Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2014
Company registration no: 3770602
Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2014
Contents
Directors and Advisers
Chairman’s Statement
Strategic Report
Directors’ Report
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow Statement
Note to the Consolidated Cash Flow Statement
Company Cash Flow Statement
Note to the Company Cash Flow Statement
Notes to the Financial Statements
1
2-3
4-5
6-7
8-9
10
11
12
13
14
15
16
17
18
19-47
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
Substantial progress has been made in both of the Group’s divisions during the year under review, the major
benefits of which will be felt in the current year.
In Greece, the focus has been on the preparatory work for the Presidential Decree in respect of the Group’s
project in Crete (the “Project”). This successfully resulted in the recent announcement that the Plenum of the
Greek Council of State has unanimously approved its terms. It now only remains for the Presidential Decree to
be signed by the relevant Ministers and, finally, the President of the Greek Republic.
In the Travel and Leisure business, the increase in trading margins during the year is a very good illustration of
the benefits of synergies that are beginning to emerge following brand integration, which we anticipate will
accelerate in the current year
The increase has been reflected in the Group’s annual results, with the loss before taxation reducing from
£1,182,000 to £1,036,000 despite an increase of £253,000 in the charge in respect of share-based payments.
Greece
Work on the Project has continued. Discussions with joint venture partners and other interested parties have
been ongoing and, although necessarily complex, these are expected to accelerate following the issuance of the
Presidential Decree.
The recent change of Government in Greece has, as shareholders will have expected, caused a delay in the
timetable but the announcement of the favourable decision of the Council of State indicates that Government
business is ongoing.
With regard to the macro economic situation in Greece, it is not entirely clear what the future holds. In this
context it is worth repeating that the new Greek Government has stated that it wishes to support the tourism
industry as a major part of the Greek economy.
In the meantime, notwithstanding the economic crisis, work has continued on Sitia International airport where
building works and the baggage handling facilities for the new International Terminal are complete. The
terminal will be open for the summer season when an increased number of flights is expected. The new airport
will have a positive long-term impact on the local tourist industry.
Travel and Leisure (“T&L”)
The T&L Division has had a good year although this is not immediately obvious from a comparison of gross
revenue. In April 2013, for regulatory purposes, the Group commenced the settlement of its travel business
through the Hays Independence Group, which has resulted in a change in the way total transaction value,
revenue and cost of sales are reported. The Group has also continued its policy of reducing the sale of lower
margin travel products. The combination of both these factors means that the year on year figures are not
comparable. Given this, the best figure to focus on is gross profit, which remains comparable and has increased
by approximately 10% from £5,196,000 to £5,680,000.
2
Minoan Group Plc
Chairman’s Statement (continued)
Travel and Leisure (“T&L”) (continued)
With regard to the current year, in a market generally reported in the trade as flat, Stewart Travel is enjoying
the best start to the year in its history. All subdivisions are showing healthy rises in both revenue and gross
profit. From the beginning of the new financial year total transaction value and gross profit are cumulatively
ahead year-on-year in excess of 15%.
Finally, since the year end new travel bureaux have been opened in Nottingham and Belfast.
Outlook
The Board believes that the Group is now well-positioned to reap the benefits of the hard work of recent years.
In Greece we are awaiting the issuance of the Presidential Decree in respect of the Project and, as stated above,
the Group’s travel business is enjoying the best start to a trading year in its history.
Conclusion
The coming months promise to be very exciting for the Group, its shareholders, Directors and staff and I look
forward to making further announcements in the near future.
Christopher W Egleton
Chairman
30 March 2015
3
Minoan Group Plc
Strategic Report
The directors present their Strategic Report and the audited consolidated financial statements for the year
ended 31 October 2014.
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. Whilst
total transaction value has decreased slightly from £51,164,000 to £50,757,000, gross profit has increased to
from £5,196,000 to £5,680,000. This reflects the successful implementation of the Group’s strategy of
changing its business mix to concentrate on more profitable products.
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, detailed 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.
Going concern
The Board is confident that the value of the Group’s asset in Crete, combined with its capital raising ability and
the future prospects 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 described in more detail in note 1).
Certain costs in respect of the Project, which were reallocated to non-current assets in a prior year, were
transferred to inventories during the year ended 31 October 2013. Although its long term commitment to the
Project remains unchanged, the directors 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 was decided that the costs referred to above, previously 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.
4
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 (i.e. natural, human, social,
manufactured and financial) 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.
In conducting its travel business the Group ensures that it is compliant with all appropriate regulations,
including those applicable to the protection of clients’ funds. In addition, the Group ensures, as far as possible,
that only reputable providers of holiday products are dealt with.
