones for the Project as approved under the Fast Track legislation.
Whilst the Group’s team in Greece continues to work on matters concerning the granting of the Presidential
Decree, the focus of their efforts is beginning to change and move towards the practical implementation of the
Project.
The Group has completed major steps forward for the Project - Fast Track Approval, the preparation and
submission of the SEA and its release for Public Consultation. With their completion, looking ahead, the
primary objective for the directors is the crystallisation of shareholder value. It is intended to explore all
possible avenues open to the Company including the progression of a number of ongoing discussions with
potential joint venture partners and operators as well the instigation of discussions with other parties who have
registered their interest in participating in the Project.
On a more general note, it has been announced that funds are being made available by the Greek National and
Regional Governments to improve the road network in the region and also to allow the completion of the new
passenger terminal at Sitia airport, both of which are expected to increase the tourism value of the local area.
Travel and Leisure
The Group’s travel and leisure division has had another successful year with total transaction value growing by
37% for the year ended 31 October 2013 to reach £51.2 million (2012: £37.4 million) and a profit before tax
from the continuing business of £604,000 (2012: £413,000).
2
Minoan Group Plc
Chairman’s Statement (continued)
Travel and Leisure (continued)
Excluding the effect of acquisition and significant discontinued business streams, the gross profit of the
division increased by 9%. This impressive growth reflects a mix of volume growth and the fruits of a conscious
strategy to move away from traditional retail business towards higher margin business, thereby generating an
overall increase in gross margin. In particular, the businesses of Cruise and Golf grew substantially ahead of
the market.
Although the additional overhead base of acquired businesses has contributed to an increase in divisional
overheads, underlying overheads remain broadly stable on a like for like basis. More generally, and in line with
the underlying strategy, the infrastructure and overhead base of the business, together with the management
team, remain at a level appropriate to support a far greater volume of business and acquisition targets continue
to be actively pursued.
Assuming the successful completion of its most recent acquisition, which remains subject to due diligence, the
Group’s travel division will have acquired and successfully integrated eight travel agencies and businesses to
date.
Financial review
During the year, cash used in operating activities amounted to £2.2 million, funded by borrowings under the £5
million loan facility secured with Hillside International Holdings Limited (“Hillside”), other loans, plus the
sale of a 20% interest in the T&L division, generating proceeds in the year of £2.5 million.
Since the year end, we have re-acquired the minority interest in the T&L division for a total consideration of
£930,000, drawn further upon the Hillside facility, and directors and senior management have demonstrated
their confidence in the Group by settling fees totalling £699,000 in equity and options.
Board change
On 19 February 2014 , the Company announced that Barry Bartman was retiring from the role of Group
Finance Director with effect from the end of that month whilst remaining on the Board as a non-executive
director. The Company has commenced the process of recruiting a new Group Finance Director.
Barry has made an enormous contribution since joining the Board and my colleagues and I are very pleased
that he has agreed to remain as a non-executive director so that the Group may continue to benefit from his
wide experience and, in particular, his knowledge of the Greek business climate and the Project.
On a personal note, I am delighted that Barry is to remain with the Group.
Outlook
Greece
The progress made in the last few months has been gratifying and there is no doubt that there is now support
for the Project at all levels within the Greek Government and communities local to the Project. I believe that
the Board’s long held belief both in the Project and in our team’s ability to bring it to fruition is now closer
than ever to being realised.
3
Minoan Group Plc
Chairman’s Statement (continued)
Outlook (continued)
Travel and Leisure
The trading performance of the division since the year end has continued to strengthen.
In respect of the continuing business streams, total transaction value for the first five months of the current
financial year increased by 10% and gross profit by 15%. The division’s best performing areas are Corporate
Travel and Cruise, both of which are registering annual sales growth rates of over 20%.
The Board is delighted by Travel and Leisure’s performance so far this financial year. It is clear that sales are
rising and discounts falling, which is the virtuous circle we aimed to achieve.
Our confidence in the outlook for the current year is reinforced by that the fact that the results for February are
better than the industry trend with March reflecting even stronger growth.
The Travel and Leisure business continues to offer good opportunities for expansion and the Board will
continue its buy-and-build strategy in seeking to acquire businesses that add value to our Stewart Travel brand.
We are continuing discussions with a number of prospective acquisitions in the North of England and expect to
be able to update the market in the coming weeks.
Conclusion
This has been our most successful year to date and my colleagues and I look forward to reporting to
shareholders on further significant progress in all areas of the Group’s business over the next twelve months.
Christopher W Egleton
Chairman
1 April 2014
4
Minoan Group Plc
Strategic Report
The directors present their Strategic Report and the audited consolidated financial statements for the year
ended 31 October 2013.
Review of business
A review of the Group’s business is given in the Chairman’s Statement on page 2.
The directors are of the opinion that analysis using key performance indicators for the Project is not necessary
for an understanding of the development, performance or position of that operation.
The key performance indicators used in the travel businesses are total transaction value and gross profit. Total
transaction value has increased to £51,164,000 from £37,379,000 and gross profit has increased to £5,196,000
from £3,733,000. This reflects the impact of a full year’s trading for businesses acquired part way through the
year ended 31 October 2012, new businesses acquired during the year ended 31 October 2013 and underlying
growth.
The Group’s financial instruments and risk management are discussed in note 15.
Principal risks and uncertainties
The Group’s key risks currently remain centred round the Project. The Group has an ongoing requirement to
raise capital to finance its working capital. As has been the case for the past several years, the Group is in
continual discussions with a variety of individuals and commercial parties regarding the provision of funding
to enable the Group’s current and future obligations and requirements to be met. These discussions are at
varying stages of development and the Board is confident that all necessary funding will be forthcoming within
a timescale which will enable the Group to move forward to provide a return to shareholders in due course (see
also note 1).
As the Project progresses and moves towards its implementation stage, the normal risks associated with a
development of its size and nature will apply. These include, inter alia, planning consents, availability of
project finance, construction costs and market demand.
The risks relating to the travel businesses are primarily its reliance on supply from tour operators and airlines,
and changes in general economic and other business conditions which may adversely affect demand for
tourism products. There are no material risks related to currency.
The Board is confident that the value of the Group’s asset in Crete, combined with the future prospect for
development in other areas of activity, justifies the conclusion that it is appropriate to prepare the financial
statements on the going concern basis.
As referred to in note 1, certain costs in respect of the Project, which were reallocated to non-current assets in a
prior year, have been transferred to inventories during the year. Although its long term commitment to the
Project remains unchanged, the directors have re-assessed the treatment of this asset in the light of changes in
the project financing market and their previously stated intention to develop the Project with joint venture
partners and other interested parties. In order to provide flexibility in their future plans, and having taken
relevant advice, it has been decided that the costs referred to above, currently shown in non-current assets,
should be reallocated to current assets as at 31 October 3013. The directors envisage that any joint venture or
partnership arrangements will preserve the nature of the Group’s long term commitment to the Project.
5
Minoan Group Plc
Strategic Report (continued)
Corporate social responsibility
The Group has demonstrated its social responsibilities through its iterative approach to the evolution of the
Project, which has involved a transparent process and extensive consultation with stakeholders. The Project
design embraces the principles of the five capitals of sustainable development to ensure that all related matters
have been taken into account.. Thus the more usual concerns related to the protection of the environment,
flora, fauna, hydrogeology and the ecology generally have drawn in considerations of wider issues including
social, cultural, human and economic matters as well as those related to the extensive use of renewable energy
and many other items contributing to a healthy carbon footprint. The Project is strictly focused on the long
term restoration and preservation of the environment as a whole and puts in place a sustainable management
plan, involving local representatives and experts, to ensure a robust, pro-active management system is
implemented aimed at protecting the area for future generations.
Approved by the Board of Directors and signed by order of the Board.
C W Egleton
Director
1 April 2014
6
Minoan Group Plc
Directors’ Report
The directors present their annual report for the year ended 31 October 2013.
Principal activities
The Company is a public limited company incorporated in England and Wales and quoted on AIM. The
Company’s principal activity in the year under review was that of a holding and management company of a
Group involved in the design, creation, development and management of environmentally friendly luxury
hotels and resorts and in the operation of independent travel businesses, through which the Group provides a
broad range of services including, inter alia, transportation, hotel and other accommodation and leisure
services.
