Annual Report & Financial Statements
for the 52 weeks ended 2 October 2021
Contents
Strategic Report
Directors and Advisers
Chief Executive’s Report
Financial Review
Key Performance Indicators
Principal Risks and Uncertainties
2
3
8
10
11
Governance
15
Corporate Governance Statement
23
Board of Directors
24
Remuneration Report
Directors’ Report
29
Independent Auditor’s Report to the members of Shoe Zone plc 37
Financial Statements
Consolidated Income Statement
Consolidated Statement of Total Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Shareholder Information
Notice of Annual General Meeting
44
45
46
47
48
49
90
91
92
96
This document is important and requires your immediate attention. If you are in any doubt
as to the action you should take, you should contact an appropriate independent advisor
authorised under the Finanical Services and Markets Act 2000 (as amended) immediately. If you
have sold or otherwise transferred all of your shares in Shoe Zone plc you should forward this
document to the purchaser or transferee, or to the stockbroker, bank or other agent through
whom the sale or transfer was affected for transmission to the purchaser or transferee.
Strategic Report
1
Directors and Advisers
Directors
A E P Smith
J C P Smith
T M Boot (Appointed 8th March 2021)
M J Collins
V J Norrish
Secretary
C A Bowen
Registered office
Haramead Business Centre
Humberstone Road
Leicester
LE1 2LH
Auditor
Cooper Parry Group Limited
East Midlands Office
Sky View, Argosy Road
East Midlands Airport
Derby
DE74 2SA
Bankers
NatWest
1 Granby Street
Leicester
LE1 9GT
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Solicitors
Freeths LLP
One Colton Square
Leicester
LE1 1QH
Corporate broker
Zeus Capital Ltd
10 Old Burlington Ltd
London
W1S 3AG
Strategic Report
2
Chief Executive’s Report
Shoe Zone had a very successful year due to the incredible
hard work from our teams, reducing costs, reducing non-
essential capital expenditure, accelerating investment in our
digital business and improving and streamlining operations.
Revenues for the year were £119.1m (2020: £122.6m). Within this, stores were £88.6m (2020:
£103.0m), due to trading from fewer stores and for 36 weeks, (2020: 41 weeks). Digital revenues
were £30.5m (2020: £19.3m), an increase of 58%.
Profit before tax was £9.5m (2020: £(14.6)m), with an earnings per share of 14.03p
(2020:(23.81)p).
We added debt to our business in 2020 through a £15m CLBILS COVID related loan and at the
end of this year we had an outstanding balance of £4.4m, which has now been fully repaid as at
6 January 2022.
Our business model of digital, big box and hybrid stores has been refreshed to accelerate growth
across all three formats due to favourable market conditions.
Digital
Digital continues to be a key growth area and has traded strongly over the last 12 months.
Our decision to invest in infrastructure and people pre-pandemic enabled us to take advantage
of the change in buying habits and to cope with the increase in volumes through our Digital
shoehub platform.
Digital revenue was £30.5m, 25.6% of total revenues (2020: £19.3m, 15.7%) growth of 58% and
a 2 year growth of 188%. Trading contribution was £8.5m, 27.9% of total contribution (2020:
£4.6m, 23.8%). The increase in percentage contribution was due to a greater proportion of full
price sales and as a result the gross margin achieved was 57.8% (2020: 51.7%).
The email database grew to 1.06m (2020:1.02m) of engaged members with the conversion rate
growing to 5.5% (2020:4.8%). All areas of sales grew: Email revenue £23.4m (2020:15.4m), paid
revenue £3.9m (2020:1.8m), affiliates £2.4m (2020: £1.1m), Amazon £8.8m (2020: £3.5m), eBay
£1.8m (2020: £0.9m) and drop ship partners £2.1m (2020: Nil).
The returns rate for the year was 8.4% (2020: 11.6%) due to the lockdown mix of product sold.
Big Box & Hybrid
Big Box numbers have stayed the same at 51. Revenue was £17.8m (2020: £17.1m) with a
contribution of £0.6m (2020: £0.2m loss).
We have 16 (2020:6) Hybrid stores with a revenue of £4.1m (2020: £2.2m) and a contribution of
£0.3m (2020: £0.1m loss).
Both of these formats have performed extremely well and are key to the property portfolio
transformation over the next 5 years.
Strategic Report
3
Chief Executive’s Report CONTINUED
Product
Our Big Box stores offer 650 styles per season (350 branded), Hybrid stores offer 475 styles per
season (175 branded) and Original stores offer 300 core styles per season. As we refit existing
stores to our new formats, the branded mix will continue to form a higher proportion of our
overall sales.
Our Digital shoehub platform offers the full store ranges plus approximately 2,600 online
exclusive ranges per season which will grow to at least 4,000 over the next 12 months.
We have also introduced our first drop ship partners, in the last 12 months and there will be
further partners added to our shoehub platform in the future.
Property
We ended the period trading from 410 stores, having closed net 50 unprofitable stores and
converted a further 10 existing stores to our new formats.
Our average lease length is 1.9 years, giving us the opportunity to respond to changes in any
retail location at short notice. Property supply continues to outstrip demand and therefore we will
take advantage of this and significantly improve our property portfolio over the medium term.
Total capital expenditure was £1.4m (2020: £2.8m).
We achieved rent reductions on renewal of £1.9m (2020: £0.8m) on an annualised basis, an
average reduction of 52.9% (2020: 30.9%).
Dividend
At the year-end our outstanding CLBILS loan balance was £4.4m. The terms of the loan restrict
any dividend payments whilst the loan balance is still in place. At 6 January 2022 the outstanding
loan balance has been cleared and therefore if trading continues to be stable, we expect to
restart modest dividends at our half-year results.
Outlook
We continue to drive our digital lead strategy on the back of these solid set of results. The
hard work completed to reduce costs, streamline operations and accelerate digital investment,
positions us well for the year ahead.
Strategic Report
4
Chief Executive’s Report CONTINUED
Property
We continue to transform our property portfolio with relocations/new stores being partially
funded by landlords through rent free periods of typically 12 months.
We will see a number of existing stores refitted to our new formats and many stores relocated to
prime locations within key towns at lower rents.
We ended the year with 51 Big Box, 16 Hybrid and 343 Original stores. This year we expect to
relocate or open a further 25 stores and continue to close a number of unprofitable stores. Since
the year end we have relocated 5 stores to our new formats with a further 15 in legals.
Capital expenditure
We will spend 3% of sales per annum to cover 40 store projects (25 relocations and 15 refits) and
Head Office infrastructure changes and IT projects.
Digital
We are further automating the distribution centre’s infrastructure with the addition of 2 packing
machines to enable quicker throughput and more efficient processing. We have introduced a
new customer service system for better analytics and response. We have appointed a new email
service partner to better maximise the 1.5m engaged members. New payment options will be
introduced such as Apple Pay and Klarna. Further affiliate and drop ship partners will be added.
Online exclusive styles will be increased by at least 2,000 over the next 12 months.
Product
We expect markdown levels to reduce and margin levels to be maintained. Supplier payments
remain up to date as they did at the year-end. Our buying and shipping teams are doing an
exceptional job of managing the direct from factory supply chain and we are confident that we
are performing better than the market average.
Conclusion
A lot of work undertaken in recent months will underpin our strategy as we look forward with
optimism going into the New Year a leaner, stronger and more resilient business, especially
having reached our goal of becoming debt free 2 years earlier than expected.
The Digital momentum and projects pipeline gives us confidence the company’s performance
will be in line with market expectations.
People form a key part of our business success, even more so as we look forward to the next
generation of our strategy. We will continue to invest in our team by increasing training and
career development plans, offering more qualification sponsorship and enhancing our graduate
programme.
I would like to thank all of our Shoe Zone team for their amazing support and commitment over
the last 15 months.
Strategic Report
5
Chief Executive’s Report CONTINUED
Director’s statement of compliance with the duty to promote
the success of the group (Section 172(1) statement)
The Directors have acted in a way that they consider, in good faith, promotes the success of the
Group for the benefit of its members as a whole, and in doing so have given regard to (amongst
other matters):
External relationships
The vast majority of the Group’s products are manufactured overseas in China and to a lesser
extent in India and Europe. As a result, the Group is subject to the risks associated with
international trade, particularly those common in the importation of goods from developing
countries, including the imposition of taxes or other charges on imports, compliance with and
changes to import restrictions and regulations, and exposure to different legal standards and the
burden of complying with a variety of foreign laws and changing foreign government policies.
The Group’s policy for the payment of suppliers is to agree payment terms in advance and to
abide by such terms.
The Group continually develops strategies to further improve its strong relationship with its
suppliers.
Our people
Our long-term success depends on looking after the best interests of our employees, customers,
shareholders and suppliers.
All employees are able to contribute to the ongoing success of the business through regular
contact between management and employees. We promote equal opportunities and do not
tolerate discrimination of any kind. We operate a non-contractual profit share scheme that
rewards employees based on the overall company profit performance. Details on the number of
people employed can be found in note 7 of the financial statements.
The Board meets regularly and communicates with our people on a regular basis to ensure they
all understand our strategic objectives both short and long-term.
Charity
We donated over £270,000 to charitable causes. These donations are mainly targeted at children
in poverty/difficult circumstances locally, nationally and internationally and delivered via The
Shoe Zone Trust and we commit to contributing 2% of profits into the trust each year.
Strategic Report
6
Chief Executive’s Report CONTINUED
Environment
We recognise the impact of our activities on the environment. We relentlessly review our
consumption of single use plastics and have eliminated them in all own label products. We recycle
all cardboard and plastic waste from our stores and Head Office. We use sea transportation to
reduce emissions. We are currently trialling our first Compressed Natural Gas delivery lorry as
well as moving to a hybrid/electric car fleet as quickly as renewals allow.
Political donations
During its last financial period the Group made no political donations and incurred no political
expenditure. The Group does not intend to make any such donations or incur any such
expenditure this year.
Strategic Report
7
Financial Review
In the 52 weeks to 2 October 2021, total revenues were
£119.1m (2020: £122.6m) having traded for 36 weeks. This
was offset by an increase in Digital sales. We ended the
year with 410 stores (2020: 460) stores.