Approved by the Board of Directors and signed by order of the Board.
C W Egleton
Director
30 March 2015
5
Minoan Group Plc
Directors’ Report
The directors present their annual report for the year ended 31 October 2014.
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 £1,036,000 (31 October 2013: £1,150,000). The loss also
includes a charge in respect of share-based payments (note 17) in the amount of £639,000 (31 October 2013:
£386,000). This charge does not involve any cash payment.
No dividend is proposed for the year (31 October 2013: Nil).
A review of the Group’s business appears in the Chairman’s Statement on page 2 and the Strategic Report on
page 4.
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.
6
Minoan Group Plc
Directors’ Report (continued)
Statement of directors’ responsibilities (continued)
The directors are responsible for the maintenance and integrity of the Group website, 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, as referred to on page 1, 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
30 March 2015
7
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 2014 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 2014 and of the Group’s loss for the year then ended.
8
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. This is, in
turn, 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 matter 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.
David James (Senior Statutory Auditor)
for and on behalf of CHANTREY VELLACOTT DFK LLP
Chartered Accountants and Statutory Auditor
LONDON
30 March 2015
9
Minoan Group Plc
Consolidated Statement of Comprehensive Income
Year ended 31 October 2014
Total transaction value
Revenue
Cost of sales
Gross profit
Notes to
the
Financial
Statements
2014
2013
£’000
£’000
50,757
51,164
5,932
(252)
5,680
9,217
(4,021)
5,196
Operating expenses
(5,306)
(5,416)
Other operating expenses:
Corporate development costs
Charge in respect of share-based payments
17
Operating loss
Finance costs
Loss before taxation
Taxation
Loss after taxation
3
5
Profit for year attributable to non-controlling
interest
Loss for year attributable to equity holders of the
Company
Loss per share attributable to equity holders of
(501)
(639)
(766)
(270)
(1,036)
-
(1,036)
(457)
(386)
(1,063)
(119)
(1,182)
32
(1,150)
-
22
(1,036)
(1,172)
the Company: Basic and diluted
6
(0.61)p
(0.78)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 19 to 47 form part of these financial statements.
10
Minoan Group Plc
Statements of Changes in Equity
Year ended 31 October 2014
Consolidated
Year ended 31 October 2014
Balance at 1 November 2013
Loss for the year
Issue of ordinary shares at a
premium
Acquisition of non-controlling
interest
Share-based payments:
Current year charges
Settlement of liabilities
Balance at 31 October 2014
Share
capital
£’000
14,693
-
Share
premium
£’000
28,781
-
£’000
9,349
-
(11,997) 919 41,745
(1,036)
(1,036)
Retained
Merger
reserve
earnings
£’000
Non-controlling
£’000
£’000
interest
Total
equity
150
1,480
- - - 1,630
-
-
-
- (919) (919)
-
-
14,843
-
-
30,261
- 639
- 439
9,349 (11,955)
- 639
- 439
- 42,498
Year ended 31 October 2013
Balance at 1 November 2012
(Loss)/profit for the year
Issue of ordinary shares at a
premium
Disposal of non-controlling
interest
Share-based payments
Balance at 31 October 2013
Share
capital
£’000
14,541
-
Retained
Merger
Share
reserve
earnings
premium
£’000
£’000
£’000
28,349 9,349 (11,084)
(1,172)
Non-controlling
22
£’000
- 41,155
(1,150)
interest
Total
-
-
equity
£’000
152
432
-
- - 584
-
-
14,693
-
-
28,781
-
- 386 -
(127) 897
770
386
919 41,745
9,349 (11,997)
11
Minoan Group Plc
Statements of Changes in Equity (continued)
Year ended 31 October 2014
Company
Year ended 31 October 2014
Balance at 1 November 2013
Loss for the year
Issue of ordinary shares at a
premium
Share-based payments charge:
Current year charges
Settlement of liabilities
Balance at 31 October 2014
Year ended 31 October 2013
Balance at 1 November 2012
Loss for the year
Issue of ordinary shares at a
premium
Share-based payments
Balance at 31 October 2013
Share
capital
£’000
14,693
-
150
Total
Retained
Share
earnings
equity
premium
£’000
£’000
£’000
28,781 2,673 46,147
- (1,074) (1,074)
1,480 -
1,630
-
-
14,843
-
-
30,261
639
439
2,677
639
439
47,781
Share
capital
£’000
14,541
-
Retained
earnings
Share
premium
£’000
28,349 3,060
£’000
equity
£’000
45,950
- (773) (773)
Total
152
-
14,693
432 - 584
- 386
386
28,781 2,673 46,147
12
Minoan Group Plc
Consolidated Balance Sheet as at 31 October 2014
Notes to
the
Financial
Statements
2014
£’000
2013
£’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
9,414
717
10,131
40,042
1,592
127
41,761
8,678
719
9,397
38,367
896
271
39,534
51,892
48,931
14,843
30,261
9,349
(11,955)
42,498
-
42,498
3,500
5,894
9,394
14,693
28,781
9,349
(11,997)
40,826
919
41,745
1,159
6,027
7,186
Total equity and liabilities
51,892
48,931
The financial statements on pages 10 to 47 were approved and authorised for issue by the Board of Directors
on 30 March 2015.
