Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2017
Company registration no: 3770602
Minoan Group Plc
Report and Financial Statements
Year ended 31 October 2017
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
2-5
6-7
8-9
10-15
16
17
18
19
20
21
22
23
24
25-52
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
30 Crown Place
London
EC2A 4ES
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
Moore Stephens LLP
Chartered Accountants and Statutory Auditor
150 Aldersgate Street
London
EC1A 4AB
1
Minoan Group Plc
Chairman’s Statement
Introduction
My statement will focus on the status of the Group’s project in Greece (the “Project”) and the position of and
prospects for the Group after the intended disposal of its Travel and Leisure (“T&L”) business as announced
on 13 March 2018. I remarked in that announcement that following the sale of T&L your Board expected the
Group to be substantially debt free in relation to its loan obligations and this continues to be the case.
The results for the year ended 31 October 2017 include the trading results of the travel business for the full
year and demonstrate the division’s continuing growth. Nevertheless, the decision to sell the division results
from a number of other factors including, but not limited to, the view of the Board that all efforts must be
concentrated on delivering the value of the Project to shareholders and that this will be much easier to achieve
without a major burden of debt.
In view of the proposed sale of T&L (the impact of which has been to present the division as a Discontinued
Operation within the accounts), the results themselves cannot give a good guide to the Group’s prospects for
the coming period, which I and my colleagues believe will begin to repay the faith shown by all stakeholders in
the future and value of the Project.
Greece
As announced in 2017, we now have un-appealable outline planning consent for a development set on a 6,000
acre plot within a peninsula site with 28 kilometres of coastline on the island of Crete through the Presidential
Decree originally issued on 11 March 2016. The consent is for a “complex resorts” project comprising up to
108,000 square metres of built space split between five main locations which are, and will be, designed in such
a manner that the development will be largely invisible to the casual observer.
It is intended that we, together with major partners both financial and operating, will develop one of the most
environmentally friendly and “soft” major projects in Europe with a build footprint of less than 0.5% of the site
and through this and other criteria create a landmark for tourism in Greece.
The size of site is unusual in a region as crowded as the Eastern Mediterranean. This, combined with the
consent and development intentions, makes the whole “package” extremely rare in a region where low cost
mass tourism has previously been the main driver for development. The area of Crete in which the Project sits
is, however, not just mass tourism as will be seen in some of the well-known “resorts” around the village of
Elounda which is also in the Prefecture of Lasithi, the Easternmost in Crete.
The upgrading of the tourist product supply since the inception of the Project idea has been accompanied by a
steady improvement in the travel infrastructure of the area. The main road along the North Coast running from
the capital, Heraklion to Sitia in the East has been significantly improved and journey times have been reduced
by at least 30 minutes in this period. The completely rebuilt Sitia International airport is fully open and taking
flights to and from various cities in Scandinavia, Germany and the Netherlands.
During this summer season the airport expects an increase in international traffic of over 200%, albeit from a
very low base, with a further major increase looking likely in 2019.
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Minoan Group Plc
Chairman’s Statement (continued)
Greece (continued)
During the past year, one of the major changes that has occurred in Greece has been the increasing activity in
the purchase and sale of tourism based assets including hotels. In the last few months there have been a
number of tourism asset sales where the prices achieved have seen substantial increases over the levels
expected less than six months ago. These sales, which for the most part have been operating assets, have been
driven by the Greek banks which are beginning to make inroads into their non-performing loan portfolios.
Within Athens, which has the largest property market in Greece, the price of residential property has also risen
substantially.
All of the above factors, which have an impact on the value of the Group’s interest in the site and the Project,
are being considered by the Board in their discussions with prospective financial and other partners.
Shareholders will be aware that the last “Opinion of Value” of this interest on a development appraisal basis
was circa €100m given by CBRE in 2011 around the time of the “Fast Track” application, which itself resulted
in the grant of the Presidential Decree.
In light of the rapid and positive changes taking place in the market for tourism assets in Greece, it is very
difficult to be precise as to the sterling value to be placed upon the Group’s interest. The increases in values
which have been, and are being, seen in Greece over the past year or so are driven by the belief that the tourism
industry in Greece will continue its recent expansion. The depreciation of Sterling relative to the Euro has
increased the value potential of the Project in Sterling terms.
As shareholders will be aware from the announcement earlier in March, the Company is continuing to progress
the Project on the ground and has commissioned a number of studies to ensure the most efficient use of
resources pending the conclusion of JV or partnership arrangements with prospective partners and/or investors.
In these, and other potential discussions, it is likely that the Company will have more than one “partner”.
Although, at this stage, it is difficult to predict precisely what kind of relationships will be finalised it is likely
that one or more of the “partners” will be making significant financial contributions. The application of those
“contributions” insofar as creating the optimum value for shareholders will be foremost in the Board’s
consideration as to kind of partnership offer(s) to encourage.
All in all the substantial increase in tourism in Greece in the last two years together with the significant
increase in tourism asset values augurs well for future of the Project, its timing, potential partnerships and the
creation of value for the Company and its shareholders.
Travel and Leisure
As the Board has taken the decision to sell T&L (subject to shareholder approval), as previously stated the
division has been classified as a Discontinued Operation under IFRS 5. The impact of this on the Group’s
income statement is to present revenue and expenses associated with T&L’s operations as a net line item. More
granular information (as referred to in this section) may be found under note 4 Segmental information.
Total transaction value has increased in the period under review by approximately 18% from £68m to £80m
and gross profit shows a year on year increase of £1,302,000 (18%) to £8,346,000 (2016: £7,044,000).
Operating expenses have increased to £7,783,000 (2016: £6,772,000) resulting in an increase in operating
profit to £563,000 (2016: £272,000).
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Minoan Group Plc
Chairman’s Statement (continued)
Travel and Leisure (continued)
Travel trading in the year achieved the above noted increases in particular via our Lapland business, which
once again grew far in excess of the average. Cruise continued its growth as planned, although management
believe that the rate of growth was slowed by difficulties in the Caribbean cruise market following the
devastation to Puerto Rico and a number of destination islands.
Since the year end, travel has continued on its upward trajectory. In the first quarter of the financial year
ending 2018, Total Transaction Value is up 14% and gross profit up close to 9%, the variations in increase
once again being due to Caribbean cruise sales which, until recently, have been among our most profitable.
Shareholders will be aware from my previous statements and other announcements that the decision to dispose
of the travel business has not been taken lightly.
The two main drivers of this decision have been the fact that we were unable to expand the business as fast as
we had intended for fear of diluting the Group’s capital unnecessarily and, with the advent of the grant of
outline planning consent in Greece, the need to concentrate our efforts on creating value without a significant
debt overhang with its concomitant costs.
I very much hope we will be able to report in more detail on this transaction in the near future.