Profit before Tax was £9.5m (2020: Loss before Tax £(14.6)m). This significant increase was due in
part to a 25 week continuous period of trade from mid-April, which covered key trading periods
in the year, growth in Digital revenue and profitability and the receipt of Government support.
We continue to actively reduce our cost base in all areas of the business and have reduced our
rent bill through proactive and positive discussions with landlords.
Digital growth has accelerated significantly with revenues of £30.5m (2020: £19.3m) an increase
of 58%. Profit contribution from Digital increased to £8.5m (2020: £4.6m) in the year. This has
been driven by the pre pandemic investment in infrastructure, new online exclusive ranges and
people, and this will form the core of our business going forward.
Product gross margins increased to 61.5% (2020: 61.4%) due to less Digital promotional activity
and therefore a higher proportion of full price sales.
Gross profit increased by £27.2m to £32.5m (2020: £5.2m) due to reductions in cost of inventory
purchases £2.0m, store wages £4.8m, store rates £3.8m, depreciation £4.2m, right-of-use-asset
lease depreciation £4.0m, asset impairments £4.9m and retail grants receivable of £6.1m, offset
by an increase in Digital related postage of £2.0m.
Admin expenses increased by £3.0m to £16.9m (2020: £13.9m) due to an increase in Digital
related costs of £1.6m and further closure and impairment provisioning of £1.2m.
Distribution costs increased by £0.5m to £4.5m (2020: £4m).
The corporation tax charge through the P&L is £2.4m (2020: repayment of£2.7m) which includes
£4.5m of brought forward tax losses that offsets part of the taxable profits for the year.
Earnings per share are 14.03p (2020: (23.81)p).
Capital expenditure reduced to £1.4m (2020: £2.8m) as we reduced non-essential spend. The
expenditure in the year was for key refits and relocations to our Hybrid formats.
At the year-end the cash and cash equivalents balance was £19.0m (2020: £13.3m) with net cash
of £14.6m (2020: £6.3m). We have a loan with National Westminster Bank supported by the
COVID-19 Large Business Interruption Loan Scheme (CLBILS) and the balance remaining at the
year-end was £4.4m, which was repaid on 6 Jan 2022. The Group’s current bank facilities also
include an on demand overdraft facility of £3.0m, which has not been used during the year.
Strategic Report
8
Financial Review CONTINUED
The pension liability in the schemes reduced by £4.7m to £5.9m (2020: £10.6m). During the year
we made an additional contribution of £1.5m into the scheme. The reduction in deficit is also
due to an increase in bond yields which reduces the value placed on the scheme’s liabilities, and
a better than expected investment performance.
The Group uses derivative financial instruments, typically forward exchange contracts, to hedge
the risk of future foreign currency fluctuations. The hedging policy enables the effective portion
of changes in the fair value of designated derivatives to be recognised in other comprehensive
income. Historically these movements would have been recognised in the Income Statement.
Further information can be seen in accounting policies in note 1 of the financial statements.
Derivative financial liabilities of £0.6m compares to a £0.1m financial liability in 2020. This
represents the market to market valuation of the derivative hedges in place at the end of the
financial year.
Under the terms of the CLBILS loan we are unable to pay dividends whilst a loan balance is in
place, but now that the loan has been fully repaid, and if trading continues to be stable, we will
look to restart modest dividends at our half year results.
Strategic Report
9
Key Performance Indicators
The Group uses the following performance measures) to monitor progress against strategic
objectives.
ONLINE PARTICIPATION %
25.7%
2020: 15.7%
Online sales as a percentage of total sales. Online sales
exclude orders placed in store.
The online participation increased to 25.7% (2020: 15.7%). This performance
reflects the growth of the Shoe Zone.com, Amazon and eBay and reflects the
lockdown periods restricting store sales.
PRODUCT GROSS MARGIN %
61.5%
2020: 61.4%
Product Gross Profit expressed as a percentage of
revenue.
Product Gross Margin was 61.5% (2020: 61.4%). This increase reflects a reduction
in promotional activity driven primarily by heavier discounting in the initial
lockdowns.
CASH BALANCE
£14.6m
2020: £6.3m
Cash held by the Group at the period end.
We finished the year with a net cash balance of £14.6m (2020: £6.3m).
EARNINGS PER SHARE
14.03p
2020: (23.81p)
The percentage movement in Earnings per Share.
Earnings per Share increased to 14.03p (2020: (23.81)p).
Strategic Report
10
Principal Risks and Uncertainties
We set out below the principal risks and uncertainties that
the Directors consider could impact the business. The list
highlights the key risks but there may be other risks to
which the business is exposed. The list is not intended to
be exhaustive.
Market and Competition
The footwear market is highly competitive, particularly with respect to price, product selection,
quality and store location. The markets the Group operates in are, on a comparative basis, free
and open markets with low barriers to entry. The Group competes at national and local levels
with a diverse group of retailers of varying sizes and covering different product categories and
geographic markets. These competitors include local, national and global retailers, including
other specialist footwear retailers, supermarkets, online retailers and local independent retailers.
Some competitors may have greater market presence, name recognition, financial resources and
economies of scale or lower cost bases than the Group and may be able to withstand, or respond
more swiftly to, changes in market conditions, any of which could give them a competitive
advantage over the Group. In addition, like many other retailers, because the Group does not
have exclusive rights to many of the elements that comprise its in-store experience and product
offering, competitors may seek to copy or improve on the Group’s business strategy, which could
significantly harm the Group’s competitive position.
The Board monitors competitor activities and discusses them on a weekly basis. The Group
has adopted a strategy which intends to differentiate itself from its closest competitors and
endeavours to price match on any cross over product lines. Maintaining price competitiveness
is a key focus of the business.
Identifying fashion and trends
The success of the Group’s business depends in part on its ability to innovate and to identify,
anticipate and respond to evolving trends in consumer preferences, demographics and fashion
trends, and to translate these trends into appropriate, saleable products. The Group seeks to
change and refresh its product offering seasonally in order to drive customer traffic through its
stores and online offering but demand for, and market acceptance of, these new products is
uncertain.
Trends and demands are continually reviewed by knowledgeable and experienced employees
who have a high level of market awareness. The Board monitors best sellers on a weekly basis
and evaluates the performance of new lines.
Economic factors
We continue to see uncertain economic conditions in the UK and globally, as well as economic
factors such as employment levels, consumer debt levels, lack of available credit, energy costs,
cost inflation, currency exchange rates, interest and tax rates, all of which may adversely affect
the disposable income of the Group’s customers, which could result in lower sales.
Strategic Report
11
Principal Risks and
Uncertainties CONTINUED
In particular, in times of economic uncertainty or recession or lack of consumer confidence, there
may be a decrease in discretionary purchases generally, which could have a material adverse
effect on the Group’s business, results of operations and financial condition. Global economic
conditions and uncertainties may also impact the Group’s manufacturers and suppliers in ways
that could adversely affect the Group’s business.
The Board considers very carefully the economic climate in planning its product ranges and pricing
structure. As the business is focussed on offering low prices it is more resilient to reductions in
consumer expenditure than other footwear retailers.
Reliance on overseas suppliers
Like many retailers, the Group is dependent on being able to source suitable products from
manufacturers and other suppliers at a sufficiently low cost and in a timely manner. Although
the Group enjoys good relationships with a wide range of manufacturers and other suppliers
and is not overly reliant on any one supplier, there is still potential for the Group to be exposed
to adverse operational and financial risks should there be a deterioration in relationships with a
number of its key suppliers or if the Group is unable to identify and develop relationships with
suitable suppliers who can satisfy its standards for price, quality, safety and its quantity and
delivery requirements.
The vast majority of the Group’s retail products are manufactured overseas by suppliers located
in China and to a lesser extent India and Europe. As a result, the Group is also subject to
the risks associated with international trade, particularly those risks which are common in the
importation of goods from developing countries, including the imposition of taxes or other
charges on imports, compliance with and changes to import restrictions and regulations, and
exposure to different legal standards and the burden of complying with a variety of foreign laws
and changing foreign government policies.
The Board is always seeking out new sources of supply with a clear strategy of diversification.
Members of the Management Team have historically visited overseas suppliers to ensure that
existing factories are being regularly monitored and new factories are being sourced that meet
our price, quality and safety standards. We are currently unable to travel to our key sourcing
markets due to COVID restrictions but will restart as soon as we are able.
Reputational risk
The Group’s sales are dependent in part on the strength and reputation of the brands it offers,
including own label brands, and are dependent on consumers’ perceptions of the Group and its
products.
The majority of the Group’s profits are derived through sales of its own label brands. Maintaining
broad market acceptance of its own label brands depends on many factors, including value,
quality and consumer perception. The Group may not in the future achieve or maintain its
expected sales of its own label brands, which could have a material adverse effect on the Group’s
business, results of operations and financial position.
Strategic Report
12
Principal Risks and
Uncertainties CONTINUED
The Board has sufficient internal processes to ensure that it receives feedback from stores
and customers on the design and quality of its products. The business’ reputation is carefully
managed through internal procedures by the Board.
Loss of key operating site
The Group has a single Distribution Centre and its head office located at premises in Leicester
and therefore the Group is currently entirely dependent on the continued efficient operation of
the Leicester premises. Any disruption to the operation of the Leicester premises may therefore
have an adverse effect upon the Group’s financial condition, operations and business prospects.
The premises may suffer prolonged power or equipment failures, failures in its IT systems or
networks or damage from fire, flood, or other disasters or unforeseen events which may not be
covered by, or may be in excess of, its insurance coverage. Damage resulting from any of these
events may take considerable time to repair. A prolonged period before rectification could have
an adverse effect upon the Group’s financial condition, operations and business prospects.
The business has developed and maintains a business continuity plan for the unlikely scenario
of long term disruption to the Leicester premises. The business retains appropriate insurance to
mitigate the risk of such a loss.
Data security and IT reliability
The Group relies to a significant degree on the uninterrupted operation of its computer and
communications systems and infrastructure, as well as the equivalent systems and infrastructure
of third parties, for the efficient running of its business, including with respect to inventory,
merchandising, finance, human resources, distribution and logistics and store operations.
The Group must comply with restrictions on the use of customer data and ensure that confidential
information (such as credit or debit card numbers) is transmitted in a secure manner over public
networks.