Signed on behalf of the Board of Directors
C W Egleton
Director
13
Minoan Group Plc
Company Balance Sheet as at 31 October 2014
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
2014
£’000
2013
£’000
9
11
14
12
12
27,366
27,366
26,763
1
26,764
26,436
26,436
23,416
35
23,451
54,130
49,887
14,843
30,261
2,677
47,781
3,500
2,849
6,349
14,693
28,781
2,673
46,147
1,100
2,640
3,740
Total equity and liabilities
54,130
49,887
Company registration number: 3770602
The financial statements on pages 10 to 47 were approved and authorised for issue by the Board of Directors
on 31 March 2015.
Signed on behalf of the Board of Directors
C W Egleton
Director
14
Minoan Group Plc
Consolidated Cash Flow Statement
Year ended 31 October 2014
Note to the
Consolidated
Cash Flow
Statement
2014
£’000
2013
£’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
Purchase of property, plant and equipment
Purchase of intangible assets
Non cash movement in intangible assets
Acquisition of shares in subsidiary company
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
(2,138)
(270)
(2,408)
(122)
(713)
(153)
(430)
(1,418)
667
3,081
-
(66)
Net cash generated from financing activities
3,682
(1,887)
(119)
(2,006)
(371)
(315)
(179)
-
(865)
-
1,760
770
(45)
2,485
Net decrease in cash
(144)
(386)
Cash at beginning of year
Cash at end of year
271
127
657
271
15
Minoan Group Plc
Note to the Consolidated Cash Flow Statement
Year ended 31 October 2014
1 Cash flows from operating activities
2014
£’000
2013
£’000
(1,036)
(1,182)
270
102
130
-
Loss before taxation
Finance costs
Depreciation
Amortisation
Loss on disposal of property, plant and equipment
Exchange loss/(gain) relevant to property, plant and equipment
22
Increase in inventories
Share-based payments
(Increase)/decrease in receivables
Decrease in current liabilities
Non cash movement in non-current assets
Non cash movement in inventories
Non cash movement in equity
Net cash outflow from continuing operations
(1,675)
1,078
(696)
(126)
-
-
(207)
(2,138)
119
124
45
102
(11)
(1,291)
386
175
(278)
20,313
(20,313)
(76)
(1,887)
16
Minoan Group Plc
Company Cash Flow Statement
Year ended 31 October 2014
Note to the
Company
Cash Flow
Statement
2014
£’000
2013
£’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
Acquisition of shares in subsidiary company
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 (decrease)/increase in cash
Cash at beginning of year
Cash at end of year
(3,130)
(222)
(3,352)
(430)
(430)
667
3,081
3,748
(34)
35
1
(1,611)
(119)
(1,730)
-
-
-
1,760
1,760
30
5
35
17
Minoan Group Plc
Note to the Company Cash Flow Statement
Year ended 31 October 2014
1 Cash flows from operating activities
Loss before taxation
Finance costs
Share-based payments
Increase in receivables
Increase/(decrease) in current liabilities
Non cash movement in investments
Non cash movement in equity
Net cash outflow from continuing operations
2014
£’000
2013
£’000
(1,074)
222
1,078
(3,347)
209
-
(218)
(3,130)
(773)
119
386
(694)
(73)
(500)
(76)
(1,611)
18
Minoan Group Plc
Notes to the Financial Statements
Year ended 31 October 2014
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.
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 2014 was £1,074,000
(31 October 2013: £773,000).
Adoption of new and revised Standards
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
IFRS 9
IFRS 14
IFRS 15
Title
Financial instruments
Regulatory deferral accounts
Revenue from contracts with customers
Effective date
1 January 2018
1 January 2016
1 January 2017
The directors anticipate that the adoption of these standards in future periods will have no material impact on
the financial statements of the Group.
Going concern
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 business. In particular, the directors have
reviewed the matters referred to below.