As I have stated previously the Board expects the sale of the division to leave the Group substantially debt free.
Financial Review
In accordance with the relevant Accounting Standard, the Consolidated Statement of Comprehensive Income
presents the revenue and associated expenses of the T&L division as one net item under heading “Profit from
discontinued operations”. This Standard means that once a decision to sell has been reached the business
concerned is treated as a discontinued activity and the detailed results are omitted from the Consolidated
Statement. The details of the growth in total transaction value and gross profit of T&L referred to above are
set out in the Segmental information (Note 4).
Although there has been a reduction in corporate developments costs of £91,000, the operating loss for the year
has increased by £860,000 due to an increase in operating expenses of £91,000, an increase in the charge for
share based payments of £210,000 and, in particular, a non-cash charge of £650,000 in relation to assets held
for sale.
With a reduction in finance costs of £157,000, the reported net loss for the year has increased by £244,000
from £2,272,000 to £2,516,000.
During the year the Group raised a limited amount of new equity (£450,000) and satisfied the bulk of its
financing needs through new loans (£895,000). As already stated the Board believes that following the sale of
the T&L business the Group will be substantially debt free in relation to its loan obligations. It is the Board’s
intention that all indebtedness should be cleared as soon as possible after the sale and to this end other
discussions with investors and potential JV Partners will be accelerated.
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Minoan Group Plc
Chairman’s Statement (continued)
Outlook
It is clear from my earlier comments that, following the sale of T&L, the Group’s sole focus will be on
optimising the value of the Project for shareholders. This is likely to result in a number of changes to the
management structure of the Group about which I will be writing after the sale.
In anticipation of the sale of what is, currently, its only revenue generating division, the Board is examining the
cost structure of the Group in order to keep costs to a minimum during the subsequent period when the
Company will be dependent on the support of its shareholders and other stakeholders before any income
deriving from the Project is forthcoming. The Board are hopeful, and intend, that this period will be kept to a
minimum.
In July last year I said that the next twelve months were likely to be the most rewarding in the Company’s
history. I remain convinced that we are in the most rewarding period in the Company’s history and that 2018
will see major developments.
Conclusion
The past year has been eventful for your Company. We have received the Consent for which we have been
striving for so long although the directors believe that the Company’s share price performance has not fully
reflected this achievement. The decision to dispose of the travel business was a difficult one but both I and the
Board believe it will be in best interest of shareholders going forward. I hope to be making further
announcements in the near future and wish to thank shareholders and all our stakeholders for their patience
pending what I believe will be very welcome news over the coming months.
Christopher W Egleton
Chairman
5 April 2018
5
Minoan Group Plc
Strategic Report
The directors present their Strategic Report and the audited consolidated financial statements for the year
ended 31 October 2017.
Review of business
A review of the Group’s business is given in the Chairman’s Statement on page 2.
The Group has announced its intention to sell the travel business and the results have been presented in
accordance with IFRS 5. The net profit of the travel business for the year of £488,000 is shown as profit from
discontinued operations and the net assets are shown as Non-current assets for sale in the amount of
£6,882,000. Total transaction value has increased to £80,320,000 from £67,820,000. This reflects volume
growth and the Group’s strategy of changing its business mix to concentrate on more profitable products and is
regarded by the directors as the key performance indicator for the travel business.
Although not having used key performance indicators for the Project in the past, the Board is of the opinion
that the granting of un-appealable outline planning consent, as referred to in the Chairman’s Statement may be
regarded as an indicator in understanding the development, performance or position of that operation.
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 which includes, if required, the refinancing of the debt of £5 million
which is repayable on 30 June 2018 (see note 20). 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 now 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.
The sale of the travel business will be subject to the usual financial and commercial risks.
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).
The directors envisage that any joint venture or partnership arrangements will preserve the nature of the
Group’s long term commitment to the Project.
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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
5 April 2018
7
Minoan Group Plc
Directors’ Report
The directors present their annual report for the year ended 31 October 2017.
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 acts as agent
in providing 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 the Companies Act 2006.
The Group made a loss for the year, after taxation, of £2,516,000 (31 October 2016: £2,272,000). The loss also
includes a charge in respect of share-based payments of £186,000 (2016: £24,000 credit) and non-cash finance
cost in respect of warrants issued in association with the Hillside loan in the amount of £459,000 (31 October
2016: £930,000) (see note 17). These charges do not involve any cash payment.
The loss also includes a non-cash charge in relation to assets held for re-sale in the amount of £650,000 (31
October 2016: £Nil).
No dividend is proposed for the year (31 October 2016: Nil).
The Group’s financial instruments and risk management are discussed in note 15.
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.
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Minoan Group Plc
Directors’ Report (continued)
Statement of directors’ responsibilities (continued)
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.
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 throughout the period and at the end thereof, 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 appoint Moore Stephens LLP as the auditor for the ensuing year will be proposed at the Annual
General Meeting.
Approved by the Board of Directors and signed by order of the Board.
C W Egleton
Director
5 April 2018
9
Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
Our opinion
In our opinion:
The financial statements give a true and fair view of the state of the group’s and the parent company’s
affairs as at 31 October 2017 and of the group’s loss for the year the ended;
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 been prepared in accordance with the requirements of the Companies Act
2006.
Financial statements subject to audit
We have audited the consolidated financial statements for the year ended 31 October 2017 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 notes to the financial statements, which include a summary of significant accounting policies and
other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and IFRS as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report below. We are independent of the group in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
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.
10
Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Material uncertainty relating to going concern
We draw attention to the disclosures made in the Strategic Report and in note 1 to the financial statements
concerning the uncertainty regarding the group’s need to refinance the £5m loan from Hillside International
Holdings Limited which falls due for payment on 30 June 2018, together with ability to secure project finance
in order to bring its Crete project to fruition and to continue as a going concern. As stated in these disclosures,
these events and conditions indicate that a material uncertainty exists that may cast doubt on the company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Overview of our audit approach
Key audit matters
Materiality
Revenue recognition within Stewart Travel Limited
Capitalisation and valuation of inventories, being the Crete
project costs.
Overall materiality is £440,000 (2016: £1.31 million)
which represents 1% of the Crete project costs recognised
in the balance sheet.
Overall materiality in the prior year was based on 3% of
net assets.
An overview of the scope of our audit
The group consists of the parent company and its subsidiaries. It largely operates through two trading
subsidiary undertakings which were considered to be significant components for the purposes of the group
financial statements. The financial statements consolidate these entities together with other non-trading
subsidiary undertakings. As part of designing our group audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In establishing our overall approach to the group
audit, we determined the type of work that needed to be performed in respect of each subsidiary or entity. This
consisted of us carrying out a full audit of all significant components of the group.
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 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.