Results and dividends
The financial statements are prepared in accordance with EU adopted International Financial Reporting
Standards (“IFRS”) and IFRIC interpretations and the Companies Act 2006.
The Group made a loss for the year, after taxation, of £1,150,000 (31 October 2012: £1,371,000). The loss also
includes a charge in respect of share-based payments (note 17) in the amount of £386,000 (31 October 2012:
£290,000). This charge does not involve any cash payment.
No dividend is proposed for the year (31 October 2012: Nil).
A review of the Group’s business appears in the Chairman’s Statement on page 2 and the Strategic Report on
page 5.
Statement of directors’ responsibilities
The directors are responsible for preparing and reporting the financial statements in accordance with applicable
laws and regulations. Company law requires the directors to prepare financial statements for each financial
year. Under that law the directors have prepared the Group and Parent Company financial statements in
accordance with IFRS as adopted by the EU. The financial statements are required by law to give a true and
fair view of the state of affairs of the Company and the Group as at the end of the financial period and of the
profit or loss of the Group for that period.
In preparing the financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state the financial statements comply with IFRS as adopted by the EU; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.
The directors confirm that they have complied with the above requirements in preparing the financial
statements.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and Group and enable them to ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
7
Minoan Group Plc
Directors’ Report (continued)
Statement of directors’ responsibilities (continued)
The directors are responsible for the maintenance and integrity of the Group web site, www.minoangroup.com.
Legislation in the UK governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Each director as at the date of this report has confirmed that, to the best of his knowledge, the Group financial
statements, which have been prepared in accordance with IFRS as adopted by the EU,
•
•
give a true and fair view of the assets, liabilities, financial position and loss of the Group; and
include in the Chairman’s Statement, the Strategic Report and Directors’ Report a fair review of the
development, performance and position or the Group, together with a description of the principal
risks and uncertainties it faces.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the
Group for that year.
The directors in office at the end of the period remain in office as at the date of signing of the Directors’
Report.
Insurance
The Company had in place during the year, and remaining in place at the date of this report, Directors and
Officers Liability Insurance covering the directors of all group companies.
Events after the balance sheet date
The directors draw attention to the events disclosed in note 20.
Auditor and disclosure of information to the auditor
Each director, as at the date of this report, has confirmed that insofar as they are aware there is no relevant
audit information (that is, information needed by the Group’s auditor in connection with preparing their report)
of which the Group’s auditor is unaware, and that they have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information and to establish that the Group’s
auditor is aware of that information.
A resolution to re-appoint Chantrey Vellacott DFK LLP as the auditor for the ensuing year will be proposed at
the Annual General Meeting of the Company in accordance with section 489 of the Companies Act 2006.
Approved by the Board of Directors and signed by order of the Board.
C W Egleton
Director
1 April 2014
8
Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
We have audited the financial statements of Minoan Group Plc for the year ended 31 October 2013 which
comprise the consolidated statement of comprehensive income, the consolidated and company statements of
changes in equity, the consolidated and company balance sheets, the consolidated and company cash flow
statements and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union and
as regards the parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the 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 company
and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and the auditor
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. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the group’s
and the parent company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the
financial statements.
In addition, we read all the financial and non-financial information in the Report and Financial Statements to
identify material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Opinion on financial statements
In our opinion:
•
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 October 2013 and of the group’s loss for the year then ended.
9
Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Opinion on financial statements (continued)
•
•
•
the group financial statements have been properly prepared in accordance with IFRS as adopted by
the European Union;
the parent company financial statements have been properly prepared in accordance with IFRS as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006;
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Emphasis of matter - project in Crete and going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of
the disclosures made in the Chairman’s Statement, the Strategic Report and in note 1 to the financial
statements concerning the uncertainty regarding the Group’s ability to secure detailed planning consents and
project finance in order to bring its project in Crete to fruition and to continue as a going concern, which is
dependent on the group’s ability to continue to raise capital to finance its working capital requirements to
move forward, whether with the Project or with the travel and leisure business.
The financial statements do not include any adjustments that would result if the group was unsuccessful in this
regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following where under the Companies Act 2006 we are required 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.
Ian Staunton (Senior Statutory Auditor)
for and on behalf of CHANTREY VELLACOTT DFK LLP
Chartered Accountants and Statutory Auditor
LONDON
1 April 2014
10
Minoan Group Plc
Consolidated Statement of Comprehensive Income
Year ended 31 October 2013
Total transaction value
Revenue
Cost of sales
Gross profit
2013
2012
£’000
£’000
51,164
37,379
9,217
4,021
5,196
9,453
5,720
3,733
Operating expenses
(5,416)
(3,867)
Other operating expenses:
Corporate development costs
Charge in respect of share-based payments
Operating loss
Finance costs
(457)
(386)
(1,063)
(866)
(290)
(1,290)
(119)
(57)
Loss before taxation
(1,182)
(1,347)
Taxation credit/(charge)
Loss after taxation
Profit for year attributable to non-controlling
interest
32
(1,150)
(24)
(1,371)
22
-
Loss for year attributable to equity holders of the
Company
(1,172)
(1,371)
Loss per share attributable to equity holders of
the Company: Basic and diluted
(0.78)p
(1.14)p
All of the activities of the Group are classed as continuing.
The Group had no recognised gains and losses other than the results for the year set out above.
The notes on pages 20 to 50 form part of these financial statements.
11
Minoan Group Plc
Statements of Changes in Equity
Year ended 31 October 2013
Consolidated
Year ended 31 October 2013
Balance at 1 November 2012
(Loss)/ profit for the year
Net proceeds from share issues
Disposal of non-controlling
interest
Share-based payments
Balance at 31 October 2013
Share
capital
£’000
14,541
-
152
-
-
14,693
Share
premium
£’000
28,349
-
432
-
-
28,781
Year ended 31 October 2012
interest
Total
equity
Non-controlling
Retained
Merger
reserve
earnings
£’000
£’000
(11,084)
- 41,155
(1,172) 22 (1,150)
- - 584
£’000
9,349
-
-
£’000
-
(127)
- 386
9,349 (11,997)
897
-
919 41,745
770
386
Balance at 1 November 2011
Loss for the year
Net proceeds from share issues
Share-based payments:
Current year charges
Settlement of liabilities
Balance at 31 October 2012
Share
capital
£’000
14,054
-
487
-
-
14,541
Retained
Merger
Share
reserve
earnings
premium
£’000
£’000
£’000
24,809 9,349 (10,388)
(1,371)
Non-controlling
£’000
- 37,824
- (1,371)
interest
Total
equity
£’000
-
3,540
-
-
- - 4,027
-
-
28,349
- 290 - 290
- 385 - 385
- 41,155
(11,084)
9,349
12
Minoan Group Plc
Statements of Changes in Equity (continued)
Year ended 31 October 2013
Company
Year ended 31 October 2013
Balance at 1 November 2012
Loss for the year
Net proceeds from share issues
Share-based payments charge
Balance at 31 October 2013
Year ended 31 October 2012
Balance at 1 November 2011
Loss for the year
Net proceeds from share issues
Share-based payments:
Current year charges
Settlement of liabilities
Balance at 31 October 2012
Share
capital
£’000
14,541
-
152
-
14,693
Share
capital
£’000
14,054
-
487
Share
premium
£’000
28,349 3,060 45,950
Retained
earnings
£’000
Total
equity
£’000
- (773) (773)
432 -
- 386
28,781 2,673
584
386
46,147
Share
premium
£’000
24,809 3,123
£’000
Retained
earnings
41,986
- (738) (738)
3,540 -
4,027
Total
equity
£’000
-
-
14,541
- 290
- 385
28,349 3,060
290
385
45,950
13
Minoan Group Plc
Consolidated Balance Sheet as at 31 October 2013
Notes to
the
Financial
Statements
2013
£’000
2012
£’000
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Inventories
Receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium account
Merger reserve account
Retained earnings
Non-controlling interest
Total equity
Liabilities
Non-current liabilities
Current liabilities
Total liabilities
7
8
10
11
14
12
12
8,678
719
9,397
38,367
896
271
39,534
8,229
20,706
28,935
16,763
1,063
657
18,483
48,931
47,418
14,693
28,781
9,349
(11,997)
40,826
919
41,745
1,159
6,027
7,186
14,541
28,349
9,349
(11,084)
41,155
-
41,155
-
6,263
6,263
Total equity and liabilities
48,931
47,418
The financial statements on pages 11 to 50 were approved and authorised for issue by the Board of Directors
on 1 April 2014.