Despite controls to ensure the confidentiality and integrity of customer data, the Group may
breach restrictions or may be subject to attack from computer programmes that attempt to
penetrate the network security and misappropriate confidential information. Any such breach
or compromise of security could adversely impact the Group’s reputation with customers and
consumers, lead to litigation or fines, and as a result, have a material adverse effect on its
business, results of operations and financial position.
The business has appropriate disaster recovery and business interruption plans. The IT systems
have been developed significantly in-house reducing the business’s dependency on any third
parties. Reputable third party antivirus, anti-spam and web filtering software are in use and its
appropriateness regularly reviewed.
Strategic Report
13
Principal Risks and
Uncertainties CONTINUED
Reliance on key personnel
The Group depends on a relatively small senior Management Team and the loss of a material
number of such individuals or the inability to attract appropriate personnel in a timely manner
could impact upon the Group’s future performance.
The Group’s Remuneration Policy is designed to attract, retain and motivate management.
Succession plans are in place for key roles.
Product
Shoe Zone continues to review the potential risks and opportunities that the post Brexit
environment presents. Within the Shoe Zone product range, less than 2.5% of all stock is
purchased from within the EU, this limits any potential risks.
The import of finished product from the Far East represents the main areas of risk, initial disruption
at ports has now been resolved and deliveries have only been marginally impacted. No major
instability of the Sterling/Dollar exchange rate has been seen and Shoe Zone is fully hedged for
the forthcoming financial year.
We continue to monitor all risk factors.
COVID-19
The COVID-19 pandemic has presented all retailers with challenges and Shoe Zone has not been
immune to this. We have implemented a number of cash preservation measures, reviewed our
operations and continue to monitor the situation as it develops.
During the pandemic, Shoe Zone took out a CLBILS loan (see note 18) and has made use of the
government assistance.
Shoe Zone remains in a satisfactory cash position despite the uncertain trading environment.
Going concern
Please see page 35 in Director’s report regarding going concern.
The strategic report was approved by the Board.
On behalf of the Board
Anthony Smith
Chief Executive
Date: 10 January 2022
Strategic Report
14
Corporate Governance
Statement
Chairman’s Statement
It is with pleasure that I take the opportunity to outline the approach taken to corporate
governance within Shoe Zone plc.
The Board is committed to maintaining high standards of corporate governance and, with
effect from 1 September 2018, the Board has adopted the Quoted Companies Alliance’s (QCA)
Corporate Governance Code for small and mid-size quoted companies (the “Code”).
The Code was revised in April 2018 to meet the new requirements of AIM Rule 26 and sets
out ten broad principles of corporate governance. The code states what are considered to be
appropriate corporate governance arrangements for companies. It provides an explanation
about how they are meeting the principles through certain prescribed disclosures.
The Chairman leads the Board and is responsible for its overall effectiveness in directing the
Company. He manages the Board agenda and ensures that all Directors receive accurate, timely
and clear information and effectively contribute their various talents and experience in the
development and implementation of the Company’s strategy. He ensures that the nature and
extent of the significant risks the Company is willing to embrace in the implementation of its
strategy are challenged and determined by the Board. The Chairman is responsible for ensuring
that the Board implements, maintains and communicates effective corporate governance
processes and for promoting a culture of openness and debate designed to foster a positive
governance culture throughout the Company.
The Board has considered how each principle is applied and provides below an explanation of
the approach taken in relation to each and how they support the Company’s medium to long-
term success.
The Board considers that it does not depart from any of the principles of the QCA Code and
there have been no corporate governance matters in the previous year.
Charles Smith
Chairman
Date: 10 January 2022
Governance
15
Corporate Governance
Statement CONTINUED
THE TEN PRINCIPLES OF THE QCA CODE
CATEGORY: DELIVER GROWTH
1
CATEGORY: DELIVER GROWTH
2
PRINCIPLE: ESTABLISH A STRATEGY AND
BUSINESS MODEL WHICH PROMOTES LONG-
TERM VALUE FOR SHAREHOLDERS.
PRINCIPLE: SEEK TO UNDERSTAND AND MEET
SHAREHOLDER NEEDS AND EXPECTATIONS.
• Shoe Zone is a footwear retailer. Its strategy is
based on three pillars:
• Digital growth
• Town Centre renewal
• Big Box expansion
• This business model has been developed
over many years and has proved successful in
both profit performance and cash generation.
Growth strategies have been limited
through the year due to lockdowns and cash
preservation strategies.
• The Chief Executive and the Finance Director
are primarily responsible for maintaining
dialogue with shareholders, supported by the
Company’s broker.
• The Chief Executive and Finance Director hold
both one-to-one and group meetings with
shareholders and the investing community
following the announcement of the annual and
interim results. The Chairman also attends a
number of these group meetings.
• Following these meetings, the Company’s
brokers provide independent and anonymised
feedback to the Board on shareholders’ views.
Governance
Governance
16
16
Corporate Governance
Statement CONTINUED
CATEGORY: DELIVER GROWTH
3
CATEGORY: DELIVER GROWTH
4
PRINCIPLE: TAKE INTO ACCOUNT WIDER
STAKEHOLDER AND SOCIAL RESPONSIBILITIES
AND THEIR IMPLICATIONS FOR LONG TERM
SUCCESS.
PRINCIPLE: EMBED EFFECTIVE RISK
MANAGEMENT, CONSIDERING BOTH
OPPORTUNITIES AND THREATS, THROUGHOUT
THE ORGANISATION.
• The key risks and the approach taken to
mitigate these is detailed in the Annual Report
and Accounts. The key risks identified are
listed in the Annual Report elsewhere.
• Shoe Zone takes its wider stakeholder
population into account within its decision
making processes.
• Examples of this are:
• The Shoe Zone supplier manual outlines
minimum working practices that we expect
from all our suppliers.
• The buying team, and in some instances the
Chairman and Chief Executive, visit every
factory that supplies us with manufactured
product.
• We hold employee forums for the
Distribution Centre and in particular, prior
to changing shift patterns and afterwards
to understand the implementation and
any ongoing issues that it may have been
caused.
• We are working with suppliers to eliminate
plastic materials from the supply chain as far
as possible. Most recently we have replaced
plastic ‘shoe shapers’ with biodegradable
cardboard ones.
• We collect all plastic and cardboard waste from
our stores. Where possible, we reuse or recycle
cardboard waste and recycle plastic waste
through a third party.
• Shoe Zone is committed to eliminating all
forms of slavery and the company website
outlines the actions we are taking to ensure
that we are supportive of the wider movement.
Governance
Governance
17
17
Corporate Governance
Statement CONTINUED
5
CATEGORY: MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
6
CATEGORY: MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
PRINCIPLE: MAINTAIN THE BOARD AS A WELL-
FUNCTIONING, BALANCED TEAM LED BY THE
CHAIR.
PRINCIPLE: ENSURE THAT BETWEEN THEM
THE DIRECTORS HAVE THE NECESSARY UP-TO-
DATE EXPERIENCE, SKILLS AND CAPABILITIES.
• The Board consists of three Executive Directors
and two Non-executive Directors.
• Please refer to the Investor Relations section of
the website for further details of the Directors.
• The Executive Chairman is Charles Smith,
who is also a major shareholder with 23.87%
shareholding.
• The Senior non-executive director is Victoria
Norrish, who is the Chair of the Audit
Committee.
• The remaining Executive board members are
Anthony Smith, Chief Executive and Terry
Boot, Finance Director. Anthony Smith is the
largest shareholder with 29.85%.
• The remaining Non-executive Director is
Malcolm Collins. He is Chairman of the
Remuneration Committee.
• Within the Executive Directors, Anthony
Smith is a full time Director. Charles Smith is
employed for four days a week.
• The Non-executive Directors are selected
for the specific skills and expertise that they
contribute to the business. This ranges from
experience of accounting, footwear retail and
supply chain expertise.
Governance
Governance
18
18
Corporate Governance
Statement CONTINUED
7
CATEGORY: MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
8
CATEGORY: MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
PRINCIPLE: EVALUATE BOARD PERFORMANCE
BASED ON CLEAR AND RELEVANT
OBJECTIVES, SEEKING CONTINUOUS
IMPROVEMENT.
PRINCIPLE: PROMOTE A CORPORATE CULTURE
THAT IS BASED ON ETHICAL VALUES AND
BEHAVIOURS.
• The Company seeks to promote an open
culture where all employees feel that they
contribute to the ongoing success of the
business.
• We operate a non-contractual profit share
scheme that rewards all employees, with
service greater than one year, based on the
overall company profit performance.
• The Executive Board consists of Anthony
Smith, Charles Smith and Terry Boot.
• Within the organisation there is also a wider
Management Team that has functional
responsibility for the business.
• The Board is constantly reviewing its own
performance and that of the Management
Team including its relevance and constitution
as the business develops and grows. We look
to identify those individuals who excel in their
role and develop them through appointment
to the Management Team and measure their
success as part of the Group and the wider
group.
Governance
Governance
19
19
Corporate Governance
Statement CONTINUED
9
10
CATEGORY: BUILD TRUST
CATEGORY: MAINTAIN A DYNAMIC
MANAGEMENT FRAMEWORK
PRINCIPLE: MAINTAIN GOVERNANCE AND
PROCESSES THAT ARE FIT FOR PURPOSE AND
SUPPORT GOOD DECISION-MAKING BY THE
BOARD.
PRINCIPLE: COMMUNICATE HOW THE
COMPANY IS GOVERNED AND ITS
PERFORMANCE BY MAINTAINING A DIALOGUE
WITH SHAREHOLDERS AND OTHER RELEVANT
STAKEHOLDERS.
• All shareholders are invited to make use of
the Group’s Annual General Meeting to raise
any questions regarding the management or
performance of the Company.
• Following the announcement of results
the Company will also offer the chance for
shareholders to meet the Chairman, Chief
Executive and Finance Director to discuss
performance and future plans.
• All voting results for the Annual General
Meeting on resolutions are available on the
website and the reports of Board Committees
are set out in the Annual Report and Accounts
each year.
• The Board meets around six times per year.
Agendas and papers are issued in advance of
the meeting in order to allow each member
to prepare thoroughly. All Non-Executive
Directors are expected to attend these
meetings.
• The Remuneration Committee and Audit
Committee meet at least twice per year and
their reports are contained in the Annual
Report and Accounts.