We have designed our audit approach to identify possible fraud in relation to the associated fraud risk of the
group. We consider the most likely areas where fraud might arise to be within the valuation of the project costs
and in relation to incorrect revenue recognition. Our approach to these areas has been addressed within the Key
audit matters section.
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Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Key audit matters
Key audit matters are those matters that, in the auditors' professional judgement, were of most significance in
the audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In
arriving at our opinion, the key audit matters considered were as follows:
Risk 1: Capitalisation and valuation of Crete Project costs
The group inventories, held in respect of the Crete project, represent the most significant asset on the balance
sheet totalling £44.1 million as at 31 October 2017 (2016: £42.6million). There is a risk that inappropriate
expenditure may be capitalised that is not in accordance with IAS 2. Furthermore, given that the Presidential
Decree has been issued granting planning consent and that the Directors appear to be actively marketing the
property, any lack of buyer interest in the property would be an indication of impairment. Therefore, there is a
significant risk over the valuation of these inventories.
In this area, our audit procedures included:
Testing a sample of capitalised costs in the year to ensure accuracy and appropriateness for
capitalisation as project costs under IAS 2;
Reviewing correspondence and other third party documentation in relation to the project to confirm
that the expected value of the project is in excess of the costs to date;
Obtaining and translating the court ruling in July 2017;
Reviewing and assessing the marketing activities for the site post grant of the Presidential Decree;
From the work performed, we did not identify any transactions which indicated that capitalised costs were
incorrectly stated.
Risk 2: Revenue recognition in Stewart Travel Limited
The overall group revenue for the year ended 31 October 2017 totalled £8.7 million (2016: £7.3 million) which
is specifically in relation to the Travel and Leisure segment of the group, being Stewart Travel Limited. Given
management’s intention to dispose of this segment of the business, this has been presented within ‘Profit from
discontinued operations’ in line with IFRS 5. We have identified that there is a risk that revenue could be both
materially overstated and understated through incorrect revenue recognition treatment, which could have a
material effect on the discontinued profit amount given the significance of revenue within the group.
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Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Key audit matters (continued)
In this area, our audit procedures included:
Sampling transactions from statements and invoices through to the nominal ledger to verify
completeness of income;
Ensuring no material cut off errors were present through review of post year end receipts and sales;
and
Reconciling income from monthly statements through to the trial balance for the company’s main
customer.
From the work performed, we did not identify any instances from which to conclude that revenue is materially
misstated.
Our application of materiality
We set certain thresholds for materiality. These help us to establish transactions and misstatements that are
significant to the financial statements as a whole, to determine the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually on balances and on the financial
statements as a whole.
We determined the materiality for the group financial statements as a whole to be £440,000, calculated with
reference to a benchmark of the Crete project costs (£44. 1 million), of which it represents approximately 1%.
This is the threshold above which missing or incorrect information in the financial statements is considered to
have an impact on the decision making of users. We determined the materiality for the company as a whole to
be £115,000, calculated with reference to a benchmark of total company expenses, of which it represents 5%.
We reported to the Audit and Risk Committee all potential adjustments in excess of £22,000, being 5% of
group materiality for the financial statements as a whole.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of the other information, we
are required to report that fact.
We have nothing to report in this regard.
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Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of
the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, set out on pages 7 and 8, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted
it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
in accordance with ISAs (UK) will always detect a material misstatement when
14
Minoan Group Plc
Independent Auditor’s Report to the members of Minoan Group Plc
(continued)
Auditor’s responsibility for the audit of the financial statements (continued)
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Paul Clark, Senior Statutory Auditor
For and on behalf of MOORE STEPHENS LLP
Chartered Accountants and Statutory Auditor
LONDON
EC1A 4AB
5 April 2018
15
Minoan Group Plc
Consolidated Statement of Comprehensive Income
Year ended 31 October 2017
Revenue
Cost of sales
Gross profit
Notes to
the
Financial
Statements
4
2017
2016
£’000
£’000
-
-
-
-
-
-
Operating expenses
(480)
(389)
Other operating expenses:
Corporate development costs
Charge related to assets held for sale
(Charge)/credit in respect of share-based payments
17
Operating loss
Finance costs
Profit from discontinued operations
Loss before taxation
Taxation
Loss after taxation
Loss for year attributable to equity holders of the
Company
Loss per share attributable to equity holders of
the Company: Basic and diluted
(504)
(650)
(186)
(1,820)
(595)
-
24
(960)
17
(1,184)
(1,341)
4
3
5
6
488
29
(2,516)
(2,272)
-
(2,516)
-
(2,272)
(2,516)
(2,272)
(1.23)p
(1.19)p
The notes on pages 25 to 52 form part of these financial statements.
16
Minoan Group Plc
Consolidated Statement of Changes in Equity
Year ended 31 October 2017
Year ended 31 October 2017
Share
capital
£’000
Share
premium
£’000
Merger
reserve
Warrant
Reserve
£’000
£’000
Retained
earnings
Total
equity
£’000
£’000
Balance at 1 November 2016
15,119
32,585
9,349
2,119
(16,127) 43,045
Loss for the year
-
-
Issue of ordinary shares at a premium
Share based payments
Extension of warrant expiry date (see
note 17)
178 1,074
-
-
-
-
-
-
-
-
-
(2,516)
(2,516)
- -
186
-
1,252
186
322
-
322
Balance at 31 October 2017
15,297 33,659
9,349 2,441
(18,457)
42,289
Year ended 31 October 2016
Share capital
£’000
Share
premium
£’000
Merger
reserve
Warrant
Reserve
£’000
£’000
Retained
earnings
Total
equity
£’000
£’000
Balance at 1 November 2015
14,975
31,435
9,349
1,904
(13,831) 43,832
Loss for the year
-
-
Issue of ordinary shares at a premium
Share based payments
Extension of warrant expiry date (see
note 17)
144
-
1,150
-
-
-
-
-
-
-
-
(2,272)
(2,272)
- -
(24)
-
1,294
(24)
215
-
215
Balance at 31 October 2016
15,119
32,585
9,349 2,119
(16,127) 43,045
17
Minoan Group Plc
Company Statement of Changes in Equity
Year ended 31 October 2017
Year ended 31 October 2017
Balance at 1 November 2016
Loss for the year
Issue of ordinary shares at a
premium
Share-based payments
Extension of warrant expiry date
(see note 17)
Share
capital
£’000
15,119
-
Share
premium
£’000
Warrant
Reserve
£’000
Retained
earnings
Total
equity
£’000
£’000
32,585
-
2,119 2,203
52,026
(2,255) (2,255)
-
178
1,074
-
-
186
1,252
186
-
-
322
- 322
Balance at 31 October 2017
15,297 33,659
2,441
51,531
134
Year ended 31 October 2016
Balance at 1 November 2015
Loss for the year
Issue of ordinary shares at a
premium
Share-based payments
Extension of warrant expiry date
(see note 17)
Share
capital
£’000
14,975
-
31,435
-
1,904 3,746
52,060
(1,519) (1,519)
144
1,150
-
(24)
1,294
(24)
-
-
-
-
215
- 215
Share
premium
£’000
Warrant
Reserve
£’000
Retained
earnings
Total
equity
£’000
£’000
Balance at 31 October 2016
15,119 32,585
2,119
2,203 52,026
18
Minoan Group Plc
Consolidated Balance Sheet as at 31 October 2017
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Non-current assets held for sale
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
Warrant reserve
Retained earnings
Total equity
Liabilities
Current liabilities
Notes to
the
Financial
Statements
2017
£’000
2016
£’000
7
8
4
10
11
14
3,583
161
6,882
10,626
44,163
326
21
44,510
9,771
728
-
10,499
42,562
2,610
104
45,276
55,136
55,775
15,297
33,659
9,349
2,441
(18,457)
42,289
15,119
32,585
9,349
2,119
(16,127)
43,045
12
12,847
12,730
Total equity and liabilities
55,136
55,775
The financial statements on pages 16 to 52 were approved and authorised for issue by the Board of Directors
on 5 April 2018.