Signed on behalf of the Board of Directors
C W Egleton
Director
14
Minoan Group Plc
Company Balance Sheet as at 31 October 2013
Assets
Non-current assets
Investments
Total non-current assets
Current assets
Receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium account
Retained earnings
Total equity
Liabilities
Non-current liabilities
Current liabilities
Total liabilities
Note to the
Financial
Statements
2013
£’000
2012
£’000
9
11
14
12
12
26,436
26,436
23,416
35
23,451
25,936
25,936
22,722
5
22,727
49,887
48,663
14,693
28,781
2,673
46,147
1,100
2,640
3,740
14,541
28,349
3,060
45,950
-
2,713
2,713
Total equity and liabilities
49,887
48,663
Company registration number: 3770602
The financial statements on pages 11 to 50 were approved and authorised for issue by the Board of Directors
on 1 April 2014.
Signed on behalf of the Board of Directors
C W Egleton
Director
15
Minoan Group Plc
Consolidated Cash Flow Statement
Year ended 31 October 2013
Notes to the
Consolidated
Cash Flow
Statement
2013
£’000
2012
£’000
Cash flows from operating activities
Net cash outflow from continuing operations
1
Finance costs
Net cash used in operating activities
(2,066)
(119)
(2,185)
(1,656)
(57)
(1,713)
Cash flows from investing activities
Acquisition of trade and assets of Stewart Travel
Centre
Cash acquired with Stewart Travel Centre
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from the issue of ordinary shares
Loans received
Net proceeds from sale of shares in subsidiary
company
Payments of hire purchase liabilities
Net cash generated from financing activities
Net (decrease)/increase in cash
Cash at beginning of year
Cash at end of year
-
-
(371)
(315)
(686)
-
1,760
770
(45)
2,485
(386)
657
271
(360)
286
(45)
(233)
(352)
1,522
691
-
-
2,213
148
509
657
16
Minoan Group Plc
Notes to the Consolidated Cash Flow Statement
Year ended 31 October 2013
1 Cash flows from operating activities
Loss before taxation
Finance costs
Depreciation
Amortisation
Loss/(gain) on disposal of property, plant and equipment
Exchange (gain)/loss relevant to property, plant and equipment
Increase in inventories
Share-based payments
Decrease/(increase) in receivables
Decrease in current liabilities
Non cash movement in non-current assets
Non cash movement in intangible assets
Non cash movement in investments
Non cash movement in inventories
Non cash movement in equity
Net cash outflow from continuing operations
2013
£’000
2012
£’000
(1,182)
(1,347)
119
124
45
102
(11)
(1,291)
386
175
(278)
20,313
(179)
-
(20,313)
(76)
(2,066)
57
59
-
(4)
19
(1,111)
675
(599)
(1,294)
200
-
100
-
1,589
(1,656)
17
Minoan Group Plc
Company Cash Flow Statement
Year ended 31 October 2013
Notes to the
Company
Cash Flow
Statement
2013
£’000
2012
£’000
Cash flows from operating activities
Net cash outflow from continuing operations
1
Finance costs
Net cash used in operating activities
Cash flows from investing activities
Investment in subsidiary companies
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from the issue of ordinary shares
Loans received
Net cash generated from financing activities
Net increase/(decrease) in cash
Cash at beginning of year
Cash at end of year
(1,611)
(119)
(1,730)
-
-
-
1,760
1,760
30
5
35
(493)
(57)
(550)
(1,670)
(1,670)
1,522
691
2,213
(7)
12
5
18
Minoan Group Plc
Notes to the Company Cash Flow Statement
Year ended 31 October 2013
1 Cash flows from operating activities
Loss before taxation
Finance costs
Share-based payments
Increase in receivables
(Decrease)/increase in current liabilities
Non cash movement in investments
Non cash movement in equity
Net cash outflow from continuing operations
2013
£’000
2012
£’000
(773)
119
386
(694)
(73)
(500)
(76)
(1,611)
(738)
57
675
(3,167)
866
-
1,814
(493)
19
Minoan Group Plc
Notes to the Financial Statements
Year ended 31 October 2013
1 Accounting policies
These consolidated financial statements are prepared in accordance with EU adopted International Financial
Reporting Standards (“IFRS”) and the International Financial Reporting Interpretations Committee (“IFRIC”)
interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
The principal accounting policies adopted in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.
The International Accounting Standards Board and IFRIC have issued the following standards and
interpretations with an effective date after the date of these financial statements and which have not been
adopted early:
Standard/Interpretation
IAS 19 (amendments)
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IAS 27
IAS 28 (revised)
Title
Employee benefits
Consolidated financial statements
Joint arrangements
Disclosure of interest in other entities
Fair value measurement
Separate financial statements
Investments in associates and joint
ventures
The Board has not yet established the effect of these standards on the Group.
Effective date
1 January 2013
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
Going concern
The financial statements have been prepared on the going concern basis.
The directors have considered the financial and commercial position of the Group in relation to its project in
Crete (the “Project”) and also in respect of its travel and leisure (“T&L”) business. In particular, the directors
have reviewed the matters referred to below.
Having received approval for the Project to qualify as a strategic investment and to be eligible for inclusion
under the provisions of the Fast Track Law, the new process approved by the Greek Government allowing for
quicker permitting time for Fast Track projects, the Company is currently awaiting the approval of the
Strategic Environmental Assessment (“SEA”) in respect of the Project, which was submitted on 23 December
2013. The SEA became available for public consultation, which includes the relevant ministries, on 19
February 2014. All comments should be received by the end of March 2014.
Accordingly, the directors consider it relevant that having completed a financial joint venture agreement (see
note 12) prior to Fast Track and any other consents, they will conclude further Project joint venture agreements
in the near term. In addition, the directors are considering a number of other agreements which are likely to
have a major beneficial impact on the Group’s resources.
In addition to specific Project related matters as noted above, and as has been the case in the past, the Group
continues to raise capital in order to meet its existing working capital requirements and the directors consider
that any necessary funds will be raised as required.
20
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
1 Accounting policies (continued)
Going concern (continued)
With the first acquisitions in the planned expansion of its T&L business having been completed, the Group is
now generating profits and cash flow within this sector of its activities.
Having taken these matters into account, the directors consider that the going concern basis of preparation of
the financial statements is appropriate.
Basis of accounting
The financial statements are prepared under the historical cost convention except for financial instruments
which are stated at fair value.
No statement of comprehensive income is presented by the Company as permitted by Section 408 of the
Companies Act 2006. The Company’s loss before taxation for the year ended 31 October 2013 was £773,000
(year ended 31 October 2012: £738,000).
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its
subsidiaries as at 31 October 2013 using uniform accounting policies. The Group’s policy is to consolidate the
income of subsidiaries acquired in the year from the date of acquisition to the Group’s next accounting
reference date. The financial statements of Loyalward Hellas S.A., the Company’s Greek subsidiary, are
consolidated using the currency exchange rate ruling at the period end. Intra-group balances are eliminated on
consolidation.
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration
for each acquisition is measured at the aggregate of the fair values of the assets given, liabilities incurred and
equity instruments issued to the Group in exchange for control of the acquired. Acquisition related costs are
recognised in the consolidated statement of comprehensive income as incurred.
Critical accounting estimates and judgements
The preparation of the financial statements in accordance with generally accepted financial accounting
principles requires the directors to make critical accounting estimates and judgements that affect the amounts
reported in the financial statements and accompanying notes. The estimates and assumptions that have a
significant risk of causing material adjustments to the carrying value of assets and liabilities within the next
financial year are discussed below:
● in capitalising the costs directly attributable to the Project (see property, plant and equipment
and inventories below), and continuing to recognise goodwill, the directors are of the opinion
that the Project will be brought to fruition and that the carrying value of property, plant and
equipment, inventories and goodwill is reasonable;
21
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
1 Accounting policies (continued)
Goodwill
Goodwill arising on acquisitions represents the difference between the fair value of the net assets acquired and
the consideration paid.