• Draft minutes are circulated for all meetings
and following feedback, approved by the
various boards at their next meeting.
• Non-Executive Directors are also called on
where their expertise or advice would benefit
the Company, such as pension negotiations,
selection of a new audit partner, product range
reviews or the selection of other advisors.
• Management meetings are also held
periodically with other key senior members
of the Company who hold functional
responsibility. Information is disseminated
through this group to the wider business and
updates and feedback sought on key topics
and areas.
Governance
20
Corporate Governance
Statement CONTINUED
The Board
The Board comprises three Executive Directors (including the Chairman) and two Non-Executive
Directors. The Board composition meets the recommendations of the QCA guidelines.
The Board is committed to maintaining high standards of corporate governance and to being
transparent about its arrangements.
The key responsibilities of the Board are:
• the overall management of the Group;
• approval of corporate strategy;
• approval of income, expenditure and capital budgets;
• oversight of operations ensuring adequate systems of internal control and risk
management are in place;
• to review business performance against the objectives that it has set;
• to monitor the integrity of the financial statements and approve the annual and interim
reports;
• approval of the dividend policy;
• determining changes to the structure and composition of the Board;
• determining remuneration policy; and
• approval of communications with shareholders and the market.
Details of each of the Directors are given in their biographies on pages 23.
Appointments to the Board and re-election
The Company is governed by its Articles of Association (‘Articles’). Under the Articles the Board
has the power to appoint a Director during the year but any person so appointed must stand
for election at the next Annual General Meeting (‘AGM’). The Articles require that each Director
retires and seeks re-election by the members every three years. The QCA Code recommends that
Directors should be subject to annual re-election by members and, in line with the Company’s
intention to apply certain principles of the UK Code, each Director will stand for re-election at
each of the Company’s AGMs.
Governance
21
Corporate Governance
Statement CONTINUED
Board committees
The Board has established a Remuneration Committee and an Audit Committee. Due to the
nature and size of the Group, the Directors have decided that issues concerning the nomination
of Directors will be dealt with by the Board rather than a nomination committee.
Membership of the two Board Committees is comprised of all independent Non-Executive
Directors. Each Board Committee has approved Terms of Reference setting out their
responsibilities. The Terms of Reference were approved by the Board during the year. All of the
Board Committees are authorised to obtain, at the Company’s expense, professional advice on
any matter within the Terms of Reference and to have access to sufficient resources to carry out
their duties.
The Audit Committee is chaired by Victoria Norrish. The committee meets as necessary to
monitor the Group’s risk management and internal control systems and is also concerned with
any major accounting and audit related issues. Executive Directors and senior management are
responsible for managing the risk framework and internal control systems and must report on
their effectiveness to the Audit Committee.
Details of the duties of the Remuneration Committee are set out in the Remuneration report on
page 24.
Governance
22
Board of Directors
Chairman
CHARLES SMITH
Charles joined Shoe Zone in 1998, becoming Chief Operating Officer in 2001. He was
appointed Chairman in January 2020. Charles is a founder and Trustee of the
Shoe Zone Trust.
Chief Executive
ANTHONY SMITH
Anthony joined Shoe Zone in 1993 as Marketing Manager before becoming Chief Executive in
1997. Anthony was appointed Chairman in June 2016. He was re-appointed as Chief Executive
in August 2019. Anthony is a founder and Trustee of the Shoe Zone Trust.
Finance Director
TERRY BOOT
Terry Joined Shoe Zone in March 2021 as Finance Director. He was most recently the Finance
Director and then CEO at the Company of Master Jewellers, having previous been in the
footwear retailing industry for 26 years. From 1998 to 2016 he was the Finance Director at
Brantano and Jones Bootmaker.
Company Secretary
CATHERINE BOWEN
Catherine joined Shoe Zone in September 2018 as General Counsel and was appointed
Company Secretary in September 2019. Catherine qualified as a solicitor in 2001 and has
extensive legal experience in the retail sector, and is a specialist in landlord and tenant matters.
Catherine also taught, part time, on the Law Degree at the University of Leicester for eight
years, while continuing to practice.
Non-executive Director
MALCOLM COLLINS
Malcolm joined as a Non-Executive Director in June 2016. Malcolm was most recently Group
Buying and Design Director for footwear and accessories at New Look, overseeing the Group’s
£550m footwear division. Prior to Malcolm’s 16 years at New Look, he worked for 23 years at
Clarks Shoes including 13 years as Women’s Footwear Buyer.
Non-executive Director
VICTORIA NORRISH
Victoria joined as a Non-Executive Director in August 2020. Victoria joined Blue Light Card
Limited in January 2021 as Chief Financial Officer. She was previously at TheWorks.co.uk plc
from 2008 to 2020 as Supply Chain Director (January 2019 to December 2020), Strategic
Development Director (July 2018 to January 2019) and Finance Director (November 2008 to
July 2018). She commenced her accountancy career as an auditor with KPMG and
Godkin & Co.
Governance
23
Remuneration Report
This is the Company’s eighth Directors’ Remuneration
Report since it listed on AIM in May 2014.
The Remuneration Committee consists of the Non-executive Directors. Malcolm Collins is the
Chairman and Victoria Norrish also serves on the Committee.
Anthony Smith and Charles Smith may attend the Committee meetings by invitation.
Duties
The main duties of the Remuneration Committee are set out in its Terms of Reference adopted
25 April 2014 and include:
• responsibility for agreeing, with the Board, the framework or broad policy for the
remuneration of all Executive Directors of the Company, including pension rights,
compensation payments bonuses, incentive payments, share options and benefits in kind;
• obtain reliable, up-to-date information about remuneration in other companies of
comparable scale and complexity and market practice generally;
• be exclusively responsible for selecting any remuneration consultants who advise the
Committee;
• approve the design and determine targets for any performance-related pay schemes
operated by the Company and approve the total annual payments made under such
schemes;
• monitor the level and structure of remuneration for senior management and note annually
the remuneration trends across the Group;
• review the design and implementation of all share incentive plans for approval by the
Board and shareholders. For such plans, determine each year whether awards will be
made, and if so, the overall amount of such awards;
• ensure the contractual terms on termination, and any payments made, are fair to
the individual and the Company, and in accordance with any legal and regulatory
requirements;
• oversee any major change in employee benefit structures throughout the Group; and
• agree the policy for authorising claims for expenses from the Directors.
Governance
Governance
24
24
Remuneration Report
CONTINUED
Directors and Directors’ interests
The Directors listed below all served through the year. Their interests in the issued share capital of the
Company as at the date of this report were as follows:
Executive Directors
Anthony Smith
Charles Smith
Non-executive Directors
Victoria Norrish
Malcolm Collins
Number of
ordinary
shares
Percentage
of issued
share capital
14,926,557
(1)
11,933,694
(2)
Nil
Nil
29.85%
23.87%
Nil
Nil
(1)
(2)
The registered holder of these shares is Slawston Investments Limited, an entity jointly owned by Anthony
and Catherine Smith
The registered holder of these shares is Sheepy Magna Investments Limited, an entity jointly owned by
Charles and Sian Smith
Governance
Governance
25
25
Remuneration Report CONTINUED
Directors’ Remuneration
Directors’ remuneration information for those individuals who have served as a Director for the year are
presented below. The information presented in respect of these Directors is for the full financial year.
Individual
Financial
year
Basic
Salary and
fees
Profit Share
(Bonus)
LTIP paid
within year
Benefits
Pension
Total
£
£
£
£
£
Executive Directors
Anthony Smith
FY21
350,000
175,000
FY20
350,000
-
Charles Smith
FY21
224,000
112,000
FY20
224,000
-
Terry Boot
Peter Foot*
Jonathan Fearn*
Non–executive Directors
Malcolm Collins
Victoria Norrish
Jeremy Sharman*
Charlie Caminada*
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
69,590
35,788
-
50,199
30,403
-
101,896
19,000
19,334
28,500
2,828
-
27,000
-
16,613
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
FY21
741,289
322,788
FY20
772,074
-
* Resigned before date of signing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,957
43,464
26,224
23,329
-
-
-
-
560,957
393,464
362,224
247,329
4,840
8,351
118,569
-
3,804
2,153
-
-
-
-
-
-
54,003
32,556
-
9,477
12,228
123,601
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
19,334
28,500
2,828
-
27,000
-
16,613
70,825
8,351
1,143,253
78,423
12,228
862,725
Governance
Governance
26
26
Remuneration Report CONTINUED
Directors’ Service contracts and employment letters
The Executive Directors have entered into service agreements with the Company with effect
from 1 May 2017 or in the case of Terry Boot his date of commencement. Salaries for the up-
coming year are set out below:
Anthony Smith
Charles Smith (1)
Terry Boot (appointed 8 March 2021)
(1) Now contracted for 4 days per week.
£
350,000
224,000
130,000
Each Executive Director’s employment will continue until terminated by either party by written
notice. The notice periods applicable are 12 months for Anthony Smith and Charles Smith and 6
months for Terry Boot. Other fixed elements of the Executive Directors’ remuneration comprise
a company car provision, life assurance and private medical insurance. Terry Boot is entitled to a
Pension Contribution of 12% basic salary.
The Company may elect to terminate the employment of each Executive Director by making a
payment in lieu of notice equal to their basic salary payable in monthly instalments.
Each of the Executive Directors has agreed to post-termination restrictions in order to protect
confidential information, trade secrets and business connections. These restrictions last for 9
months.
Malcolm Collins
Victoria Norrish
£
20,000
30,000
The remuneration report was approved by the Board.
On behalf of the Board
Malcolm Collins
Chairman of the Remuneration Committee
Date: 9 December 2021
Governance
27
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021
The Directors present their Annual Report and audited
financial statements of the Company and the Group for
the 52 weeks ended 2 October 2021.
The disclosure requirements of the Companies Act 2006 have been met by the contents of
this Directors’ Report, apart from the likely future developments in the business and existence
of stores which are included within the Strategic Report which should therefore be read in
conjunction with one another.
The Company
Shoe Zone plc (the ‘Company’) is a Company incorporated and domiciled in the UK, with the
registered company number 08961190. The company is listed on the AIM market of the London
Stock Exchange.
Share Capital
Details of the share capital of the Company are shown in note 22 of the financial statements.