Signed on behalf of the Board of Directors
C W Egleton
Director
19
Minoan Group Plc
Company Balance Sheet as at 31 October 2017
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
Warrant reserve
Retained earnings
Total equity
Liabilities
Current liabilities
Note to the
Financial
Statements
2017
£’000
2016
£’000
9
11
14
28,286
28,286
31,223
1
31,224
28,286
28,286
29,836
60
29,896
59,510
58,182
15,297
33,659
2,441
134
51,531
15,119
32,585
2,119
2,203
52,026
12
7,979
6,156
Total equity and liabilities
59,510
58,182
Company registration number: 3770602
As permitted by Section 408 of the Companies act 2006, the income statement is not presented as part of these
financial statements, The Company’s loss for the year ended 31 October 2017 was £2,255,000 (2016:
£1,519,000).
The financial statements on pages 16 to 52 were approved and authorised for issue by the Board of Directors
on 5 April 2018.
Signed on behalf of the Board of Directors
C W Egleton
Director
20
Minoan Group Plc
Consolidated Cash Flow Statement
Year ended 31 October 2017
Note to the
Consolidated
Cash Flow
Statement
2017
£’000
2016
£’000
Cash flows from operating activities
Net cash (outflow) from continuing operations
1
Net cash inflow from discontinued operations
Finance costs for continuing operations
Finance costs for discontinued operations
Net cash generated from/(used) in operating
activities
Cash flows from investing activities in
discontinued operations
Purchase of property, plant and equipment
Purchase of intangible assets:
Goodwill consideration
IT project
Net cash used in investing activities in
discontinued operations
Cash flows from financing activities in
continuing operations
Net proceeds from the issue of ordinary shares
Loans received
Net cash generated from financing activities in
continuing operations
Net decrease in cash
Cash transferred to non-current assets held for
sale
Cash at beginning of year
Cash at end of year
(1,041)
518
(262)
(75)
(860)
(128)
(425)
(4)
(557)
450
895
1,345
(72)
(11)
(83)
104
21
(325)
783
(255)
-
203
(103)
(130)
(140)
(373)
-
129
129
(41)
-
(41)
145
104
21
Minoan Group Plc
Note to the Consolidated Cash Flow Statement
Year ended 31 October 2017
1 Cash flows from operating activities in continuing operations
Loss before taxation
Finance costs
Depreciation
Exchange gain relevant to property, plant and equipment
Increase in inventories
Share-based payments
Decrease/(Increase) in receivables
Increase in current liabilities
Liabilities settled by the issue of ordinary shares
Non cash movement in assets held for sale
Net cash (outflow) from continuing operations
2017
£’000
2016
£’000
(3,004)
1,184
8
(11)
(1,601)
186
122
623
802
650
(1,041)
(2,301)
1,341
13
(36)
(1,296)
(24)
(67)
751
1,294
-
(325)
22
Note to the
Company
Cash Flow
Statement
1
Minoan Group Plc
Company Cash Flow Statement
Year ended 31 October 2017
Cash flows from operating activities
Net cash inflow/(outflow) from continuing
operations
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
2017
£’000
2016
£’000
(1,142)
(262)
(1,404)
-
-
450
895
1,345
(59)
60
1
40
(110)
(70)
-
-
-
129
129
59
1
60
23
Minoan Group Plc
Note to the Company Cash Flow Statement
Year ended 31 October 2017
1 Cash flows from operating activities
Loss before taxation
Finance costs
Share-based payments charge
Increase in receivables
Increase in current liabilities
Liabilities settled by the issue of ordinary shares
Net cash inflow/(outflow) from continuing operations
2017
£’000
2016
£’000
(2,255)
1,184
186
(1,387)
328
802
(1,142)
(1,519)
1,339
(24)
(1,080)
30
1,294
40
24
Minoan Group Plc
Notes to the Financial Statements
Year ended 31 October 2017
1 Accounting policies
These consolidated financial statements are prepared in accordance with EU adopted International Financial
Reporting Standards (“IFRS”) 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 where financial
instruments are stated at fair value.
Adoption of new and revised Standards
The International Accounting Standards Board and IFRIC have issued the following new and revised standards
and interpretations with an effective date after the date of these financial statements, which have been endorsed
and issued by the EU at 31 October 2017:
Standard/Interpretation
IFRS 9
IFRS 15
IFRS 16
Effective date
Title
Financial instruments
1 January 2018
Revenue from contracts with customers 1 January 2018
1 January 2019
Leases
The directors anticipate that the adoption of IFRS 9 in future periods will have no material impact on the profit
of the financial statements of the Group. The directors have not deemed it necessary to measure the impact of
IFRS 15 and 16 in future periods given that Revenue and Leases are only within Stewart Travel Limited, which
has been re-classified as Non-current assets held for sale.
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.
Following the unanimous approval of a Plenum of the Greek Council of State, the highest court in Greece, the
Presidential Decree granting land use approval for the Project was issued on 11 March 2016 and was published
in the Government Gazette. The planning rules for the Project are now enshrined in law. The appeals lodged
against the Presidential Decree have now been rejected by the Greek Supreme Court.
Accordingly, the directors consider it relevant that having completed financial joint venture agreements (see
note 12) prior to the above, 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.
In addition to specific Project related matters as noted above, and as has been the case in the past, the Group
continues to need to raise capital in order to meet its existing finance and working capital requirements. While
the directors consider that any necessary funds will be raised as required, the ability of the Company to raise
these funds is, by its nature, uncertain.