Goodwill is tested annually for impairment. In particular, the directors have considered the current value of the
Group’s overall interest in the Project and its progress and are of the opinion that the Project site has longer
term value in excess of the carrying value of non-current assets and inventories. The directors’ opinion of the
current value also takes into account the estimate dated 27 June 2011 of the development value of the Project
site in the order of €100 million, which was included in the Company’s AIM readmission document published
on 30 September 2011 and which was reaffirmed in March 2012.
In addition, the directors are of the opinion that the projected value of the Travel and Leisure business, which is
treated as one cash generating unit, is in excess of the value of the amount of goodwill attributable to it. This
opinion is arrived at on the basis of the good names of the businesses acquired and the fact that the
establishment of business clusters affords the Company the opportunity to realise certain economies of scale
thus improving cash flow and profitability.
Goodwill arising from acquisitions has been recognised as an asset (see note 7).
Property, plant and equipment
In a prior year, certain costs in respect of the Project were reallocated to non-current assets. Although its long
term commitment to the Project remains unchanged, the Group has re-assessed the treatment of this asset in the
light of changes in the project financing market and its previously stated intention to develop the Project with
joint venture partners and other interested parties. In order to provide flexibility in its future plans, and having
taken relevant advice, the Group has decided that the costs in respect of the Project currently shown in non-
current assets should be shown as a current asset as at 31 October 2013. As a result, these costs are now
included in inventories. It is envisaged that any joint venture or partnership arrangements will preserve the
nature of the Group’s long term commitment to the Project.
Property, plant and equipment is stated at historical cost less accumulated depreciation and any recognised
impairment loss.
Depreciation is provided in order to write off the cost of each asset, less its estimated residual value, over its
estimated useful life on a straight line basis as follows:
Freehold land:
Leasehold improvements:
Acquisition costs of land:
Freehold property:
Plant and equipment:
Fixtures and fittings:
Motor vehicles:
IT projects:
capital cost not depreciated
over the term of the lease
3 years
50 years
3 to 5 years
3 years
3 to 5 years
5 years
22
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
1 Accounting policies (continued)
Property, plant and equipment (continued)
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down
immediately to its recoverable amount. The directors consider that the book values of non-current assets do not
differ materially from the market values.
Research and development
Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised
as an expense except that expenditure incurred on development projects (e.g. IT projects) is capitalised as an
intangible asset to the extent that such expenditure is expected to generate future economic benefits. The
expenditure is amortised over its useful economic life of five years.
Investments
Investments are stated at cost less any impairment deemed necessary. Any gains or losses on investments will
be taken to the statement of changes in equity.
Inventories
Inventories represent costs of goods and services directly attributable to the acquisition and development of the
Project and are stated at the lower of cost and net realisable value.
Foreign exchange
Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the date of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are
retranslated at the rates ruling at that date. Any translation differences arising are dealt with in the consolidated
statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and short-term deposits held with banks.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and shown less any provision for amounts
considered irrecoverable.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Leasing commitments
Rentals paid under operating leases are charged to the consolidated statement of comprehensive income on a
straight line basis over the period of the lease.
Revenue
Depending upon the contractual arrangements with the customer the Group acts either as agent or principal.
Where the Group acts as principal, revenue is stated at the contractual value of goods and services provided
and is recognised typically when the customer pays the final balance due on the holiday purchased.
23
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
1 Accounting policies (continued)
Revenue (continued)
Where the Group acts as an agent between the service provider and the end customer, revenue is presented on a
net basis as the difference between the sales to the customer and the cost of services purchased and not the total
transaction value. When acting as an agent, revenue is recognised when it is notified by the principal as having
been earned and due for payment.
Gross profit
Gross profit represents the aggregate amount earned on bookings where the Group acts as either agent or
principal. In the case of the Group acting as principal, gross profit is the difference between the sales price to
the customer (total transaction value) and the cost of services purchased.
Government grants
Government grants are recognised in the consolidated statement of comprehensive income when there is
reasonable assurance that the conditions attached to them will be complied with and the grants will be
received.
Share-based payments
The Group has a Long Term Incentive Plan (“LTIP”) in which any director or employee selected by the
remuneration committee may participate. Awards under the LTIP have been granted on the basis that certain
performance conditions will be met.
The Company has also granted options to purchase Ordinary Shares of 1p each . A charge has been made in the
consolidated statement of comprehensive income in respect of the LTIP and options using the Black-Scholes
and Monte Carlo fair value pricing models as appropriate at the grant date and charged over the vesting
periods. This charge does not involve any cash payment. A corresponding entry is recognised in equity.
Pensions
Loyalward Limited operates a stakeholder pension scheme for its employees.
Stewart Travel Limited operates a defined contribution pension scheme. Contributions payable to the pension
scheme are charged to the consolidated statement of comprehensive income in the period to which they relate.
Taxation
Current taxes, where applicable, are based on the results shown in the financial statements and are calculated
according to local tax rules using tax rates enacted, or substantially enacted, by the balance sheet date and
taking into account deferred taxation. Deferred tax is computed using the liability method. Under this method,
deferred tax assets and liabilities are determined based on temporary differences between the financial
reporting and tax bases of assets and liabilities and are measured using enacted rates and laws that will be in
effect when the differences are expected to reverse. Deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting,
nor taxable profit or loss. Deferred tax assets are recognised to the extent that it is probable that future taxable
profits will arise against which the temporary differences will be utilised.
24
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
1 Accounting policies (continued)
Taxation (continued)
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the
timing of the reversal of the temporary difference is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities arising in the
same tax jurisdiction are offset.
The Group is entitled to a tax deduction for amounts treated as compensation on exercise of certain employee
share options. As explained under “Share-based payments” above, a compensation expense is recorded in the
Group’s statement of comprehensive income over the period from the grant date to the vesting date of the
relevant options. As there is a temporary difference between the accounting and tax bases a deferred tax asset
is recorded. The deferred tax asset arising is calculated by comparing the estimated amount of tax deduction to
be obtained in the future (based on the Company’s share price at the balance sheet date) with the cumulative
amount of the compensation expense recorded in the statement of comprehensive income. If the amount of
estimated future tax deduction exceeds the cumulative amount of the remuneration expense at the statutory
rate, the excess is recorded directly in equity against retained earnings.
2 Information regarding directors and employees
Directors’ and key management remuneration
Year ended 31 October 2013
Fees
Sums charged by third parties for
directors’ services
Share-based payments (note 17)
Year ended 31 October 2012
Fees
Sums charged by third parties for
directors’ services
Salaries waived in lieu of grant of options -
net of share based payment charge (see
below)
Share-based payments (note 17)
Costs taken to
the consolidated
statement of
comprehensive
income
Costs taken to
inventories
£’000
£’000
241
362
-
603
-
411
-
-
411
460
60
378
898
717
60
(84)
248
941
Total
£’000
701
422
378
1,501
717
471
(84)
248
1,352
25
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
2 Information regarding directors and employees (continued)
Directors’ and key management remuneration (continued)
During the year ended 31 October 2012 outstanding fees of £684,000 due to directors, or to the suppliers of
directors’ services, were settled by the issue of Ordinary Shares of 1p each in the Company issued at a price 14
pence per share. This amount includes £12,000 of the total directors’ remuneration for the year ended 31
October 2012 shown above. The outstanding fees settled in shares include £400,000 in respect of the services
of the chairman. These amounts are in addition to the charge in respect of share-based payments.
In addition, during the year ended 31 October 2012, certain current and former directors within the Group
waived a total of £469,000 of outstanding fees due in exchange for the granting of options to purchase shares
in the Company. The effect of this has been to reduce the remuneration appearing in the consolidated statement
of comprehensive income for that year by £84,000 after adjusting for the share based payments charge in
respect of these options.