The Company’s share capital consists of one class of ordinary shares. As at 2 October 2021 there
were 50,000,000 ordinary shares of £0.01 each. The authorised share capital of the Company is
unlimited.
At the AGM held on 31 March 2021, the Board was granted authority to allot shares in the
Company of up to approximately a third of the Company’s issued share capital. The Board was
also granted authority to allot further shares having an aggregate nominal value of £166,666
in connection with a pre-emptive rights issue (representing approximately a further third of the
Company’s issued share capital). At the 2022 AGM, shareholders will be asked to renew this
authority for a further year.
Directors
The Directors who held office during the year and up to the date of signing the financial
statements are listed on the directors and advisors page.
Directors’ Interests
Information about the Directors’ interests in the shares of the Company can be found in the
Directors’ Remuneration Report.
Governance
28
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Directors’ Indemnities
As permitted by the Articles of Association, the Directors have the benefit of an indemnity
provision as defined by s234 of the Companies Act 2006. The indemnity was in force throughout
the financial year and at the date of approval of the financial statements. The Group maintains
Directors’ and Officers’ liability insurance.
In accordance with the Articles of Association, all the Directors offer themselves for re-election at
the AGM, as they were appointed during the year.
Employees
The Group employed 2,854 (03 October 2020: 3,428) employees at the year end.
The Group’s policy is to actively involve its employees in the business to ensure that matters
of concern to them, including the Group’s aims and objectives and the financial and economic
factors which impact them are communicated in an open and regular manner.
The Directors are committed to delivering the highest standards of health and safety for
employees, customers and others that might be affected by the Group’s activities.
The Group is committed to employing the right people, training them well and promoting from
within wherever possible. Well trained and motivated employees are key to delivering good
service to our customers and are fundamental to the long-term success of the business.
All employees are able to contribute to the ongoing success of the business through regular
contact between management and employees. We promote equal opportunities and do not
tolerate discrimination of any kind.
Annual general meeting
The Company’s eighth AGM will be held on Tuesday 8 March 2022 at 10.00 a.m. at the Company’s
registered office at Haramead Business Centre, Humberstone Road, Leicester, Leicestershire LE1
2LH. The Notice of AGM appears on pages 96 to 102.
In light of the current pandemic and the general uncertainty on what measures may be put
in place by the UK Government restricting gathering, the Board regretfully requests that
shareholders do not attend the Annual General Meeting in person (irrespective of whether
restrictions on social gatherings are in place at the date of the Annual General Meeting). The
Annual General Meeting will be convened with the minimum quorum of shareholders required
in order to conduct the business of the Annual General Meeting and this will be facilitated by the
Company’s management.
With this in mind, shareholders are strongly encouraged to exercise their vote by appointing the
Chairman of the Annual General Meeting as their only proxy and providing voting instructions
in advance of the Annual General Meeting, in accordance with the instructions explained in the
Notes attached to this Notice of Annual General Meeting. Set out below is an explanation of
certain resolutions which will be proposed at the AGM.
Governance
29
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Appointment of Directors (resolutions 2 to 6)
The UK Corporate Governance Code recommends that directors should be subject to annual
re-election by shareholders. In line with the Company’s intention to apply certain principles
of the UK Corporate Governance Code, each Director will stand for re-election at the AGM.
Biographical details of each Director appear on page 23. The Board believes that each Director
continues to demonstrate their commitment to their role and that, collectively; the Directors’
skills complement each other and enhance the overall operation of the Board.
Political donations (resolution 9)
The Company is prohibited under the Companies Act 2006 from making donations to EU political
parties or organisations or to independent election candidates in the EU of over £5,000 a year
without shareholder approval. The Companies Act 2006 uses very broad definitions of political
donations and expenditure which may extend to normal business activities which might not be
thought of as political expenditure in the more usual sense. Activities which could be caught
include representing the Company in the business community or at special interest groups
which the Company may wish to support. In addition, the sponsorship of industry forums, the
funding of seminars and other functions to which politicians are invited may also be caught. The
Company is therefore proposing this resolution to ensure that it does not inadvertently breach
the rules whilst carrying out its normal business activities.
During its last financial year the Company made no political donations and incurred no political
expenditure. The Company does not intend to make any such donations or incur any such
expenditure this year.
Authority to allot shares (resolution 10)
By law, the Directors are not permitted to allot new shares (or to grant rights over shares)
unless authorised to do so by shareholders. Resolution 10 seeks shareholder authority to allow
the Directors to allot shares having an aggregate nominal value of £166,666 representing
approximately a third of the Company’s issued share capital on 26th January 2022. In addition,
shareholder authority is sought to allot shares having an aggregate nominal value of £333,332
in connection with a pre-emptive rights issue (representing approximately a further third of the
Company’s issued share capital on 26th January 2022
Governance
30
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Disapplication of pre-emption rights (resolutions 11 and 12)
Resolutions 11 and 12 concern the disapplication of pre-emption rights. Under the Companies
Act 2006, all shareholders are entitled to participate on a pre-emptive basis in all issues of shares
for cash, unless shareholders have authorised the Directors otherwise.
Paragraph (a) of resolution 11 gives the Directors authority to make arrangements dealing with
certain legal, regulatory and practical matters in connection with a pre-emptive issue of shares.
Paragraph (b) of resolution 11 gives the Directors the necessary authority to either allot shares
or sell shares held in treasury for cash on a non pre-emptive basis up to an aggregate nominal
amount of £25,000 (being 2,500,000 shares). This is equivalent to 5% of the issued share capital
of the Company on 26th January 2022. This resolution also disapplies statutory pre-emption
rights to the extent necessary to facilitate rights issues.
Resolution 12 is being proposed as a separate resolution to authorise the Directors to allot a
further 5% of issued ordinary share capital of the Company otherwise than in connection with a
pre-emptive offer for the purposes of financing a transaction (or refinancing within six months of
the transaction) which the Directors determine to be an acquisition or other capital investment
contemplated by the Pre-emption Group’s Statement of Principles (the ‘Pre-emption Group
Principles’).
These disapplication authorities are in line with the authority sought at last year’s AGM and
with institutional shareholder guidance, in particular the Pre-emption Group Principles. The
Pre-emption Group Principles were updated in March 2015 and provide the Company with
greater flexibility to undertake non-pre-emptive issuances in connection with acquisitions and
specified capital investments by allowing the Company to allot shares with a nominal value of up
to £25,000 (representing 5% of the issued share capital of the Company as at 26th January 2022)
for cash where that allotment is in connection with an acquisition or specified capital investment
(as described in the Pre-emption Group Principles) which is announced at the same time as the
allotment, or which has taken place in the preceding six-month period and is disclosed in the
announcement of that allotment.
The Board does not intend to allot shares for cash on a non-pre-emptive basis above 7.5% of
the total issued share capital of the Company over a rolling three-year period without consulting
shareholders first.
The Directors consider that it is appropriate for these authorities to be granted to preserve
maximum flexibility for the future. However, the Directors currently have no plans to exercise
these powers. The authorities sought will apply until the conclusion of the next AGM of the
Company to be held in 2023 or 8 March 2023, whichever is earlier.
Governance
31
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Authorisation for the Company to purchase its own shares
(Resolution 13)
Resolution 13 seeks authority for the Company to make market purchases (within the meaning of
section 693(4) of the Companies Act 2006) of the Company’s ordinary shares on such terms and
in such a manner as the Directors may determine from time to time, subject to the limitations set
out in the resolution. If Resolution 13 is passed, the Company will be authorised to purchase up
to a maximum of 5,000,000 ordinary shares, representing approximately 10% of the Company’s
issued ordinary share capital as at 26th January 2022. Resolution 13 also sets out the minimum
and maximum price that the Company may pay for purchases of its ordinary shares.
If Resolution 13 is passed, the authority for the Company to purchase its ordinary shares will
remain effective until the conclusion of the next AGM of the Company to be held in 2023 or 8
March 2023, whichever is earlier.
The Directors will only exercise this buy-back authority, after careful consideration, when it is
in the best interests of the shareholders generally. Any purchases would be financed out of
distributable profits and shares purchased would either be cancelled (and the number of shares
in issue reduced accordingly) or held as treasury shares, with a view to using any such shares held
in treasury for future distributions to employees.
Form of proxy
Please note you will not receive a form of proxy for the March 2022 AGM in the post. You
may vote online which you can do at www.signalshares.com. To register you will need your
Investor Code, which can be found on your share certificate. For shares held through CREST,
proxy appointments may be submitted via the CREST proxy voting system. Otherwise, you may
request a hard copy proxy form directly from our Registrars, Link Group, on 0371 664 0300
if calling from the United Kingdom, or +44(0)371 664 0300 if calling from outside the United
Kingdom.
Calls are charged at the standard geographical rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate. Lines are open between
9.00 a.m. – 5.30 p.m. Monday to Friday excluding public holidays in England and Wales.
In normal circumstances voting online or appointing a proxy will not preclude a shareholder from
attending the AGM and voting in person. However please note the restrictions on attendance
at the AGM this year in light of the ongoing COVID-19 guidance. As a result, shareholders are
encouraged to appoint a proxy.
All online votes or proxy appointments should be submitted so as to be received no later than
10.00 a.m. on 4 March 2022.
Governance
32
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Recommendation
The Board considers that the resolutions to be proposed at the AGM are in the best interests
of the Company and are most likely to promote the success of the Company for the benefit of
its members as a whole. The Directors recommend that shareholders vote in favour of each
resolution, as the Directors intend to do in respect of their own shareholdings.
External auditor
Cooper Parry Group Limited have issued their independent report on these financial statements
to the shareholders of Shoe Zone plc. The report can be found on pages 37 to 43.
The auditor, Cooper Parry Group Limited has indicated their willingness to continue in office and
a resolution that they be re-appointed will be proposed at the AGM.
Financial risk management
The Group’s operations expose it to a variety of financial risks that include the effects of liquidity
risk, foreign currency risk and interest rate risk. The Group has in place a risk management
programme that seeks to limit the adverse effects on the financial performance of the Group
by monitoring the management of net cash, and the related finance income and costs. As the
Group has both interest bearing assets and interest bearing liabilities, management maintain a
close monitoring of the respective balances to ensure any interest rate risk is managed.