25
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
1 Accounting policies (continued)
Going concern (continued)
Since the year end the Company has announced the extension of the repayment date of the Hillside
International Holdings Limited loan facility from 31 December 2017 to 30 June 2018 (see note 20). Should it
be required, the Company is of the view that, following negotiation, the repayment date of the loan facility
would be further extended as in the past.
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 2017 using uniform accounting policies. The Group’s policy is to consolidate the
result of subsidiaries acquired in the year from the date of acquisition to the Group’s next accounting reference
date. 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 by the Group in exchange for control of the acquired business. 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; and
as set out above, the directors have exercised judgement in concluding that the company and group is
a going concern.
Goodwill
Goodwill arising on acquisitions represents the difference between the fair value of the net assets acquired and
the consideration paid and is recognised as an asset (see note 7).
Goodwill arising on acquisition is allocated to cash-generating units. The recoverable amount of the cash-
generating unit to which goodwill has been allocated is tested for impairment annually, or on such other
occasions that events or changes in circumstances indicate that it might be impaired. Any impairment is
recognised immediately as an expense and is not subsequently reversed.
26
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
1 Accounting policies (continued)
Property, plant and equipment
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:
Plant and equipment:
Fixtures and fittings:
Motor vehicles:
capital cost not depreciated
over the term of the lease
3 to 5 years
3 years
3 to 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.
Intangible assets/Research and development
Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised
as an expense except where the expenditure meets the following criteria:
a)
the technical feasibility of completing the intangible asset so that it will be available for use or
sale.
b)
its intention to complete the intangible asset and use or sell it.
c)
its ability to use or sell the intangible asset.
d) how the intangible asset will generate probable future economic benefits. Among other things,
the entity can demonstrate the existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
e)
f)
the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The expenditure is amortised over its useful economic life of five years.
27
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
1 Accounting policies (continued)
Investments
Investments in subsidiaries are stated at cost less any impairment deemed necessary.
Inventories
Inventories represent the actual 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.
The directors consider UK pounds sterling to be the functional currency of the Group, as this is the currency of
the majority of revenue and expenditure.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and short-term deposits, with a maturity of less than three
months, 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. They are subsequently measured at an amortised cost using the effective interest rate
method, less irrecoverable provision for receivables.
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest rate method.
Loans
Loan borrowings are recognised initially at fair value net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost and any difference between the proceeds (net of transaction costs) and
the redemption value is recognised as a borrowing cost over the period of the borrowings using the effective
interest method
Leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the
lease.
Revenue (Discontinued operations)
As 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.
28
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
1 Accounting policies (continued)
Non-current assets held for sale and discontinued operations
Where an asset, or disposal group (an asset together with related liabilities), is to be recovered principally
through a sale transaction and not through continuing use, and an active plan has been entered into to dispose
of the asset or disposal group, it is reclassified as held for sale. On reclassification, the asset is measured at the
lower of its carrying amount or fair value less costs to sell. Any losses on re-measurement are recognised in
profit or loss.
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. The fair values of the LTIP
awards, options and warrants are calculated using the Black-Scholes and Binomial option pricing models as
appropriate at the grant date. The fair value of LTIP awards and options are charged to profit or loss over their
vesting periods, with a corresponding entry recognised in equity. This charge does not involve any cash
payment by the Group.
Where warrants are issued in conjunction with a loan instrument, the fair value of the warrants forms part of
the total finance cost associated with that instrument and is released to profit or loss through finance costs over
the term of that instrument using the effective interest method.
Pensions
Loyalward Limited operates a stakeholder pension scheme for its employees and Stewart Travel Limited
operates a defined contribution pension scheme. Contributions payable to the pension scheme are charged to
profit or loss in the period to which they relate.
29
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
1 Accounting policies (continued)
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.
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.
30
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
2 Information regarding directors and employees
Directors’ and key management remuneration
Year ended 31 October 2017
Fees
Sums charged by third parties for
directors’ and key management services
Share-based payments (note 17)
Year ended 31 October 2016
Fees
Sums charged by third parties for
directors’ services
Share-based payments (note 17)
Costs taken to
inventories
Costs taken to
profit or loss
£’000
£’000
244
333
-
577
236
342
-
578
388
70
79
537
431
70
(24)
477
Total
£’000
632
403
79
1,114
667
412
(24)
1,055
The total directors’ and key management remuneration shown above includes the following amounts in respect
of the directors of the Company.
2017
2016
Fees/Sums charged
by third parties
Share-based
payments
Fees/Sums
charged by third
parties
Share-based
payments
C W Egleton (Chairman)
D C Wilson
B D Bartman
G D Cook
T R C Hill
£’000
£’000
£’000
320
250
35
35
46
686
42
20
6
4
7
79
296
250
35
35
37
653
Directors’ interests in the Company’s LTIP and share options are shown in note 17.
£’000
(12)
(9)
(1)
-
(1)
(23)
31
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
2 Information regarding directors and employees (continued)
Staff costs during the period (including directors and key management)
Year ended 31 October 2017
Salaries and fees
Social security cost
Share-based payments (note 17)
Year ended 31 October 2016
Salaries and fees
Social security cost
Share-based payments (note 17)
Costs taken to
inventories
£’000
Costs taken to
profit or loss
£’000
315
51
-
366
363
34
-
397
4,655
432
96
5,183
4,063
352
(24)
4,391
Total
£’000
4,970
483
96
5,549
4,426
386
(24)
4,788
Note: Staff costs exclude sums charged by third parties for directors’ services.
Monthly average number of persons employed
Directors
Sales and administration
3 Loss before taxation
The loss before taxation is stated after charging:
Depreciation
Amortisation
Operating leases
Auditor’s remuneration:
Audit fees
Tax services
2017
No.
5
226
2016
No.
5
203
2017
£’000
2016
£’000
132
345
54
72
5
122
334
83
54
4
Audit fees in respect of the Company were £20,000 (31 October 2016: £17,000). Tax services fees in respect of
the Company were £4,000 (31 October 2016: £500).
32
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
4
Segmental 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 and which is a continuing operation;
the Travel and Leisure division (UK), being the operation and management of the travel businesses,
which is a discontinued operation (see note below); and
the corporate development division (UK) as described above, which is a continuing operation.