The total directors’ and key management remuneration shown above includes the following amounts in respect
of the directors of the Company, adjusted for remuneration waived in exchange for the granting of options as
referred to above:
2013
2012
Fees/Sums charged
by third parties
Share-based
payments
Fees/Sums
charged by third
parties
Share-based
payments
£’000
£’000
£’000
311
250
60
25
36
682
151
295
161
16
6
20
354
313
60
25
33
726
£’000
189
23
15
-
18
245
C W Egleton (Chairman)
D C Wilson
B D Bartman
G D Cook
T R C Hill
Directors’ interests in the Company’s LTIP and share options are shown in note 17.
26
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
2 Information regarding directors and employees (continued)
Staff costs during the period (including directors and key management)
Year ended 31 October 2013
Salaries and fees
Social security cost
Pension cost
Share-based payments (note 17)
Year ended 31 October 2012
Salaries and fees
Salaries waived in lieu of grant of options -
net of share-based payment charge
Social security cost
Pension cost
Share-based payments (note 17)
Costs taken to
the consolidated
statement of
comprehensive
income
Total
Costs taken to
inventories
£’000 £’000 £’000
285
41
-
-
326
38
-
10
-
-
48
2,966
253
3
378
3,600
2,500
(84)
217
3
248
2,884
3,251
294
3
378
3,926
2,538
(84)
227
3
248
2,932
Staff costs exclude sums charged by third parties for directors’ services.
Monthly average number of persons employed
Sales and administration
2013
2012
No.
No.
166
169
27
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
3 Loss before taxation
The loss before taxation is stated after charging:
Depreciation
Amortisation
Loss/(gain) on disposal of property, plant and equipment
Operating leases
Auditor’s remuneration:
Audit fees
Tax services
2013
£’000
2012
£’000
124
45
102
69
55
5
59
-
(4)
32
55
5
Audit fees in respect of the Company were £15,000 (31 October 2012: £15,000). Tax services fees in respect of
the Company were £2,000 (31 October 2012: £1,000).
4
Segmented information
The Group strategy and growth objectives necessitate the building of an associated infrastructure. The Group
considers it appropriate to identify separately the corporate development division together with costs related to
acquisitions. Accordingly, the Group is organised into three divisions both by business segment and
geographical location:
•
•
•
the luxury resorts division, currently being the development of a luxury resort in Crete, which
includes the central administration costs of the Group;
the Travel and Leisure division (UK), being the operation and management of the travel businesses;
and
the corporate development division (UK) as described above.
28
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
4 Segmented information (continued)
The information presented below is consistent with how information is presented to the Board, with the
Group’s accounting policies and with the geographical location of the relevant divisions.
Total transaction value
Revenue
Cost of sales
Gross profit
Operating expenses
Non-recurring expenses
Contribution to central costs, including
management
Charge in respect of share-based payments
Operating (loss)/profit
Finance costs
(Loss)/profit before taxation
Taxation receipt
(Loss)/profit after taxation
Operating expenses include:
Depreciation and amortisation
Operating leases - plant and equipment
Assets/liabilities
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
2013
Luxury
Resorts
Travel and
Leisure
£’000 £’000
Corporate
Development
£’000
Total
£’000
-
51,164
- 51,164
9,217
- 4,021
- 5,196
(569)
(569)
-
(4,592)
604
(255)
(150)
-
150
(386)
(805) 199
(119)
(924) 199
-
9,217
- 4,021
- 5,196
(457)
(457)
-
-
-
(457)
-
(457)
(5,618)
(422)
(255)
-
(386)
(1,063)
(119)
(1,182)
-
(924)
32
231
- 32
(457)
(1,150)
15 154
- 69
- 169
- 69
6,292
38,627
44,919
3,105
907
4,012
1,100
5,739
6,839
59
288
347
- 9,397
- 39,534
-
48,931
-
-
-
1,159
6,027
7,186
29
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
4 Segmented information (continued)
Total transaction value
Revenue
Cost of sales
Gross profit
Operating expenses
Charge in respect of share-based payments
Operating (loss)/profit
Finance costs
(Loss)/profit before taxation
Taxation expense
(Loss)/profit after taxation
Operating expenses include:
Depreciation
Gain on disposal
Operating leases - plant and equipment
Assets/liabilities
Non-current assets
Current assets
Total assets
Current liabilities
2012
Luxury
Resorts
£’000
-
Travel and
Leisure
£’000
37,379
Corporate
Development
£’000
-
Total
£’000
37,379
9,453
5,720
3,733
-
-
(547)
(547)
(290)
(837)
(57)
(894)
-
(894)
(3,320)
413
-
413
-
413
(24)
389
53
6
- (4)
-
32
26,602
16,859
43,461
2,333
1,624
3,957
4,471
1,792
9,453
- 5,720
- 3,733
(866)
(866)
-
(866)
-
(866)
-
(866)
(4,733)
(1,000)
(290)
(1,290)
(57)
(1,347)
(24)
(1,371)
-
-
-
-
-
-
-
59
(4)
32
28,935
18,483
47,418
6,263
30
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
5 Taxation
Consolidated
(a) Analysis of taxation expense for the year
UK corporation tax
(b) Factors affecting taxation receipt/expense for the year
Loss before taxation
Tax on ordinary activities multiplied by the standard rate in the
UK of 23.4% (2012: 24.8%)
Effects of:
Expenses not deductible for tax purposes
Other timing differences
Capital gain in excess of profit on disposal
Adjustment to tax charge in respect of previous periods
Decrease/(increase) in tax losses
Taxation (credit)/charge for the year
Taxation losses carried forward appear in note 13.
6 Loss per share
2013
£’000
(32)
2013
£’000
(1,182)
(277)
96
(12)
-
(23)
184
(32)
2012
£’000
24
2012
£’000
(1,347)
(334)
52
(69)
494
-
(119)
24
Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by
the weighted average number of ordinary shares in issue during the year. Diluted earnings per share are
calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary
shares. There are no dilutive instruments in issue, therefore, the basic loss per share and diluted loss per share
are the same. The weighted average number of shares used in calculating basic and diluted loss per share for
the year ended 31 October 2013 was 150,942,792 (31 October 2012: 120,434,862).
31
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
7 Intangible assets
Consolidated
Cost
At beginning of year
Additions
At end of year
Accumulated amortisation
At beginning of year
Provided in year
At end of year
Net book value
At beginning of year
At end of year
2013
Goodwill
IT Projects
£’000
£’000
7,996
179
8,175
-
-
-
233
315
548
-
45
45
Total
£’000
8,229
494
8,723
-
45
45
2012
Goodwill
IT Projects
£’000
£’000
Total
£’000
6,477
1,519
7,996
- 6,477
233
233
1,752
8,229
-
-
-
-
-
-
-
-
-
7,996
8,175
233
503
8,229
8,678
6,477
7,996
-
233
6,477
8,229
The directors have assessed the recoverable amount of the Project as being greater than the combined carrying
value of the goodwill and inventories at 31 October 2013 (see also note 1 above).