A Plenum of the Greek Council of State, the highest court in Greece, has unanimously approved the draft
presidential decree in respect of the Project with no dissenting opinions. The draft presidential decree approves
the development plan and the strategic environmental impact study. The presidential decree now goes to the
relevant Ministers and the President of the Greek Republic for signing.
Accordingly, the directors consider it relevant that having completed financial joint venture agreements (see
note 12) prior to the above, and any other consents, they will conclude further Project joint venture agreements
in the near term. In addition, the directors are considering other options which would have a major beneficial
impact on the Group’s resources.
19
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
1 Accounting policies (continued)
Going concern (continued)
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.
With a number of acquisitions in the planned expansion of its Travel and Leisure business having been
completed over period of time, 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 consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its
subsidiaries as at 31 October 2014 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 inventories below), and
continuing to recognise goodwill relating to the Project, the directors are of the opinion that the
Project will be brought to fruition and that the carrying value of inventories and goodwill is
recoverable.
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 inventories.
20
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
1 Accounting policies (continued)
Goodwill (continued)
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 re-assessed the treatment of this asset in the
year ended 31 October 2013 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 decided that the costs in respect of
the Project previously shown in non-current assets should be shown as a current asset as at 31 October 2013.
As a result, these costs were 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
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 their market values.
21
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
1 Accounting policies (continued)
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 in subsidiaries are stated at cost less any impairment deemed necessary.
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.
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.
Where the Group provides management or consultancy services, the value of such services is included in
revenue and is recognised in the period in which these services are provided.
22
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
1 Accounting policies (continued)
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 and warrants to purchase Ordinary Shares of 1p each
. A charge has
been made in the consolidated statement of comprehensive income in respect of the LTIP, options and warrants
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.
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.
23
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
1 Accounting policies (continued)
Taxation (continued)
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 2014
Fees
Sums charged by third parties for
directors’ services
Share-based payments (note 17)
Salaries waived in lieu of grant of options -
net of share based payment charge (see
below)
Year ended 31 October 2013
Fees
Sums charged by third parties for
directors’ services
Share-based payments (note 17)
Costs taken to
the consolidated
statement of
comprehensive
income
Costs taken to
inventories
£’000
£’000
297
345
-
-
642
241
362
-
603
353
36
108
(24)
473
460
60
378
898
Total
£’000
650
381
108
(24)
1,115
701
422
378
1,501
24
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
2 Information regarding directors and employees (continued)
Directors’ and key management remuneration (continued)
During the year outstanding fees of £236,000 due to the suppliers of directors’ services, were settled by the
issue of Ordinary Shares of 1p each in the Company issued at a price 10 pence per share. The outstanding fees
settled in shares include £194,000 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 certain directors within the Group waived a total of £463,000 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 the year by
£24,000 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:
2014
2013
Fees/Sums charged
by third parties
Share-based
payments
Fees/Sums
charged by third
parties
Share-based
payments
£’000
£’000
£’000
£’000
296
250
37
25
99
707
60
31
5
-
6
102
311
250
60
25
36
682
151
161
16
6
20
354
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.
25
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
2 Information regarding directors and employees (continued)
Staff costs during the period (including directors and key management)
Costs taken to
the consolidated
statement of
comprehensive
income
Total
Costs taken to
inventories
£’000 £’000 £’000
Year ended 31 October 2014
Salaries and fees
Salaries waived in lieu of grant of options -
net of share-based payment charge
Social security cost
Share-based payments (note 17)
Year ended 31 October 2013
Salaries and fees
Social security cost
Pension cost
Share-based payments (note 17)
343
-
75
-
418
285
41
-
-
326
3,109
(24)
305
108
3,498
2,966
253
3
378
3,452
(24)
380
108
3,916
3,251
294
3
378
3,600 3,926
Staff costs exclude sums charged by third parties for directors’ services.
Monthly average number of persons employed
Directors
Sales and administration
2014
2013
No.
No.
5
170
5
161
26
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
3 Loss before taxation
The loss before taxation is stated after charging:
Depreciation
Amortisation
Loss on disposal of property, plant and equipment
Operating leases
Auditor’s remuneration:
Audit fees
Tax services
2014
£’000
2013
£’000
102
130
-
49
58
5
124
45
102
69
55
5
Audit fees in respect of the Company were £17,000 (31 October 2013: £15,000). Tax services fees in respect of
the Company were £1,250 (31 October 2013: £1,250).
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.