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
Charge related to assets held for sale
Operating (loss)/profit
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
Charge related to asset held for sale
Total assets
2017
Luxury
Resorts
£’000
-
Travel and
Leisure
£’000
80,320
Corporate
Development
£’000
-
Total
£’000
80,320
-
-
-
8,700
(354)
8,346
-
-
-
8,700
(354)
8,346
(480)
(480)
(186)
(650)
(1,316)
(1,184)
(2,500)
-
(2,500)
(504)
(504)
-
-
(504)
(7,783)
563
-
-
563
(75)
488
- -
488
-
(504)
(504)
(8,767)
(421)
(186)
(650)
(1,257)
(1,259)
(2,516)
-
(2,516)
2
-
468
54
-
-
470
54
3,583
161
44,510
-
48,254
5,610 -
-
1,237
1,889
-
(250)
8,486
-
9,193
1,398
46,399
(250)
56,740
Total and current liabilities
12,847
1,604
-
14,451
33
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
4
Segmental information (continued)
Total transaction value
Revenue
Cost of sales
Gross profit
Operating expenses
Credit 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
2016
Luxury
Resorts
£’000
-
Travel and
Leisure
£’000
67,820
Corporate
Development
£’000
-
Total
£’000
67,820
-
-
-
7,317
(273)
7,044
-
-
-
7,317
(273)
7,044
(489)
(489)
24
(465)
100
(1,341)
(1,706)
-
(1,706)
(595)
(595)
-
(595)
(6,772)
272
-
272
(100)
(143)
29
- -
29 (595)
-
-
(595)
(7,856)
(812)
24
(788)
-
(1,484)
(2,272)
-
(2,272)
13
-
443
83
-
-
456
83
3,583
157
43,491
47,231
5,185
1,574
1,785
8,544
-
-
-
-
8,768
1,731
45,276
55,775
Total and current liabilities
10,561
2,169
-
12,730
As stated in the Strategic Report, the Group has announced its intention to sell the travel business and the
results for the year ended 31 October 2017 have been presented in accordance with IFRS 5. As a consequence,
the Profit after taxation of the Travel and Leisure business in the amount of £488,000 appears in the
Consolidated Statement of Comprehensive Income as Profit from discontinued operations. Similarly, the net
assets of the Travel and Leisure business are shown as non-current assets held for sale in the Consolidated
Balance Sheet and the lower of its fair value and carrying value.
34
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
5 Taxation
Consolidated
(a) Analysis of taxation for the year
UK corporation tax
(b) Factors affecting taxation for the year
Loss before taxation
2017
£’000
-
2017
£’000
(2,516)
2016
£’000
-
2016
£’000
(2,272)
Tax on ordinary activities multiplied by the UK corporation tax
rate of 19.41% (2016: 20%)
(488)
(454)
Effects of:
Expenses not deductible for tax purposes
Other timing differences
Increase in tax losses
Taxation (credit)/charge for the year
Taxation losses carried forward appear in note 13.
6 Loss per share
196
18
274
-
216
15
223
-
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 potential dilutive ordinary
shares. As the Group is loss making, there are no dilutive instruments in issue, and 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 2017 was 204,548,735 (31 October 2016:
190,972,389).
35
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
7
Intangible assets
Consolidated
2017
2016
Goodwill IT Projects
Total
Goodwill
IT Projects
£’000
£’000
£’000
£’000
£’000
Total
£’000
Cost
At beginning of year
Additions
8,768
425
1,720
10,488
8,638
1,580
10,218
4
429
130
-
140
-
270
-
Transfer to held for sale asset
(5,610)
(1,724)
(7,334)
At end of year
3,583
-
3,583
8,768
1,720
10,488
Accumulated amortisation
At beginning of year
Provided in year
- 717
- 345
717
345
Transfer to held for sale asset
- (1,062)
(1,062)
At end of year
-
-
-
- 383
- 334
-
-
- 717
383
334
-
717
Net book value
At beginning of year
At end of year
8,768 1,003
9,771
3,583
-
3,583
8,638
8,768
1,197
1,003
9,835
9,771
The Group conducts an annual impairment test on the carrying value of goodwill based on the recoverable
amount of two cash generating units: the Project and the Travel and Leisure business. As stated previously the
Group has announced its intention to sell the Travel and Leisure business and the results for the year ended 31
October 2017 have been presented in accordance with IFRS 5. As a consequence, the intangible assets of the
Travel and Leisure business are treated as Non-current assets held for sale in the Consolidated Balance Sheet.
The Project is assessed using fair value less costs to sell. The directors have assessed the recoverable amount of
the Project as being greater than the combined carrying value of the goodwill and inventories of £49,097,000
at 31 October 2017 on the basis of valuations previously carried out and the positive progress made in the
period since (see also note 10).
The goodwill allocated to the Travel and Leisure business is £5,610,000. The addition to goodwill in the
amount of £425,000 in year ended 31 October 2017 arose from cash and share considerations in respect of
business acquired in the current year.
36
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
8 Property, plant and equipment
Year ended 31 October 2017
Consolidated
Freehold land
Furniture,
fittings, plant
and
equipment
Leasehold
improvements
£’000
£’000
£’000
Cost
At 1 November 2016
Exchange adjustments
Additions
Disposals
Transfer to assets held for sale
At 31 October 2017
Accumulated depreciation
At 1 November 2016
Adjustment re disposals
Provided in year
Transfer to assets held for sale
At 31 October 2017
Net book value
192
9
-
-
-
201
48
-
5
-
53
1,212
2
43
(199)
(966)
92
867
(199)
89
(678)
79
At 31 October 2017
148
13
306
-
85
-
(391)
-
67
-
36
(103)
-
-
Total
£’000
1,710
11
128
(199)
(1,357)
293
982
(199)
130
(781)
132
161
As stated previously the Group has announced its intention to sell the Travel and Leisure business and the
results for the year ended 31 October 2017 have been presented in accordance with IFRS 5. As a consequence,
the Property, plant and equipment of the Travel and Leisure business is treated as a non-current asset held for
sale in the Consolidated Balance Sheet.
37
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
8 Property, plant and equipment (continued)
Year ended 31 October 2016
Consolidated
Freehold land
Furniture,
fittings, plant
and
equipment
Leasehold
improvements
£’000
£’000
£’000
Cost
At 1 November 2015
Exchange adjustments
Additions
At 31 October 2016
Accumulated depreciation
At 1 November 2015
Provided in year
At 31 October 2016
Net book value
At 31 October 2016
166
26
-
192
44
4
48
1,140
10
62
1,212
776
91
867
265
-
41
306
40
27
67
Total
£’000
1,571
36
103
1,710
860
122
982
144
345
239
728
38
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
9 Investments
Company
Year ended 31 October 2017
Cost
At 1 November 2016
Additions
At 31 October 2017
Impairment
At 31 October 2017
Shares in
subsidiaries
£’000
28,286
-
28,286
-
-
Net book value at 31 October 2017
28,286
Company
Year ended 31 October 2016
Cost
At 1 November 2015
Additions
At 31 October 2016
Impairment
At 31 October 2016
Shares in
subsidiaries
£’000
28,286
-
28,286
-
-
Net book value at 31 October 2016
28,286
Interests in subsidiaries
(Note: The percentages shown in respect of all investments relate to ordinary share capital)
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. (3.78% owned by Minoan Group Plc and 96.22% owned by Loyalward Limited) - A
company incorporated in Greece engaged in corporate, resort and renewable energy business management in
Greece.