32
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
8 Property, plant and equipment
Year ended 31 October 2013
Consolidated
(see note)
The
Project
Freehold
property, land
and acquisition
costs
Furniture,
fittings, plant
and
equipment
Motor
vehicles
Leasehold
improvements
£,000
£’000
£’000
£’000
£’000
Cost
At 1 November 2012
20,313
185
800
Exchange adjustments
-
Transfer to inventories (see
note 1)
(20,313)
Disposals
Additions
At 31 October 2013
Accumulated depreciation
At 1 November 2012
Disposals
Provided in year
At 31 October 2013
Net book value
At 31 October 2013
-
-
-
-
-
-
Total
£’000
21,326
11
(20,313)
(170)
541
1,395
620
(68)
124
676
28
1
-
(13)
-
16
26
(10)
-
16
-
-
-
-
143
143
-
-
-
-
7
-
-
4
196
46
-
3
49
3
-
(157)
394
1,040
548
(58)
121
611
147
429
-
143
719
33
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
8 Property, plant and equipment (continued)
Year ended 31 October 2012
Freehold
property, land
and acquisition
costs
The Project
Furniture,
fittings, plant
and
equipment
Motor
vehicles
£,000
£’000
£’000
£’000
Total
£’000
Consolidated
Cost
At 1 November 2011
20,313
Exchange adjustments
Acquired with Stewart
Travel Centre
Disposals
Additions
-
-
-
At 31 October 2012
20,313
Accumulated depreciation
At 1 November 2011
Acquired with Stewart
Travel Centre
Disposals
Provided in year
At 31 October 2012
Net book value
-
-
-
-
-
402
(14)
-
(203)
-
185
51
-
(9)
4
46
194
(4)
565
-
45
800
77
417
-
54
548
22 20,931
(1)
(19)
7
-
-
28
21
4
-
1
26
572
(203)
45
21,326
149
421
(9)
59
620
At 31 October 2012
20,313
139
252
2
20,706
34
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
9 Investments
Company
Year ended 31 October 2013
Cost
At 1 November 2012
Additions
At 31 October 2013
Impairment
At 31 October 2013
Shares in
subsidiaries
£’000
25,936
500
26,436
-
-
Net book value at 31 October 2013
26,436
Year ended 31 October 2012
Cost
At 1 November 2011
Additions
At 31 October 2012
Impairment
At 31 October 2012
Shares in
subsidiaries
£’000
24,266
1,670
25,936
-
-
Net book value at 31 October 2012
25,936
Interests in subsidiaries
Loyalward Limited (100%) - A company incorporated in England involved in resort design, creation, services
and management.
Loyalward Leisure Plc (100%) - A non-trading company incorporated in England.
Loyalward Hellas S.A. (5.61% owned by Minoan Group Plc and 94.39% owned by Loyalward Limited) - A
company incorporated in Greece engaged in corporate, resort and renewable energy business management in
Greece.
King World Travel Limited (100%) - A company incorporated in Scotland operating as a retail travel agent.
During the year the trade and assets of King World Travel Limited were acquired by Stewart Travel Limited in
exchange for shares in that company.
35
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
9 Investments (continued)
Interests in subsidiaries (continued)
John Semple Travel Limited (100%) - A company incorporated in Scotland operating as a multi-faceted retail
and online travel agent. During the year the trade and assets of John Semple Travel Limited were acquired by
Stewart Travel Limited partly in exchange for shares in that company.
Stewart Travel Limited - A company incorporated in Scotland operating as a multi-faceted travel distributor.
As stated above, during the year Stewart Travel Limited acquired the trade and assets of King World Travel
Limited and John Semple Travel Limited partly in exchange for shares. In addition, Minoan Group Plc entered
into an agreement by which an investor subscribed for 20% of the enlarged issued share capital of Stewart
Travel Limited for an initial subscription price of £770,000, which could increase up to £2 million depending
on future performance. The excess of the value of net assets over the initial consideration has been charged
against equity.
As a consequence the ownership of Stewart Travel Limited is as follows:
Minoan Group Plc
King World Travel Limited
John Semple Travel Limited
Non-controlling interest
10 Inventories
2013
%
64.5
6.4
9.1
20.0
100.0
2012
%
100.0
-
-
-
100.0
Consolidated
Following the re-allocation of costs as referred to in note 1 above, inventories at 31 October 2013 amounted to
£38,367,000 (31 October 2012: £16,763,000), comprising costs associated with acquiring and developing the
site in Crete, planning and other design costs.
The development site of the Project is to be leased from the Public Welfare Ecclesiastical Foundation Panagia
Akrotiriani (“the Foundation”) for an initial 40 year period following contract activation which will follow the
relevant authorities approving the land planning and land uses for the Project. The Group has an option over a
further 40 years. An amount of £3.9 million is payable to the Foundation on contract activation, plus ongoing
royalties earned on revenue generated by the development.
36
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
11 Receivables
Consolidated
Trade debtors (see below)
Other debtors and prepayments
Value added tax recoverable
2013
£’000
266
559
71
896
2012
£’000
587
419
57
1,063
Trade debtors are receivable in 30 days. Of the above £36,000 (31 October 2012: £85,000) was outstanding for
more than 30 days. No provision is considered necessary in respect of irrecoverable amounts.
Company
Amounts owed by subsidiary companies (see below and note 16)
Value added tax recoverable
Amounts owed by subsidiary companies are repayable on demand.
12 Liabilities
Non-current liabilities
Consolidated
Loans repayable after one year (see below)
Hire purchase
Non-current liabilities
Company
Loans repayable after one year (see below)
2013
£’000
23,399
17
23,416
2013
£’000
1,100
59
1,159
2013
£’000
1,100
2012
£’000
22,717
5
22,722
2012
£’000
-
-
-
2012
£’000
-
£1,000,000 of this amount has been drawn down under the terms of a loan facility agreement with Hillside
International Holdings Limited (“Hillside”). The loan is repayable on or before 16 October 2016 and is subject
to interest at 8% per annum. Under the terms of the loan facility agreement Hillside has a fixed and floating
charge on the Company’s assets and a floating charge on the assets of Stewart Travel Limited, John Semple
Travel Limited and King World Travel Limited.
The remaining loan of £100,000 is unsecured, repayable on or before 31 March 2015 and subject to interest at
10% per annum.
37
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
12 Liabilities (continued)
Current liabilities
Consolidated
Trade and other payables
Deferred revenue (see below )
Taxation
Social security and other taxes
Loans (see notes 15 and 20)
Hire purchase
Accruals and deferred charges
2013
£’000
2,131
670
-
399
225
66
2,536
6,027
2012
£’000
3,393
400
24
167
243
-
2,036
6,263
The deferred revenue arises from amounts received under the terms of a financial joint venture agreement
between the Company and The Candia Investment Corporation (“Candia”) by which Candia, together with
third parties syndicated into its interest, will receive an initial 5% economic interest in the Project for a total
consideration of £1 million. A further 5% economic interest in the Project for a total consideration of £1
million may also be acquired by Candia at such time as the parties to the agreement determine. Candia will
also have the right to purchase an additional 25% economic interest in the Project, for a consideration of £12.5
million, during an agreed period after receipt of environmental approval for the Project.
In accordance with the terms of the joint venture agreement, Options to subscribe for up to 4 million Ordinary
Shares at an exercise price of 8p per share were granted after the balance sheet date. The Options are
exercisable until 30 September 2015 (see note 20).
Current liabilities
Company
Trade and other payables
Amounts owed to subsidiary companies (see below and note 16)
Loans (see note 15)
Accruals and deferred charges
2013
£’000
582
1,531
225
302
2,640
Amounts owed to subsidiary companies are interest free and repayable on demand.
2012
£’000
369
1,757
225
362
2,713
38
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
13 Deferred taxation
Consolidated
No deferred taxation asset has been recognised in the financial statements. The total potential asset is as
follows:
Tax effect of timing differences
because of:
Accelerated capital allowances
Other short term timing differences
Losses
Total potential asset
Amount recognised
2013
£’000
2012
£’000
2013
£’000
2012
£’000
(28)
784
1,873
2,629
(29)
1,157
1,836
2,964
-
-
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 20% (2012: 23%).
Company
No deferred taxation asset has been recognised in the financial statements. The total potential asset is as
follows:
Tax effect of timing differences
because of:
Other short term timing differences
Losses
Total potential asset
Amount recognised
2013
£’000
2012
£’000
2013
£’000
2012
£’000
615
243
858
619
-
619
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 20% (2012: 23%).
Following due consideration of the availability of tax losses in relation to future anticipated taxable profits, and
in accordance with IAS 12, the deferred tax asset has not been recognised. The deferred tax asset not
recognised will be recoverable should there be appropriate future taxable profits.
39
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
14 Share capital
Called up, allotted and fully paid
31 October 2013 - 161,465,704 Ordinary Shares of 1p each
54,148,031 Deferred Shares of 24p each
31 October 2012 - 145,923,865 Ordinary Shares of 1p each
54,148,031 Deferred Shares of 24p each
Debt to be settled by the issue of shares (see note 15)
8,250,000 Ordinary Shares of 1p each (2012: 8,623,593
Ordinary Shares of 1p each)
2013
£’000
1,615
12,996
-
-
14,611
82
14,693
2012
£’000
-
-
1,459
12,996
14,455
86
14,541
The rights attaching to the Ordinary Shares and the Deferred Shares are set out in the Company’s Articles of
Association, which were approved at the Annual General Meeting held on 29 March 2010.