27
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
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
Charge in respect of share-based payments
Operating (loss)/profit
Contribution to central costs
Finance costs
(Loss)/profit before taxation
Taxation
(Loss)/profit after taxation
Operating expenses include:
Depreciation and amortisation
Operating leases - plant and equipment
Assets/liabilities
Goodwill
Other non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
2014
Luxury
Resorts
Travel and
Leisure
£’000 £’000
Corporate
Development
£’000
-
50,757
-
Total
£’000
50,757
-
-
-
5,932
(252)
5,680
-
-
-
5,932
(252)
5,680
(428) (4,878)
(428)
(639)
802
-
(1,067) 802
300
(222)
(989) 454
(300)
(48)
(501)
(501)
-
(501)
-
-
(501)
-
(989)
- -
454
(501)
(5,807)
(127)
(639)
(766)
-
(270)
(1,036)
-
(1,036)
1 231
-
49
-
-
232
49
6,127
146
40,457
46,730
-
2,451
-
1,407
1,304
-
5,162 -
8,578
1,553
41,761
51,892
3,500
4,862
8,362
-
1,032
1,032
-
-
-
3,500
5,894
9,394
28
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
4 Segmented information (continued)
Total transaction value
Revenue
Cost of sales
Gross profit
Operating expenses
Non-recurring expenses
Charge in respect of share-based payments
Operating (loss)/profit
Contribution to central costs
Finance costs
(Loss)/profit before taxation
Taxation
(Loss)/profit after taxation
Operating expenses include:
Depreciation and amortisation
Operating leases - plant and equipment
Assets/liabilities
Goodwill
Other non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
2013
Luxury
Resorts
Travel and
Leisure
£’000 £’000
-
51,164
Corporate
Development
£’000
-
Total
£’000
51,164
9,217
- (4,021)
- 5,196
(4,592)
604
(569)
(569)
-
(386)
(955) 349
(255)
-
150
(119)
(924)
(150)
-
199
- 32
(924) 231
9,217
- (4,021)
- 5,196
(457)
(457)
-
-
(457)
-
-
(457)
(5,618)
(422)
(255)
(386)
(1,063)
-
(119)
(1,182)
- 32
(457)
(1,150)
15 154
-
69
- 169
-
69
6,127
165
38,627
44,919
2,048
1,057
907
4,012
1,100
5,739
6,839
59
288
347
- 8,175
-
-
-
1,222
39,534
48,931
-
-
-
1,159
6,027
7,186
29
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
5 Taxation
Consolidated
(a) Analysis of taxation for the year
UK corporation tax
(b) Factors affecting taxation for the year
Loss before taxation
2014
£’000
-
2014
£’000
(1,036)
2013
£’000
(32)
2013
£’000
(1,182)
Tax on ordinary activities multiplied by the UK corporation tax
rate of 21.83% (2013: 23.4%)
(226)
(277)
Effects of:
Expenses not deductible for tax purposes
Other timing differences
Adjustment to tax charge in respect of previous periods
Decrease in tax losses
Taxation (credit)/charge for the year
Taxation losses carried forward appear in note 13.
6 Loss per share
143
(61)
-
144
-
96
(12)
(23)
184
(32)
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 2014 was 168,636,782 (31 October 2013: 150,942,792).
30
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
7 Intangible assets
Consolidated
2014
2013
Goodwill
IT Projects
£’000
£’000
Total
£’000
Goodwill
IT Projects
£’000
£’000
Cost
At beginning of year
Additions
At end of year
8,175
403
8,578
548
463
8,723
866
1,011
9,589
7,996
179
8,175
233
315
548
Accumulated amortisation
At beginning of year
- 45
-
-
130
175
45
130
175
-
-
- 45
- 45
Total
£’000
8,229
494
8,723
-
45
45
8,175
8,578
503
836
8,678
9,414
7,996
8,175
233
503
8,229
8,678
The additions to Goodwill during the year mainly reflect the acquisition of the trade and assets of Martin
Singer Travel.
The directors have assessed the recoverable amount of the Project as being greater than the combined carrying
value of the goodwill and inventories of £43,615,000 at 31 October 2014 (see also note 1 above).