The Group does not make significant use of derivative financial instruments but does use forward
currency contracts when management consider this to be appropriate. External expert advice
is sought from the Group’s bankers and relevant advisors on the suitability of these currency
contracts in respect of the timings and rate. The Group has no exposure to equity securities.
Limited credit risk exposure exists given the high level of cash transactions through the store
network. Where credit risk arises management have procedures in place to assess the level of risk
to be taken, with approval by the Directors for significant credit transactions. Further information
can be found in note 3 to the financial statements.
Environment
The vast majority of our stores in England, Wales and Scotland have a requirement to ensure that
all packaging and store waste is returned to our distribution centre to be recycled and re-used.
Governance
33
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Streamlined Energy and Carbon Reporting (SECR)
Energy consumption breakdown (kWh):
Electricity
Natural gas
Transport fuel
Other fuels
Totals
Greenhouse gas emissions (tCO2e):
From combustion of fuel
Natural gas
Transport fuel for company vehicles
Transport fuel for rental vehicles
Other fuels
Subtotal
From Purchased Electricity, Steam, Heat & Cooling
From Other Activities inc. Process & Fugitive
Subtotal
Total gross emissions
Renewable electricity
Carbon offsets
Domestic carbon units
Total net emissions
Intensity ratios
Annual MWh per £m Turnover
Annual tCO2e per £m Turnover
2021
8,925
3,105
3,056
-
15,086
568.66
722.60
-
-
1,291.26
1,895.18
5.85
1,901.03
3,192.29
-
-
-
2020
13,642
2,301
4,840
-
20,783
423.06
1,233.57
48.29
-
1,704.92
3,180.57
23.53
3,204.10
4,909.02
-
-
-
3,192.29
4,909.02
126.63
26.79
169.57
30.45
The Directors are pleased to note the significant improvement in the intensity ratio’s, however it should be noted
that during the COVID 19 pandemic government restrictions on trade have prevented direct comparison.
The Group continues various strategies to improve our carbon performance these include:
-
-
Working with our suppliers to review plastic and card used in packaging and when labelling our products
Reviewing and increasing our recycling strategies including initiatives at all of our retail outlets as well as
our Distribution Centre and head office sites.
Instigate a policy review into single use plastics
Review of delivery schedules to all of our stores to further improve efficiency and to reduce deliveries and
idle time.
Review into the use of both hydrogen powered and electric HGV/car vehicles
-
-
-
Governance
34
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
Going Concern
The Directors consider that the business is a going concern and that it is appropriate to prepare
the financial statements on a going concern basis. In reaching this conclusion, the Directors have
assessed the Group’s current performance and position and factors that may affect the Group’s
future prospects.
The Group’s financial position is satisfactory despite the current trading environment. It also has
in place a £3.0m overdraft facility. During the pandemic the company took a COVID-19 Large
Business Interruption Loan Scheme (CLBILS) loan of £15.0m, this requires the Group to comply
with certain financial covenants, these have been met during the year and since year end. The
Directors have reviewed forecasts and projections and consider that the Group has adequate
banking facilities and cash resources to meet its operational and capital commitments.
With the prospect of high street stores reopening following the initial success of the Government
vaccine programme, we look forward to increased demand returning to our high street stores
combined with maintaining the growth levels of our digital presence.
Digital performance growth combined with the satisfactory cash position gives the Directors a
reasonable basis on which to satisfy themselves that the business is a going concern.
Events after the year-end
Between 2 October 2021 and the date of this report, there have been no material events that
need to be reported in the financial statements. The Strategic Report, the Directors’ Report and
the Remuneration Report were approved by the Board.
Directors’ responsibilities statement
The Directors are responsible for preparing the strategic report, the Director’s report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under
that law the Directors have elected to prepare the group financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union
and the company financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company and of the profit or loss
of the group for that period. The Directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for companies trading securities on the
Alternative Investment Market.
Governance
35
DIRECTORS’ REPORT
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the
European Union, subject to any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the company’s transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the financial statements comply
with the requirements of the Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are
made available on a website. Financial statements are published on the company’s website in
accordance with legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other jurisdictions. The maintenance
and integrity of the company’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein.
Disclosure of information to auditor
Each Director in office at the date of approval of this report has confirmed that:
• So far as they are aware, there is no relevant audit information of which the Company’s
auditors are unaware; and
• They have taken all reasonable steps that he ought to have taken as a Director in order to
make himself aware of any relevant audit information and to establish that the Company’s
auditor are aware of that information.
Approved by the Board and signed on its behalf:
Anthony Smith
Chief Executive
Date: 10 January 2022
Governance
36
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC
Opinion
We have audited the financial statements of Shoe Zone plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the 52 weeks ended 2 October 2021 which comprise the consolidated
income statement, the consolidated statement of total comprehensive income, the consolidated
statement of financial position, the consolidated statement of changes in equity, the consolidated
statement of cash flows, the company statement of financial position, the company statement
of changes in equity and the related notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been applied in the preparation
of the parent Company financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the
parent Company’s affairs as at 2 October 2021 and of the Group’s profit for the 52 weeks
then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union;
• the parent Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial statements section of our report. We
are independent of the group and parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Governance
37
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC CONTINUED
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Director’s use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the director’s assessment of the entity’s ability to continue to adopt the going
concern basis of accounting included:
• Reviewing management’s cash flow forecasts for a period of 12 months from the date of
approval of these financial statements;
• Applying reasonable “worst case” sensitives to management’s forecasts and assessing
remaining cash headroom within those scenarios; and
• Review of results post year end to the date of approval of these financial statements and
assessment against original budgets.
From our work we noted that the Group has significant cash balances and forecasts support
that the Group will continue to be able to meet its liabilities as they fall due. Based on the
work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Group’s ability
to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue. Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) we identified, including
those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Carrying value and impairment of Property, plant and
equipment and Right-of-use assets in relation to the store
portfolio
Matter
The Group has significant property, plant and equipment and right- of- use assets in relation to
the portfolio of stores it operates. The Group’s assessment of the carrying value of assets relating
to each store requires significant judgement, in particular regarding cash flows, growth rates and
discount rates.
Governance
38
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC CONTINUED
Response
• We obtained information on performance by store in order to assess for indication of
impairment.
• We considered historical trading performance by comparing recent growth rates of both
revenue and operating profit/loss by store.
• We assessed the appropriateness of the assumptions concerning growth rates and inputs
to the discount rates against latest market expectations.
• We performed sensitivity analysis to determine whether an impairment would be required
if costs increase at a higher than forecast rate.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that,
individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of these financial statements.
We apply the concept of materiality in planning and performing our audit, in determining the
nature, timing and extent of our audit procedures, in evaluating the effect of any identified
misstatements, and in forming our audit opinion.
The materiality for the Group financial statements as a whole was set at £676,000. This has been
determined with reference to the benchmark of the Group’s profit before tax which we consider
to be an appropriate measure for a Group of companies such as these. Materiality represents
7.5% of group profit before tax.
The materiality for the Parent Company financial statements as a whole was set at £11,000. This
has been determined with reference to the benchmark of the Parent Company’s loss before tax
which we consider to be an appropriate measure for a parent company such as this. Materiality
represents 7.5% of the parent Company loss before tax.
An overview of the scope of our audit
We adopted a risk based audit approach. We gained a detailed understanding of the Group’s
business, the environment it operates in and the risks it faces.
The key elements of our audit approach were as follows:
Our Group audit scope focused on the Group’s principal trading subsidiary, Shoe Zone Retail
Limited, which was subject to a full scope audit. Together with the parent company and its
group consolidation, which was also subject to a full scope audit, these entities represent the
principal business units of the Group and account for 100% of the Group’s revenue, 100% of
the Group’s profit before tax and 97% of the Group’s total assets. In performing our testing we
utilised performance materiality of £575,000, equating to 85% of materiality.
In order to address the matters described in the Key audit matters section we performed focused
audit procedures over these areas, including reference to external market data and publicly
available market information in relation to assumptions used.
Governance
39
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC CONTINUED
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 our 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 this other information,
we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies
Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial 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 group and the parent company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have
not been received from branches not visited by us; or
• the Group or Parent company financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Governance
40
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC CONTINUED
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 24, the Directors
are responsible for the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the group’s and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group or the Parent 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 financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities,including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below:
Our assessment focused on key laws and regulations the Group has to comply with and areas
of the financial statements we assessed as being more susceptible to misstatement. These key
laws and regulations included but were not limited to compliance with the Companies Act 2006,
International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom, and
relevant tax legislation.
We are not responsible for preventing irregularities. Our approach to detecting irregularities
included, but was not limited to, the following:
Governance
41
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC
CONTINUED
• Obtaining an understanding of the legal and regulatory framework applicable to the Group
and the parent company and determined that the most significant which are directly relevant
to specific assertions in the financial statements are those related to the financial reporting
framework, being international accounting standards in conformity with the Companies Act
2006;
• Obtaining an understanding of how the Group is complying with those legal and regulatory
frameworks by making enquiries of management, those responsible for legal and compliance
procedures and the Company Secretary. We corroborated our enquiries through our review
of board minutes;
• Obtaining an understanding of the entity’s policies and procedures and how the entity has
complied with these, through discussions and sample testing of controls;
• Obtaining an understanding of the entity’s risk assessment process, including the risk of
fraud;
• Designing our audit procedures to respond to our risk assessment; and
• Performing audit testing over the risk of management override of controls, our audit
procedures involved:
• testing of journal entries and other adjustments for appropriateness, with a focus
on manual journals including those with unusual account combinations and those
posted directly to the consolidation that increased revenue or that reclassified costs
from the profit and loss account to the balance sheet;
• evaluating the business rationale of significant transactions outside the normal
course of business;
• challenging assumptions and judgements made by management in its significant
accounting estimates, specifically those in relation to the dilapidation provision,
the defined benefit pension scheme deficit and the value of the derivative financial
instruments.
• including testing of journal entries with a focus on material manual journals and other
adjustments for appropriateness, evaluating the business rationale of significant
transactions outside the normal course of business, and reviewing accounting
estimates for bias, specifically in relation to the dilapidation provisions, the defined
benefit pension scheme deficit and the value of the derivative financial instruments.