39
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
9 Investments (continued)
Stewart Travel Limited (100%) - A company incorporated on Scotland operating as a multi-faceted distributor.
10
Inventories
Consolidated
Inventories at 31 October 2017 amounted to £44,163,000 (31 October 2016: £42,562,000), 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 (see also note 18).
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.
11 Receivables
Consolidated
Trade receivables
Other receivables and prepayments
Value added tax recoverable
No provision is considered necessary in respect of irrecoverable amounts.
Company
Amounts owed by subsidiary companies (see note 16)
Other receivables and prepayments
Value added tax recoverable
2017
£’000
-
245
81
326
2017
£’000
31,165
50
8
31,223
2016
£’000
976
1,562
72
2,610
2016
£’000
29,425
400
11
29,836
Amounts owed by subsidiary companies are repayable on demand, but are not expected to be received until the
realisation of the project.
40
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
12 Liabilities
Current liabilities
Consolidated
Trade and other payables
Other creditor (see below)
Social security and other taxes
Loans (see note 15)
Accruals and deferred charges
2017
£’000
1,011
1,000
41
6,118
4,677
12,847
2016
£’000
1,756
1,000
828
5,086
4,060
12,730
The other creditor 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.
See Note 4 regarding the treatment of the Travel and Leisure business balances.
Current liabilities
Company
Trade and other payables
Amounts owed to subsidiary companies (see note 16)
Loans (see note 15)
Accruals and deferred charges
2017
£’000
473
38
6,118
1,350
7,979
2016
£’000
394
38
5,086
638
6,156
Amounts owed to subsidiary companies are interest free and repayable on demand.
Loans include £4,890,000 (2016: £4,753,0000) in respect of the loan facility agreement with Hillside
International Holdings Limited (“Hillside”) originally drawn down as £5,000,000. Subsequent to the year end,
the repayment date was extended to 30 June 2018. The loan is subject to interest at 10% per annum. Hillside
has also received Warrants to subscribe for ordinary shares in Minoan Group Plc. The total finance cost of the
loan is comprised of the cash interest at 10% per annum and the fair value of the Warrants issued in association
with loan and has been recognised as a finance cost spread over the life of the loan using the effective interest
method. All other remaining loans are repayable on demand.
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.
41
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
13 Deferred taxation
Consolidated
No deferred taxation asset has been recognised in the financial statements due to the certainty of its
recoverability. 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
2017
£’000
2016
£’000
2017
£’000
2016
£’000
(84)
361
2,300
2,577
(75)
330
2,055
2,310
-
-
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 17% (2016: 17%).
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
2017
£’000
2016
£’000
2016
£’000
2015
£’000
147
589
736
129
440
569
-
-
-
-
-
-
The above potential deferred tax asset is based on a corporation tax rate of 17% (2016: 17%).
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.
42
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
14 Share capital
Called up, allotted and fully paid
31 October 2017 - 212,223,442 Ordinary Shares of 1p each
54,148,031 Deferred Shares of 24p each
31 October 2016 - 194,650,968 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)
17,967,339 Ordinary Shares of 1p each (2016: 17,703,198
Ordinary Shares of 1p each)
2017
£’000
2,122
12,996
-
-
15,118
179
15,297
2016
£’000
-
-
1,946
12,996
14,942
177
15,119
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, 2,700,000 Ordinary Shares of 1p each were issued at 8 pence per share, 4,482,000 Ordinary
Shares of 1p each were issued at 10.32 pence per share, 3,424,500 Ordinary Shares of 1p each were issued at
10.59 pence per share and 761,574 Ordinary Shares of 1p each were issued at 10 pence per share to settle
certain existing liabilities. In addition, 1,203,502 Ordinary Shares of 1p each were issued at 9.14 pence per
share in respect of the acquisition by Stewart Travel Limited of the business and assets of Morningside Travel
Limited and 5,000,898 shares were placed at 9 pence per share.
15 Financial instruments and risk management
The Group’s financial instruments comprise borrowings, cash and various items such as trade receivables and
trade payables that arise directly from its 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.
43
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
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.
All financial liabilities are non-derivative and fall due within one year (see note 12).
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. All UK companies hold cash in UK
pounds Sterling only. The Sterling and Euro cash balances attract interest at floating rates.
Of the Group’s assets, less than 1% is held in Euros, the remainder being held in Sterling. Of the Group’s
liabilities, less than 2% is held in Euros, with the remainder held in Sterling.
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.
The Group’s liabilities, which are all denominated in sterling, are as follows:
Loans to be settled by the
issue of shares (see note 14)
Loans repayable in less than
one year
2017
2016
£’000
£’000
2,250
6,118
2,400
5,086
The loans to be settled by the issue of shares, of which £375,000 are to be settled by the issue of shares at 9
pence per share, £75,000 are to be settled by the issue of shares at 10 pence per share, £600,000 are to be
settled by the issue of shares at 11.6 pence per share, £150,000 are to be settled by the issue of shares at 13.575
pence per share, £200,000 are to be settled by the issue of shares at 13.75 pence per share, £150,000 are to be
settled by the issue of shares at 14 pence per share, £400,000 are to be settled by the issue of shares at 15.5
pence per share and £300,000 are to be settled by the issue of shares at 18 pence per share, have been classified
as equity and share premium in accordance with IAS 32 (note 14).
The Board has determined that realistic fluctuations in interest rates will not have a significant impact on
financial liabilities
44
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
15 Financial instruments and risk management (continued)
During the year a total of £766,000 of loans was settled by the issue of 10,606,500 shares at prices between 8
pence per share and 10.59 pence per share (31 October 2016: £420,000 was settled by the issue of 5,819,444
shares at prices between 9 pence per share and 10 pence per share) (note 14).
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 2017 and at 31 October 2016.
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.
Keith Day & Partners Ltd, a company in which N J Day, a director of Loyalward Limited, is a director and
shareholder.
Transactions undertaken with these related parties in relation to directors’ services are shown below.