31
Provided in year
At end of year
Net book value
At beginning of year
At end of year
Freehold
property, land
and acquisition
costs
Furniture,
fittings, plant
and
equipment
Motor
vehicles
Leasehold
improvements
£’000
£’000
£’000
£’000
Total
£’000
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
8 Property, plant and equipment
Year ended 31 October 2014
Consolidated
Cost
At 1 November 2013
Exchange adjustments
Disposals
Additions
At 31 October 2014
Accumulated depreciation
At 1 November 2013
Disposals
Provided in year
At 31 October 2014
Net book value
196
1,040
(16) (5)
-
-
180
49
-
(2)
47
(6)
38
1,067
611
(5)
89
695
At 31 October 2014
133
372
16
(1)
(15)
-
-
16
(16)
-
-
-
143
1,395
-
-
84
227
-
-
15
15
(22)
(21)
122
1,474
676
(21)
102
757
212
717
32
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
8 Property, plant and equipment (continued)
Year ended 31 October 2013
Freehold
property, land
and acquisition
costs
Furniture,
fittings, plant
and
equipment
Motor
vehicles
Leasehold
improvements
£’000
£’000
£’000
£’000
The
Project
£’000
Consolidated
Cost
At 1 November 2012
20,313
185
800
Exchange adjustments
-
Transfer to inventories
(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 2014
9 Investments
Company
Year ended 31 October 2014
Cost
At 1 November 2013
Additions
At 31 October 2014
Impairment
At 31 October 2014
Shares in
subsidiaries
£’000
26,436
930
27,366
-
-
Net book value at 31 October 2014
27,366
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
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.
34
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
9 Investments (continued)
Interests in subsidiaries (continued)
Stewart Travel Limited - A company incorporated in Scotland operating as a multi-faceted travel distributor.
During the year ended 31 October 2013 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. The excess of the value of net assets over the initial consideration was charged against
equity. During the current year the 20% shareholding in Stewart Travel Limited was re-acquired by Minoan
Group Plc for a consideration of £930,000.
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
2014
%
84.5
6.4
9.1
-
100.0
2013
%
64.5
6.4
9.1
20.0
100.0
King World Travel Limited (100%) - A company incorporated in Scotland operating as a retail travel agent.
During the year ended 31 October 2013 the trade and assets of King World Travel Limited were acquired by
Stewart Travel Limited in exchange for shares in that company.
John Semple Travel Limited (100%) - A company incorporated in Scotland operating as a multi-faceted retail
and online travel agent. During the year ended 31 October 2013 the trade and assets of John Semple Travel
Limited were acquired by Stewart Travel Limited partly in exchange for shares in that company.
10 Inventories
Consolidated
Inventories at 31 October 2014 amounted to £40,042,000 (31 October 2013: £38,367,000), 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.
35
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
11 Receivables
Consolidated
Trade receivables
Other receivables and prepayments
Value added tax recoverable
2014
£’000
420
1,106
66
1,592
2013
£’000
266
559
71
896
Trade receivables are due in 30 days. Of the above £71,000 (31 October 2013: £36,000) was outstanding for
more than 30 days. No provision is considered necessary in respect of irrecoverable amounts.
Company
Amounts owed by subsidiary companies (see note 16)
Value added tax recoverable
Amounts owed by subsidiary companies are repayable on demand.
12 Liabilities
Non-current liabilities (see note 15)
Consolidated
Loans repayable after one year
Hire purchase
Non-current liabilities
Company
Loans repayable after one year
2014
£’000
26,749
14
26,763
2014
£’000
3,500
-
3,500
2014
£’000
3,500
2013
£’000
23,399
17
23,416
2013
£’000
1,100
59
1,159
2013
£’000
1,100
£3,500,000 has been drawn down under the terms of the loan facility agreement with Hillside International
Holdings Limited (“Hillside”) (31 October 2013: £1,000,000). 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.
36
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
12 Liabilities (continued)
Current liabilities
Consolidated
Trade and other payables
Deferred revenue
Social security and other taxes
Loans (see note 15)
Hire purchase
Accruals and deferred charges
2014
£’000
1,564
1,000
687
269
59
2,315
5,894
2013
£’000
2,131
670
399
225
66
2,536
6,027
The deferred revenue arises from amounts received under the terms of financial joint venture agreements
between the Company and certain third parties by which these third parties will receive an initial 5% economic
interest in the Project for a total consideration of £1 million.
In accordance with the terms of the joint venture agreements, options to subscribe for up to 4 million Ordinary
Shares at an exercise price of 8p per share were granted during the year. The options are exercisable until 30
September 2015 (see note 17).
Current liabilities
Company
Trade and other payables
Amounts owed to subsidiary companies (see note 16)
Loans (see note 15)
Accruals and deferred charges
2014
£’000
431
1,840
269
309
2,849
2013
£’000
582
1,531
225
302
2,640
Amounts owed to subsidiary companies are interest free and repayable on demand.
37
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
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
2014
£’000
2013
£’000
2014
£’000
2013
£’000
(45)
604
2,018
2,577
(28)
784
1,873
2,629
-
-
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 20% (2013: 20%).
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
2014
£’000
2013
£’000
2014
£’000
2013
£’000
393
328
721
615
243
858
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 20% (2013: 20%).