The following share issues were made during the year under the terms of loan agreements: 4,516,230 Ordinary
Shares of 1p each at 10 pence per share, 1,687,775 Ordinary Shares of 1p each at 9.4 pence per share and
7,800,000 Ordinary Shares of 1p each at 8 pence per share. In addition, the following share issues were made
during the year to settle liabilities: 393,000 Ordinary Shares of 1p each at 10 pence per share, 177,392
Ordinary Shares of 1p each at 5.75 pence per share and 967,442 Ordinary Shares of 1p each at 5.375 pence per
share (see also note 20).
15 Financial instruments and risk management
The Group’s financial instruments comprise borrowings, cash and liquid resources and various items such as
trade receivables and trade payables that arise directly from its operations. The main purpose of these financial
instruments is to finance the Group’s operations.
It is, and has been throughout the year under review, the Group’s policy that no trading in financial instruments
shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and foreign
currency risk. The Board reviews and agrees policies for managing each of these risks and they are
summarised below.
40
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
15 Financial instruments and risk management (continued)
Liquidity risk
The Group maintains sufficient funds in local currency for operational liquidity. The Board considers liquidity
risk at Board meetings through the monitoring of cash levels and detailed cash forecasts. Funding to date has
been obtained principally through the issue of equity shares as required, either for cash or in settlement of
liabilities. The Group has also issued loan agreements which may be settled by the issue of shares. See note 1
for further information relating to current liquidity and funding risk.
In order to complete the development of the Project, the Group will require substantial additional financing. It
is the directors’ current intention to develop the Project in such a way as to minimise or eliminate the need for
further equity financing. It is intended that this will be achieved through utilising joint venture arrangements
and debt project finance.
Foreign currency risk
The Group has one overseas trading subsidiary, Loyalward Hellas S.A., which operates in Greece and whose
revenues and expenses are denominated almost exclusively in Euros. The Group finances Loyalward Hellas
S.A. via Euro transfers from Loyalward Limited as required. The amount transferred ensures that the Euro
balance held by Loyalward Hellas S.A. at each period end is not material. No Group company holds cash in
currencies other than their functional currency. The Sterling and Euro cash balances attract interest at floating
rates.
Short-term receivables and payables
Short-term receivables and payables have been excluded from the following disclosures.
Interest rate risk
The Group finances its operations through a mixture of equity and borrowings. The Group has historically
borrowed in Sterling only. At 31 October 2013 the Group had non-current liabilities of £1,159,000 (31 October
2012: Nil).
The Group’s liabilities, which are all denominated in sterling, are as follows:
Loans to be settled by the
issue of shares
Loans repayable in less than
one year
Loans repayable after one
year
Hire purchase
2013
2012
£’000
£’000
660
791
225
243
1,100
-
59
-
The loans, which are to be settled by the issue of shares at 8 pence per share, have been classified as equity in
accordance with IAS 32 (note 14).
During the year a total of £841,000 of loans was settled by the issue of shares at prices between 8 pence per
share and 10 pence per share (31 October 2012: £977,000 at prices between 8 pence per share and 12.5 pence
per share) (note 14). Also during the year ended 31 October 2012, loans forming part of the consideration for
the acquisition of John Semple Travel Limited were settled by the transfer of listed investments in the amount
of £100,000 and properties in the amount of £200,000.
41
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
15 Financial instruments and risk management (continued)
The Group has no derivatives or financial instruments other than those disclosed above. There is no material
difference between the book value and the fair value of the Group’s financial assets and liabilities at 31
October 2013 and at 31 October 2012.
16 Related party transactions
The following are related parties and provided services to the Group:
Simmons International Limited, a company in which C W Egleton is a minority shareholder.
Bizwatch Limited, a company in which J C Watts, a director of Loyalward Limited, owns 50% of the issued
share capital and M A Fitch, a director of Loyalward Hellas S.A. owns 50% of the issued share capital.
I.H.M. Industry & Hotel Management Limited, a company in which C Valassakis, a director of Loyalward
Limited, is a controlling shareholder.
B D Bartman & Co, a firm in which B D Bartman is a partner.
Transactions undertaken with these related parties in relation to directors’ services, all of which were effected
on an arm’s length basis, are shown below.
Services of the above persons
supplied in year ended
Payable as at
31.10.13
£’000
31.10.12
£’000
31.10.13
£’000
31.10.12
£’000
311
53
(2)
60
295
60
56
60
262
86
79
119
100
43
81
63
Simmons International Limited
Bizwatch Limited
I.H.M. Industry & Hotel
Management Limited
B D Bartman & Co
There have been no purchases or sales with companies within the Group. The Company’s balances outstanding
with other Group companies arising from financing transactions are shown below.
Loyalward Limited
Stewart Travel Limited
King World Travel
Limited
John Semple Travel
Limited
Loyalward Leisure Plc
(Receivable)/Payable as at 31.10.13
£’000
(Receivable)/Payable as at 31.10.12
£’000
1,494
(23,399)
(22,662)
(55)
-
1,425
-
37
295
37
42
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
17 Long term incentive plan, share options and warrants
Share-based payments charge
Year ended 31 October 2013
Share-based payments - directors
Share-based payments - other
Year ended 31 October 2012
Share-based payments - directors (see
note)
Share-based payments - other
£’000
354
32
386
245
45
290
Note:
Under the terms of the Long Term Incentive Plan (“LTIP”) any director or employee selected by the
remuneration committee may participate. Awards under the LTIP have been granted on the basis that certain
performance conditions will be met.
43
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
17 Long term incentive plan, share options and warrants (continued)
Share-based payments charge (continued)
The performance conditions are as follows:
Performance condition A (fulfilled during year ended
31 October 2012)
The achievement of any one of the following:
(i)
An investment by an investor or group
of investors acting in concert in (a) 15%
or more of the enlarged issued ordinary
share capital of Minoan Group Plc or (b)
25% or more of the issued ordinary
share capital of Loyalward Limited or
(c) 25% or more of Loyalward Limited’s
current project in Crete; or
(ii)
The acquisition, for a consideration
exceeding £250,000, of a business in the
tourism and leisure sector which is both
profitable and has a positive cash flow;
or
(iii)
The formation or acquisition of a
business in the renewable energy sector
which has a positive trading cash flow;
or
(iv)
The receipt by Loyalward Limited of
unappealable approval from the Greek
Government for its current project in
Crete, in existing or amended form.
The Group achieves a consolidated profit at EBITDA
level (ignoring any charge in respect of share-based
payments) for a six month accounting period.
The price of an ordinary share of Minoan Group Plc
remains at an average price of 50 pence or above for
ten consecutive trading days on AIM or a recognised
stock exchange
44
Performance condition B
Performance condition C
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
17 Long term incentive plan, share options and warrants (continued)
Share-based payments charge (continued)
The following awards have been granted with an expiry date of 26 April 2017:
Performance condition A
Performance condition B
Performance condition C
Maximum number of
Ordinary Shares
exercisable at 15 pence
Maximum number of
Ordinary Shares
exercisable at 15 pence
Maximum number of
Ordinary Shares
exercisable at 15 pence
1,400,000
1,000,000
130,000
150,000
120,000
2,800,000
1,400,000
1,000,000
130,000
150,000
120,000
2,800,000
1,400,000
1,000,000
130,000
150,000
120,000
2,800,000
C W Egleton
D C Wilson
B D Bartman
T R C Hill
W C Cole (director
Loyalward Limited)
The charge made for the value of the LTIP and options has been calculated using the Black-Scholes and Monte
Carlo pricing models as appropriate. As stated previously, the charge does not involve any cash payment.