• These audit procedures were designed to provide reasonable assurance that the financial
statements were free from fraud or error. However, detecting irregularities that result
from fraud is inherently more difficult that detecting those that result from error, as those
irregularities that result from fraud may involve collusion, deliberate concealment, forgery,
or intentional misrepresentations. Also, the further removed non-compliance with laws and
regulations is from events and transactions reflected in the financial statement, the less
likely we could become aware of it.
• The engagement partner assessed whether the engagement team collectively had the
appropriate competence and capabilities to identify and recognise non-compliance with
laws and regulations through the following:
• Understanding of, and practical experience with, audit engagement of a similar
nature and complexity, though appropriate training and participation; and
• Knowledge of the industry in which the client operates.
Governance
42
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHOE ZONE PLC
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that
we might state to the parent company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the parent company and the
parent company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Catherine Kelly (Senior Statutory Auditor)
For and on behalf of Cooper Parry Group Limited
Chartered Accountants and Statutory Auditor
Sky View
Argosy Road
East Midlands Airport
Castle Donington
Derby
DE74 2SA
Date: 10 January 2022
Governance
43
CONSOLIDATED INCOME STATEMENT FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
Note
4, 8
5
5
5
9
9
10
28
Revenue
Cost of sales
Gross profit
Administration expenses
Distribution costs
Profit/(Loss) from operations
Finance income
Finance expense
Profit/(Loss) before taxation
Taxation
Profit/(Loss) attributable to equity
holders of the parent
Profit/(Loss) Earnings per Share –
basic and diluted
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
119,142
(86,667)
32,475
(16,962)
(4,499)
11,014
-
(1,558)
9,456
(2,442)
7,014
14.03p
£’000
122,568
(117,332)
5,236
(13,928)
(4,018)
(12,710)
10
(1,901)
(14,601)
2,698
(11,903)
(23.81p)
Financials
44
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE
INCOME FOR THE 52 WEEKS ENDED 2 OCTOBER 2021
Note
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Profit/(Loss) for the period
Items that will not be reclassified subsequently to
the income statement
Remeasurement losses on defined benefit pension
scheme
Movement in deferred tax on pension schemes
25
21
Items that will be reclassified subsequently to the
income statement
Fair value movements on cash flow hedges
Tax on cash flow hedges
Other comprehensive income / (expense) for the
period
Total comprehensive income for the period
attributable to equity holders of the parent
£’000
7,014
3,379
761
(190)
56
4,006
£’000
(11,903)
(2,114)
899
(2,124)
363
(2,976)
11,020
(14,879)
Financials
45
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 2 OCTOBER 2021
Note
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Registered Number : 08961190
Assets
Non-current assets
Property, plant and equipment
Right of use assets
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Derivative financial liability
Bank Loan
Provisions
Corporation tax liability
Total current liabilities
Non-current liabilities
Lease liabilities
Bank Loan
Provisions
Employee benefit liability
Total non-current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the company
Called up share capital
Merger reserve
Cash flow hedge reserve
Retained earnings
Total equity and reserves
12
13
21
14
15
26
17
13
16
18
19
13
18
19
25
22
£’000
14,227
30,884
3,220
48,331
25,131
5,457
19,015
49,603
97,934
(16,440)
(17,035)
(591)
(4,400)
(1,698)
(773)
(40,937)
(25,942)
-
(1,728)
(5.909)
(33,579)
(74,516)
23,418
500
2,662
(250)
20,506
23,418
£’000
16,967
42,387
5,617
64,971
26,698
2,735
13,266
42,699
107,670
(17,316)
(19,914)
(105)
(1,944)
(1,471)
(137)
(40,887)
(37,475)
(5,056)
(1,260)
(10,594)
(54,385)
(95,272)
12,398
500
2,662
(116)
9,352
12,398
The financial statements were approved and authorised for issue by the Board of Directors and were
signed on its behalf by:
Anthony Smith, Chief Executive, Date: 10 January 2022
Financials
46
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 2 OCTOBER 2021
Share
capital
Merger
reserve
Cash flow
hedge
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
£’000
500
2,662
1,645
22,470
27,277
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,903)
(11,903)
(2,114)
(2,114)
(2,124)
-
(2,124)
363
899
1,262
(1,761)
(13,118)
(14,879)
-
-
-
-
-
-
At 6 October 2019
Loss for the year
Defined benefit pension movements
Cash flow hedge movements
Deferred tax on other comprehensive income
Total comprehensive income for the period
Dividends paid during the year (note 11)
Total contributions by and distributions to
owners
At 3 October 2020
500
2,662
(116)
9,352
12,398
Impact on transition to IFRS 16 (note 13)
-
-
-
-
-
At 4 October 2020
Profit for the year
Defined benefit pension movements
Cash flow hedge movements
Deferred tax on other comprehensive income
Total comprehensive income for the period
Dividends paid during the year (note 11)
Total contributions by and distributions to
owners
500
2,662
(116)
9,352
12,398
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(190)
56
7,014
7,014
3,379
3,379
-
761
(190)
817
(134)
11,154
11,020
-
-
-
-
-
-
At 2 October 2021
500
2,662
(250)
20,506
23,418
Share capital comprises the nominal value of shares subscribed for.
The merger reserve has arisen as a result of the application of merger accounting to the group
reorganisation on 26 March 2014.
The cash flow hedge reserve comprises of gains/losses arising on the effective portion of hedging
instruments and is carried at fair value in a qualifying cash flow hedge.
Retained earnings are all other net gains and losses and transactions with owners (e.g. dividends) not
recognised elsewhere.
Financials
47
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
Note
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Operating activities
(Profit/(Loss) after tax
Corporation tax
Finance income
Finance expense
Depreciation of property, plant and equipment
Fixed asset impairment and loss on disposal of property,
plant and equipment
Right-of-use asset profit on disposal, depreciation and
impairment
Pension contributions paid
Increase in trade and other receivables
Decrease in foreign exchange contract
Decrease in inventories
Decrease in trade and other payables
Increase in provisions
Cash generated from operations
Net corporation tax paid
Net cash flows from operating activities
Investing activities
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
New secured loan repayable by instalments
Repayments of secured loan
Capital element of lease repayments
Interest paid
Dividends paid during the year
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
12
12
13
25
15
16
14
17
19
10
12
18
18
11
26
£’000
7,014
2,442
-
1,558
3,144
1,001
15,860
(1,500)
29,519
(2,722)
486
1,567
(816)
694
(791)
28,728
1,353
30,081
(1,405)
-
(1,405)
-
(2,600)
(20,037)
(290)
-
(22,927)
5,749
13,266
19,015
£’000
(11,903)
(2,698)
(10)
1,901
3,545
4,642
23,998
(1,466)
18,009
(810)
336
2,184
(5,498)
1,646
(2,142)
15,867
(283)
15,584
(2,809)
10
(2,799)
10,000
(3,000)
(17,719)
(217)
-
(10,936)
1,849
11,417
13,266
Financials
48
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
1. ACCOUNTING POLICIES
General information
Shoe Zone plc (the ‘Company’) is a public company incorporated and domiciled in England and
Wales. The registered office is at Haramead Business Centre, Humberstone Road, Leicester, LE1
2LH. The registered number of the Company is 08961190.
The Company and its subsidiaries’ (collectively the Group) principal activity is footwear retailing.
Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set
out below. The policies have been consistently applied for the 52 weeks ended 2 October 2021.
These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards and Interpretations (collectively IFRSs) issued by the International
Accounting Standards Board (IASB) as adopted by the European Union (‘adopted IFRSs’) and
those parts of the Companies Act 2006 that are applicable to companies that prepare financial
statements in accordance with IFRS.
The consolidated financial statements have been prepared on a going concern basis and under
the historical cost convention, as modified for the revaluation of certain financial assets and
financial liabilities at fair value.
The preparation of financial statements in compliance with adopted IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgement in
applying the Group’s accounting policies. The areas where significant judgements and estimates
have been made in preparing the financial statements and their effect are disclosed in note 2.
The consolidated financial statements are presented in Sterling, which is also the Group’s
functional currency.
Amounts are rounded to the nearest thousand, unless otherwise stated.
Financials
49
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
1. ACCOUNTING POLICIES
CONTINUED
Basis of consolidation
The consolidated financial statements incorporating the financial statements of Shoe Zone plc
and its subsidiary undertakings are all made up to 2 October 2021. The results for all subsidiary
companies are consolidated using the acquisition method of accounting.
Where the Company has control over an investee, it is classified as a subsidiary. The Company
controls an investee if all three of the following elements are present: power over the investee,
exposure to variable returns from the investee, and the ability of the investor to use its power to
affect those variable returns. Control is reassessed whenever facts and circumstances indicate
that there may be a change in any of these elements of control.
De-facto control exists in situations where the Company has the practical ability to direct the
relevant activities of the investee without holding the majority of the voting rights. In determin-
ing whether de-facto control exists the company considers all relevant facts and circumstances,
including:
• The size of the Company’s voting rights relative to both the size and dispersion of other
parties who hold voting rights.
• Substantive potential voting rights held by the company and by other parties.
• Other contractual arrangements.
• Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries
(‘the Group’) as if they formed a single entity. Intercompany transactions and balances between
group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using
the acquisition method. In the statement of financial position, the acquiree’s identifiable assets,
liabilities and contingent liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated income statement from
the date on which control is obtained. They are deconsolidated from the date on which control
ceases.
Going Concern
The Directors consider that the business is a going concern and that it is appropriate to prepare
the financial statements on a going concern basis. In reaching this conclusion, the Directors have
assessed the Group’s current performance and position and factors that may affect the Group’s
future prospects.
The Group’s financial position is strong with healthy positive cash balances. It also has in place
a £3.0m overdraft facility. During the pandemic the Group, in the prior year, took a CLBILS loan
of £12.0m, this requires the Group to comply with certain financial covenants, these have been
met during the year and since year end. The Directors have reviewed forecasts and projections
and consider that the Group has adequate banking facilities and cash resources to meet its
operational and capital commitments.
Financials
50
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
1. ACCOUNTING POLICIES CONTINUED
Assets under construction
Whilst held under assets under construction, no depreciation is charged on the assets. Once the
project is completed, the asset will be transferred to the correct fixed asset category.
Impairment of non-financial assets
The carrying values of non-financial assets are reviewed in conjunction with an independent
third party for impairment when there is an indication that assets might be impaired. When the
carrying value of an asset exceeds its recoverable amount, the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment
test is carried out on the asset’s cash generating unit (i.e. the smallest group of assets in which
the asset belongs for which there are separable identifiable cash flows).