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.
38
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
14 Share capital
Called up, allotted and fully paid
31 October 2014 - 174,994,836 Ordinary Shares of 1p each
54,148,031 Deferred Shares of 24p each
31 October 2013 - 161,465,704 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)
9,785,580 Ordinary Shares of 1p each (2013: 8,250,000
Ordinary Shares of 1p each)
2014
£’000
1,749
12,996
-
-
14,745
98
14,843
2013
£’000
-
-
1,615
12,996
14,611
82
14,693
Holders of Ordinary Shares have the right to vote and the right to receive dividends. Holders of Deferred
Shares have no right to vote and no right to receive dividends.
During the year, 5,725,000 Ordinary Shares of 1p each were placed at 12 pence per share. Also during the
year, 3,245,132 Ordinary Shares of 1p each were issued at 8.5 pence per share under the terms of loan
agreements and 3,809,000 Ordinary Shares of 1p each were issued at 10 pence per share to settle liabilities. In
addition, 750,000 Ordinary Shares of 1p each were issued at 7.5 pence per share to settle part of the
Convertible Loan Note issued under the terms of the acquisition of Stewart Travel Centre.
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.
39
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
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 2014 the Group had non-current liabilities of £3,500,000 (31 October
2013: £1,159,000).
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 due after one
year
2014
2013
£’000
£’000
1,035
269
3,500
-
660
225
1,100
59
The loans to be settled by the issue of shares, of which £585,000 are to be settled by the issue of shares at 8.5
pence per share and £450,000 are to be settled by the issue of shares at 15.5 pence per share, have been
classified as equity in accordance with IAS 32 (note 14).
During the year a total of £207,000 of loans was settled by the issue of shares at 8.5 pence per share (31
October 2013: £841,000 at prices between 8 pence per share and 10 pence per share) (note 14).
40
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
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 2014 and at 31 October 2013.
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
31.10.14
£’000
31.10.13
£’000
31.10.14
£’000
31.10.13
£’000
296
36
13
37
311
53
(2)
60
98
64
92
60
262
86
79
119
Simmons International Limited
Bizwatch Limited
I.H.M. Industry & Hotel
Management Limited
B D Bartman & Co
During the year Morgan Rossiter Limited, a company of which G D Cook is a director, supplied public
relations services to the Company in the amount of £36,000 (31 October 2013: £25,000). The amount payable
to Morgan Rossiter Limited as at 31 October 2014 is £14,000 (31 October 2013: £10,000).
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.
Receivable/(Payable) as at 31.10.14
£’000
Receivable/(Payable) as at 31.10.13
£’000
Loyalward Limited
Stewart Travel Limited
Loyalward Leisure Plc
26,749
(1,803)
(37)
23,399
(1,494)
(37)
41
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
17 Long term incentive plan, share options and warrants
Share-based payments charge
Year ended 31 October 2014
Share-based payments - directors
Share-based payments - other
Year ended 31 October 2013
Share-based payments - directors
Share-based payments - other
£’000
108
531
639
354
32
386
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.
The performance conditions are as follows:
Performance condition A
Fulfilled during year ended 31 October 2012
Performance condition B
Performance condition C
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
42
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 pricing model are as follows:
Grant date
Share price at grant date
Exercise price
LTIP
4 November 2013
Options/Warrants
17 October 2013 to 7 August
2014
7.38p
9p
6.25p to 12.25p
8p to 13p
Vesting periods
In accordance with performance conditions
Immediately
Expected volatility
LTIP/Option/Warrant life
Expected life
Risk free rate
Expected dividends expressed as
dividend yield
Fair value of options
46.30%
3.5 years
2.5 years
0.81%
nil
1.87p
46.30%
1.5 to 4 years
n/a
0.46% to 1.00%
nil
1.82p to 4.26p
43
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
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 2014
31 October 2013
Exercise
price
Ordinary
Shares
Expiry
date
Exercise
price
Ordinary
Shares
Expiry
date
Options
B D Bartman
B D Bartman (see note
2 below)
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)
W C Cole (director
Loyalward Limited)
(see note 2 below)
G D Cook
G D Cook (see note 2
below)
G D Cook (see note 2
below)