The inputs into the option pricing model are as follows:
Grant date
Share price at grant date
Exercise price
LTIP
1 March 2011
15.88p
15p
Options
2 April 2013
6.38p
1p to 8p
Vesting periods
In accordance with performance conditions
Immediately
Expected volatility
21.3% to 51.74%
Option life
Expected life
Risk free rate
Expected dividends expressed as
dividend yield
6.2 years
3 years
1.85% to 5.18%
nil
47.44%
3.75 years
n/a
0.45%
nil
Fair value of options
6.08p to 76.7p
2.42p to 5.54p
45
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
17 Long term incentive plan, share options and warrants (continued)
Share-based payments charge (continued)
Expected volatility for the LTIP is determined by calculating the historic volatility of the Group’s share price
over the previous 2 years. Expected volatility for the options is determined by calculating the historic volatility
of the Group’s share price over the previous one and a half years. The expected life of the LTIP is the average
expected period to exercise. The risk free rate is the yield on zero coupon UK government bonds of a term
consistent with the assumed option life.
Directors’ interests in share options
31 October 2013
31 October 2012
Exercise
price
Ordinary
Shares
Expiry
date
Exercise
price
Ordinary
Shares
Expiry
date
Options
B D Bartman***
B D Bartman (see note
2 below)
W C Cole (director
Loyalward Limited)***
W C Cole (director
Loyalward Limited)***
W C Cole (director
Loyalward Limited)
(see note 2 below)
G D Cook***
G D Cook (see note 2
below)
Simmons International
Limited (see note 4
below)***
Simmons International
Limited (see note 4
below)***
T R C Hill***
D C Wilson
D C Wilson (see note 2
below)
D C Wilson (see note 2
below)
7p
1p
7p
7p
1p
7p
1p
7p
7p
7p
-
1p
1p
200,000
31/12/16
15p
200,000 31/12/12
1,000,000
31/12/15
1p
1,000,000
31/12/15
500,000
31/12/16
15p
500,000
31/12/12
100,000
31/12/16
16p
100,000
31/12/12
1,000,000
31/12/15
250,000
31/12/16
1p
15p
1,000,000
31/12/15
250,000
31/12/12
384,615
31/12/15
1p
384,615
31/12/15
500,000
31/12/16
15p
500,000
31/12/12
400,000
31/12/16
300,000
31/12/16
-
-
1,000,000
31/12/15
2,500,000
31/12/16
15p
15p
15p
1p
-
400,000
31/12/12
300,000
31/12/12
200,000
31/12/12
1,000,000
31/12/15
-
-
8,134,615
5,834,615
*** These options were granted during the year to replace options expiring on 31 December 2012.
46
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
17 Long term incentive plan, share options and warrants (continued)
Share options (continued)
Other share options
The following additional options to purchase ordinary shares in the Company have been granted (see also note
20):
Exercisable at 60 pence per share
Exercisable at 15 pence per share
Exercisable at 15 pence per share
Exercisable at 5.5 pence per share
Exercisable at 15 pence per share (see note 3)
Exercisable at 8 pence per share
Exercisable at 1 pence per share (see note 2)
Exercisable at 7 pence per share
Ordinary Shares
31.10.13
3,318,000
-
200,000
201,550
1,000,000
741,875
223,077
325,000
6,009,502
31.10.12
3,318,000
915,000
200,000
201,550
1,000,000
741,875
223,077
-
6,599,502
Expiry date
See note 1
31/12/12
09/03/14
16/02/15
30/06/15
17/08/15
31/12/15
31/12/16
Notes:
1. The expiry date of these options is 90 days after certain valid building licences and permits have been
granted.
2. Granted in exchange for the waiver of fees etc. by current directors and a former director.
3. Granted as part of the consideration for the acquisition of the assets and business of Stewart Travel Centre.
4. Simmons International Limited, is a company in which C W Egleton is a minority shareholder and which
provides Mr Egleton’s services to the Group.
5. During the year
Warrants
The following warrants to subscribe for ordinary shares in the Company have been issued:
Exercisable at 15 pence per share
Exercisable at 8p per share (see note)
Ordinary Shares
31.10.13
-
10,000,000
31.10.12
975,002
-
Expiry date
31/12/12
17/10/17
Note:
Issued in accordance with the terms of the loan facility agreement with Hillside International Holdings Limited
(see also note 20).
47
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
18 Contingent liabilities and commitments
The directors have identified contingent liabilities and commitments totalling £3,902,000 as at 31 October
2013 (31 October 2012: £3,902,000) comprising the following:
Upon contract activation £3,902,000 will become due to the Foundation to meet the balance of the initial
consideration payable in respect of the development site.
Other than stated in notes 19 and 20, the Company has no other capital or operating commitments.
19 Operating lease commitments
The Group has the following total lease commitments in respect of non-cancellable operating leases:
Year ended 31 October 2013
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
-
-
1
1
Year ended 31 October 2012
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
-
-
-
-
Leases expiring in
2 to 5 years
£’000
298
30
15
343
Leases expiring in
2 to 5 years
£’000
154
53
26
233
Over 5 years
£’000
905
-
-
905
Over 5 years
£’000
1,247
-
-
1,247
20 Events after the balance sheet date
Total
£’000
1,203
30
16
1,249
Total
£’000
1,401
53
26
1,480
1. On 27 November 2013, and in accordance with the terms of the loan facility agreement with Hillside
International Holdings Limited, the Company issued 5,000,000 warrants to subscribe for Ordinary Shares
of 1p each in the Company at 8 pence per share. The expiry date for these warrants is 27 November
2017.
2. On 18 December 2013, the Company announced that it had issued a total of 3,809,000 new Ordinary Shares
of 1p each (“Ordinary Shares”) at 10 pence per share to settle outstanding directors’ fees of £236,000 and
amounts due to third party service providers and consultants. Included in the above were 1,935,000
Ordinary Shares issued to Simmons International Limited.
48
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
20 Events after the balance sheet date (continued)
On the same day, the Company also announced that it had granted the following options in lieu of
outstanding directors’ fees in the amount of £463,000:
Exercise price
Ordinary Shares Exercisable between
B D Bartman
G D Cook
T R C Hill
D C Wilson
W C Cole (director of
Loyalward Limited)
B Cassidy (director of
John Semple Travel
Limited)
1p
1p
1p
1p
1p
1p
850,000 18 Dec 2013 and 31 Dec 2016
377,778 18 Dec 2013 and 31 Dec 2016
1,233,333 18 Dec 2013 and 31 Dec 2016
850,000 18 Dec 2013 and 31 Dec 2016
1,711,111 18 Dec 2013 and 31 Dec 2016
122,222 18 Dec 2013 and 31 Dec 2016
Finally, on the same day, the Company also announced that it had granted options in order to satisfy certain
existing commitments to third party consultants as follows:
Ordinary Shares Exercise price
2,500,000
250,000
8p
10p
Exercisable between
18 Dec 2013 and 31 Dec 2016
18 Dec 2013 and 31 Dec 2016
3. On 23 December 2013, the Company announced the issue of 750,000 new Ordinary Shares of 1p each
(“Ordinary Shares”). The Ordinary Shares were issued fully paid up at 7.5 pence per share in order to settle
£56,250 of the loan note issued in respect of the acquisition of Stewart Travel Centre.
4. On 5 February 2014, in accordance with the terms of the loan facility agreement with Hillside
International Holdings Limited, the Company issued 10,000,000 warrants to subscribe for Ordinary Shares
of 1p each in the Company at 8 pence per share. The expiry date for these warrants is 5 February
2018.
5. On 11 February 2014, in accordance with the terms of the financial joint venture agreement with The
Candia Investment Corporation dated 20 June 2012, the Company granted options to purchase up to 4
million Ordinary Shares of 1p each in the Company at 8 pence per share. The expiry date for these options
is 30 September 2015.
6. On 12 February 2014, the Company announced that it had bought in the 20% non-controlling interest in its
travel and leisure business for a consideration of £930,000.
On the same day, the Company announced that The Candia Investment Corporation, and third parties
syndicated into its interest, now have a 5% economic interest in the project in Crete for a consideration of £1
million.
49
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2013
20 Events after the balance sheet date (continued)
7. On 17 March 2014, the Company announced that it had agreed to acquire the trade and assets of Martin
Singer Travel Limited for an initial cash consideration of £250,000 and a deferred cash consideration based
on the first year’s profitability post acquisition, subject to a maximum of £500,000.
Subject to confirmatory due diligence, the acquisition, which is expected to be earnings enhancing, is to be
completed by 31 May 2014.
50