Services of the above persons
supplied in year ended
Payable as at
31.10.17
£’000
31.10.16
£’000
31.10.17
£’000
31.10.16
£’000
320
16
(3)
35
35
296
16
30
35
35
260
102
113
159
90
296
87
127
125
55
Simmons International Limited
Bizwatch Limited
I.H.M. Industry & Hotel
Management Limited
B D Bartman & Co
Keith Day & Partners Ltd
45
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
16 Related party transactions (continued)
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 31.10.17
£’000
Receivable/(Payable) as at 31.10.16
£’000
Loyalward Limited
Stewart Travel Limited
Loyalward Leisure Plc
28,372
2,793
(38)
28,178
1,247
(38)
17 Long term incentive plan, share options and warrants
Share-based payments charge
Year ended 31 October 2017
Share-based payments - directors
Share-based payments - other
Year ended 31 October 2016
Share-based payments - directors
£’000
79
107
186
(24)
(24)
Long term incentive plan
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 certain level of 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
46
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
17 Long term incentive plan, share options and warrants (continued)
Share-based payments charge (continued)
The following awards have been granted with an original expiry date of 26 April 2017, which was extended
during the year to 31 October 2018:
Performance condition A Performance condition B
Performance condition C
Maximum number of
Ordinary Shares
exercisable at 9 pence
Maximum number of
Ordinary Shares
exercisable at 9 pence
Maximum number of
Ordinary Shares
exercisable at 9 pence
C W Egleton
D C Wilson
B D Bartman
T R C Hill
W C Cole (director
Loyalward Limited)
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
The charge made for the value of the LTIP and options has been calculated using the Black-Scholes and
Binomial option pricing models as appropriate. As stated previously, the charge does not involve any cash
payment. The average weighted price of LTIP share options outstanding at the beginning and end of the period
is 9 pence.
47
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
17 Long term incentive plan, share options and warrants (continued)
Share-based payments charge (continued)
Directors’ interests in share options
31 October 2017
31 October 2016
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
31/12/17
1,000,000
31/12/17
850,000
31/12/17
500,000
31/12/17
100,000
31/12/17
7p
1p
1p
7p
7p
200,000
31/12/16
1,000,000
31/12/16
850,000
31/12/16
500,000
31/12/16
100,000
31/12/16
1,000,000
31/12/17
1p
1,000,000
31/12/16
1,711,111
31/12/17
250,000
31/12/17
384,615
31/12/17
377,778
31/12/17
500,000
31/12/17
400,000
31/12/17
1p
7p
1p
1p
7p
7p
1,711,111
31/12/16
250,000
31/12/16
384,615
31/12/16
377,778
31/12/16
500,000
31/12/16
400,000
31/12/16
7,273,504
7,273,504
48
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
17 Long term incentive plan, share options and warrants (continued)
Directors’ interests in share options (continued)
31 October 2017
31 October 2016
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 (see note 2)
B Cassidy
7p
1p
1p
1p
1p
1p
8p
7,273,504
300,000
31/12/17
1,233,333
31/12/17
1,000,000
31/12/17
2,500,000
31/12/17
850,000
31/12/17
122,222
31/12/17
1,000,000
9/01/20
14,279,059
7p
1p
1p
1p
1p
1p
7,273,504
300,000
31/12/16
1,233,333
31/12/16
1,000,000
31/12/16
2,500,000
31/12/16
850,000
31/12/16
122,222
31/12/16
-
13,279,059
During the year the expiry date of the above options was extended to 31 December 2017.
The weighted average exercise price of Directors’ related share options at the beginning and end of the period
is 2 pence. The average weighted exercise price of options granted in the year is 8 pence.
Other share options
The following additional options to purchase ordinary shares in the Company have been granted:
Exercisable at 60 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 10 pence per share
Ordinary Shares
31.10.17
3,318,000
223,077
325,000
2,500,000
250,000
6,000,000
12,616,077
31.10.16
3,318,000
223,077
325,000
2,500,000
250,000
-
6,616,077
Expiry date
See note 1
31/12/17
31/12/17
31/12/17
31/12/17
9/07/18
The weighted average exercise price of the other share options outstanding at the beginning of the period is 34
pence and outstanding at the end of the period is 43 pence. The weighted average price of other share options
granted during the period is 10 pence.
49
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
17 Long term incentive plan, share options and warrants (continued)
Notes re share options:
1. These options were granted between 24 June 2005 and 31 December 2013. The expiry date of these options
is 90 days after certain valid building licences and permits have been granted. These building licences and
permits have not yet been granted.
2. Options granted in exchange for the waiver of fees etc. by current directors and a former director.
During the year the expiry date of these options was extended to 31 December 2017.
See also Note 20 for events after the balance sheet date.
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:
During the year the expiry date of all the warrants was extended to 23 October 2020 and the exercise price of
10,000,000 warrants was amended from 13 pence per share to 8 pence per share in line with the other warrants.
These modifications resulted in an increase of £322,000 in the fair value of the warrants. This has been spread,
along with the existing fair value, across the life of the loan on an amortised cost basis. The modification was
valued using Black-Scholes method.
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 13 pence per share
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Exercisable at 8 pence per share
Ordinary Shares
31.10.17
50,000,000
50,000,000
31.10.16
10,000,000
5,000,000
10,000,000
10,000,000
5,000,000
5,000,000
5,000,000
-
50,000,000
Expiry date
17/10/18
27/11/18
05/02/19
07/08/19
30/04/20
28/05/20
23/10/20
23/10/20
As part of the loan facility agreement, £125,000 will be payable to the warrant holder for each 10 million
warrants exercised.
See also Note 20 for events after the balance sheet date.
50
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
17 Long term incentive plan, share options and warrants (continued)
Finance costs
Year ended 31 October 2017
Fair value of warrants issued
Loan interest
Other interest
Year ended 31 October 2016
Fair value of warrants issued
Loan interest
Other interest
£’000
459
460
265
1,184
930
411
143
1,484
18 Contingent liabilities and commitments
Other than as stated in notes 10 and 19, the Group has no other capital or operating commitments.
19 Operating lease commitments
The Group has the following total future minimum lease commitments in respect of non-cancellable operating
leases:
Year ended 31 October 2017
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
378
45
14
437
Leases expiring in
2 to 5 years
£’000
1,158
31
11
1,200
Over 5 years
£’000
582
-
-
582
Year ended 31 October 2016
Leasehold property
Equipment
Motor vehicles
Up to 1 year
£’000
354
46
16
416
Leases expiring in
2 to 5 years
£’000
1,239
77
25
1,341
Over 5 years
£’000
738
-
-
738
Total
£’000
2,118
76
25
2,219
Total
£’000
2,331
123
41
2,495
51
Minoan Group Plc
Notes to the Financial Statements (continued)
Year ended 31 October 2017
20 Events after the balance sheet date
1.
2.
3.
It was announced on 14 December 2017 that the loan facility dated 16 October 2013 from Hillside
International Holdings Limited had been extended from 31 December 2017 to 30 June 2018 and
that interest is now payable at 10% per annum (previously 8% per annum).
As a result of the Subscription and Broker Offer announced on 18 December 2017, the exercise
price of the Warrants was amended to 7 pence per share.
It was announced on 29 December 2017 that the expiry dates of those Options expiring on 31
December 2017 would be extended to 31 December 2018.
52