Simmons International
Limited
Simmons International
Limited
Carried forward
7p
1p
1p
7p
7p
1p
1p
7p
1p
1p
7p
7p
200,000
31/12/16
1,000,000
31/12/15
850,000
31/12/16
500,000
31/12/16
100,000
31/12/16
7p
1p
-
7p
7p
200,000 31/12/16
1,000,000
31/12/15
-
-
500,000
31/12/16
100,000
31/12/16
1,000,000
31/12/15
1p
1,000,000
31/12/15
1,711,111
31/12/16
250,000
31/12/16
384,615
31/12/15
377,778
31/12/16
500,000
31/12/16
400,000
31/12/16
-
7p
1p
-
7p
7p
-
-
250,000
31/12/16
384,615
31/12/15
-
-
500,000
31/12/16
400,000
31/12/16
7,273,504
4,334,615
44
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
17 Long term incentive plan, share options and warrants (continued)
Directors’ interests in share options (continued)
31 October 2014
31 October 2013
Exercise
price
Ordinary
Shares
Expiry
date
Exercise
price
Ordinary
Shares
Expiry
date
Options
Brought forward
T R C Hill
T R C Hill (see note 2
below)
D C Wilson (see note 2
below)
D C Wilson (see note 2
below)
D C Wilson (see note 2
below)
B Cassidy (director of
John Semple Travel
Limited) (see note 2
below)
Other share options
7p
1p
1p
1p
1p
1p
7,273,504
4,334,615
300,000
31/12/16
7p
300,000
31/12/16
1,233,333
31/12/16
1,000,000
31/12/15
2,500,000
31/12/16
850,000
31/12/16
122,222
31/12/16
-
1p
1p
-
-
-
-
1,000,000
31/12/15
2,500,000
31/12/16
-
-
-
-
13,279,059
8,134,615
The following additional options to purchase ordinary shares in the Company have been granted:
Exercisable at 60 pence per share
Exercisable at 15 pence per share
Exercisable at 5.5 pence per share (see note 5 below)
Exercisable at 15 pence per share (see note 3 below)
Exercisable at 8 pence per share
Exercisable at 1 pence per share (see note 2 below)
Exercisable at 7 pence per share
Exercisable at 8 pence per share
Exercisable at 10 pence per share
Exercisable at 8 pence per share (see note 4 below)
Ordinary Shares
31.10.14
3,318,000
-
201,550
1,000,000
741,875
223,077
325,000
2,500,000
250,000
4,000,000
12,559,502
31.10.13
3,318,000
200,000
201,550
1,000,000
741,875
223,077
325,000
-
-
-
6,009,502
Expiry date
See note 1
09/03/14
16/02/15
30/06/15
17/08/15
31/12/15
31/12/16
31/12/16
31/12/16
30/09/15
45
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
17 Long term incentive plan, share options and warrants (continued)
Notes re share options:
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. Granted to The Candia Investment Corporation, and third parties syndicated to it, in respect of the financial
joint venture agreements to acquire an economic interest in the Project (see note 12 above).
5. See also note 20.
Warrants
The following warrants to subscribe for ordinary shares in the Company have been issued in accordance with
the terms of the loan facility agreement with Hillside International Holdings Limited:
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 13 pence per share
Ordinary Shares
31.10.14
10,000,000
5,000,000
10,000,000
10,000,000
35,000,000
31.10.13
10,000,000
-
-
-
10,000,000
Expiry date
17/10/17
27/11/17
05/02/18
07/08/18
18 Contingent liabilities and commitments
Other than as stated in notes 10 and 19, the Group has no other capital or operating commitments.
46
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2014
19 Operating lease commitments
The Group has the following total lease commitments in respect of non-cancellable operating leases:
Year ended 31 October 2014
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
9
4
4
17
Year ended 31 October 2013
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
-
-
1
1
Leases expiring in
2 to 5 years
£’000
208
77
10
295
Leases expiring in
2 to 5 years
£’000
298
30
15
343
Over 5 years
£’000
788
-
-
788
Over 5 years
£’000
905
-
-
905
20 Events after the balance sheet date
Total
£’000
1,005
81
14
1,100
Total
£’000
1,203
30
16
1,249
1. On 6 November 2014, subsequently updated on 26 November 2014, the Company announced that it had
agreed to issue three-year unsecured convertible loan notes up to a maximum amount of £1.5 million with a
coupon of 10% per annum. A conversion price of 15.5 pence per share applies to £650,000 of the above
with the balance of £850,000 being converted at 18.0 pence per share.
2. On the 26 November 2014 the Company announced the issue of 100,775 new Ordinary Shares at 5.5 pence
per share in respect of the exercise of Options and a further 101,053 new Ordinary Shares at 14.25 pence per
share to settle certain existing liabilities.
3. On 24 March 2015 the Company announced the issue of 11,011,765 new Ordinary Shares at 8.5 pence per
share to settle loans and a further 100,775 new Ordinary Shares at 5.5 pence per share in respect of the
exercise of Options.
47