Impairment charges are included in the consolidated income statement in cost of sales, except
to the extent they reverse previous gains recognised in the consolidated statement of total
comprehensive income.
Inventories
Inventories are initially recognised at cost on a first in first out basis, and subsequently at the
lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion
and other costs incurred in bringing the inventories to their present location and condition.
Financial assets
The Group classified its financial assets into the categories, discussed below, due to the purpose
for which the asset was acquired. The Group has not classified any of its financial assets as held
to maturity.
The Group documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. The Group also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
Cash and cash equivalents include cash in hand and deposits held at call with banks.
Financials
Financials
51
51
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
Loans and receivables
Loans and receivable assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally through the provision
of goods to customers (e.g. trade receivables), but also incorporate other types of contractual
monetary asset. They are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
The Group’s loans and receivables comprise trade and other receivables and cash and cash
equivalents included within the consolidated statement of financial position.
Impairment provisions are recognised when there is objective evidence (such as significant
financial difficulties on the part of the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under the terms receivable, the amount
of such a provision being the difference between the net carrying amount and the present value
of the future expected cash flows associated with the impaired receivable. For trade receivables,
which are reported net, such provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the consolidated income statement.
On confirmation that the trade receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Financial liabilities
The Group classified its financial liabilities as other financial liabilities which include the following:
• Trade payables and other short-term monetary liabilities, which are initially recognised at
fair value and subsequently carried at amortised cost using the effective interest method.
• Bank loan – external loan which is valued at its amortised cost and incurs interest.
• Finance costs are charged to the Income statement over the term of the debt using the
effective interest method so that the amount charged is at a constant rate on the carrying
amount. Issue costs are initially recognised as a reduction in the proceeds of the associat-
ed capital instrument.
Derivative financial instruments and hedging activities
Hedge accounting is applied to financial assets and financial liabilities only where all of the
following criteria are met:
At the inception of the hedge there is formal designation and documentation of the hedging
relationship and the Group’s risk management objective and strategy for undertaking the hedge.
Financials
52
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
• For cash flow hedges, the hedged item in a forecast transaction is highly probable and
presents an exposure to variations in cash flows that could ultimately affect profit or loss.
• The cumulative change in the fair value of the hedging instrument is expected to be
between 80-125% of the cumulative change in the fair value or cash flows of the hedged
item attributable to the risk hedged (i.e. it is expected to be highly effective).
• The effectiveness of the hedge can be reliably measured.
• The hedge remains highly effective on each date tested. Effectiveness is tested quarterly.
The Group uses derivative financial instruments such as forward foreign exchange contracts to
hedge its risks associated with foreign currency fluctuations. Such derivative financial instruments
are initially measured at fair value and subsequently remeasured at fair value. The fair value of
forward foreign exchange contracts is calculated by reference to current forward exchange rates
for contracts with similar maturity profiles.
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the
ineffective portion is recognised immediately in cost of sales in the income statement.
Amounts accumulated in equity are reclassified to inventories in the period when the purchase
occurs, matching the hedged transaction. The cash flows are expected to occur and impact on
profit and loss within 12 months from the year end.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss previously recognised in equity is retained
in equity and is recognised when the forecast transaction is ultimately recognised in cost of
sales in the income statement. When a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was reported in equity is immediately transferred to the income
statement.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability
in the statement of financial position differs from its tax base.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable
profit will be available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the deferred
tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
Financials
53
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
Deferred tax assets are offset when the Group has legally enforceable rights to set off current tax
assets against current tax liabilities and the deferred tax liabilities relate to taxes levied by the
same tax authority on either:
• the same taxable group company; or
• different company entities which intend to either settle current tax assets and liabilities on
a net basis, or to realise the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets and liabilities are expected to
be settled or recovered.
Provisions
Provision for dilapidations is made at the best estimate of the expenditure required to settle the
obligation at the reporting date, where material, discounted at the pre-tax rate reflecting current
market assessments of the time value of money and risks specific to the liability. A dilapidation
provision is only recognised on those properties which are likely to be exited. Where such
property is identified the full costs expected are recognised. This provision relates to the liability
of ‘wear and tear’ incurred on the leasehold properties and does not include any removal of shop
refits as experience indicates that liabilities do not arise for removal of shop refits. Dilapidations
are not included in IFRS 16 as they relate to ‘wear and tear’ and not structural alterations to the
buildings.
Foreign exchange
Transactions entered into the Group entities in a currency other than the functional currency are
recorded at the average monthly rate prevailing during the period. Foreign currency monetary
assets and liabilities are translated at the rates ruling at the reporting date.
Foreign exchange differences are recognised in the Income statement.
Retirement benefits – defined contribution and benefit
schemes
The Group operates both defined benefit and defined contribution funded pension schemes.
The schemes are administered by trustees and are independent of the Group.
Contributions to defined contribution schemes are charged to the consolidated statement of
comprehensive income in the year to which they relate.
Financials
54
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
Defined benefit scheme surpluses and deficits are measured at:
• the fair value of plan assets at the reporting date; less
• plan liabilities calculated using the projected unit credit method discounted to its present
value using yields available on high quality corporate bonds that have maturity dates
approximating to the terms of the liabilities; plus
• unrecognised past service costs; less
• the effect of minimum funding requirements agreed with scheme trustees.
Re-measurements of the net defined obligation are recognised directly within equity. These
include actuarial gains and losses, return on plan assets (interest exclusive) and any asset ceilings
(interest exclusive).
Service costs are recognised in the income statement, and include current and past service costs
as well as gains and losses on curtailments.
Net interest expense (income) is recognised in the income statement, and is calculated by applying
the discount rate used to measure the defined benefit obligation (asset) at the beginning of the
annual period to the balance of the net defined benefit obligation (asset), considering the effects
of contributions and benefit payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailments are recognised
immediately in the Income Statement
Settlements of defined benefit schemes are recognised in the period in which the settlement
occurs.
Reclassification of costs
The Directors have made the decision to re-categorise digital related postage charges. In 2021,
and going forward, these will be reported within cost of sales. In 2020 costs of approximately
£2,877,000 were previously reported in distribution costs. There is no impact on the profit and
loss for the year.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends
to equity shareholders, this is when declared by the directors. In the case of final and special
dividends, this is when approved by the shareholders at the AGM.
Financials
55
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Shoe Zone plc Group makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions.
The estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed below.
Accounting estimates and assumptions
Retirement benefits:
The Groups’ defined benefit schemes’ pension surplus/obligation, which is assessed each period
by actuaries, is based on key assumptions including discount rates, mortality rates, inflation,
future salary costs and pension costs. These assumptions, individually or collectively, may be
different to actual outcomes; refer to note 25 for further details.
Estimated impairment of store assets:
The Group tests whether store assets have suffered any impairment in accordance with the ac-
counting policies stated in note 1. The recoverable amount of cash-generating units is deter-
mined on a value-in-use calculation. The method requires an estimate of future cash flows and
the selection of a suitable discount rate in order to calculate the net present value of cash flows.
The Group has performed a sensitivity analysis on the impairment tests for its store portfolio
using various reasonably possible scenarios. An increase of three percentage points in the post-
tax discount rate would have resulted in no increase to the impairment charge. A decrease of
one percentage point in the growth rate after year three would have resulted in no increase to
the impairment charge.
Estimated useful life of property, plant and equipment:
At the date of capitalising property, plant and equipment, the Group estimates the useful life of
the asset based on management’s judgement and experience. Due to the significance of capital
investment to the Group, variances between actual and estimated useful economic lives could
impact results both positively and negatively, see note 12.
Judgements
Foreign currency hedge accounting:
Group policy is to adopt hedge accounting for cash flows for the purchase of goods for resale.
Due to the degree of judgement in determining forecast cash flows there is a risk that the as-
sumptions made in the effectiveness testing are inappropriate.
Discount rate - The weighted average lessee’s incremental borrowing rate applied to the lease
liabilities on 2 October 2021 was 1.82% and was 1.82% at 3 October 2020. If the discount rate
was changed by 1% this would result in an increase of liabilities in excess of £690,000.
Financials
56
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT
The Board has overall responsibility for the determination of the Group’s risk management ob-
jectives and policies. The overall objective of the Board is to set policies that seek to reduce
risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. The
Group reports in Pound Sterling. All funding requirements and financial risks are managed based
on policies and procedures adopted by the Board of Directors. The Group does use forward
currency contracts to mitigate foreign exchange risk. The Group does not issue or use financial
instruments of a speculative nature.
The Group is exposed to the following financial risks:
• credit risk;
• liquidity risk; and
• foreign exchange risk.
The Group is exposed to risks that arise from its use of financial instruments. The principal
financial instruments used by the Group, from which financial instrument risk arises, are as
follows:
• trade and other receivables;
• cash and cash equivalents;
• forward foreign exchange contracts; and
• trade and other payables.
Fair value hierarchy
All financial instruments measured at fair value must be classified into one of the levels below:
• Level 1: Quoted prices in active markets;
• Level 2: Level 1 quoted prices are not available, but fair value is based on observable
market data; and
• Level 3: Inputs that are not based on observable market data.
Financials
57
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED
A summary of the financial instruments held by category is provided below:
Financial assets
Financial assets at amortised cost
Trade receivables
Other receivables
Cash and cash equivalents
Total receivables and cash
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Total financial assets
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
467
1,579
19,015
21,061
(261)
590
21,390
582
690
13,266
14,538
34
(139)
14,433
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Financial liabilities
Financial liabilities at amortised cost
Trade and other payables
Financial liabilities at fair value through other comprehensive
income
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through other comprehensive
income
16,440
17,316
-
591
-
Total financial liabilities
17,031
17,421
Financials
Financials
58
58
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED
To the extent financial instruments are not carried at fair value in the consolidated statement of
financial position, book value approximates to fair value at 2 October 2021 and 3 October 2020.
Trade and other receivables are measured at amortised cost. Book values and expected cash
flows are reviewed by the Board and any impairment charged to the consolidated income
statement in the relevant period.
Cash and cash equivalents are held in Pound Sterling and placed on deposit in UK banks.
Trade and other payables are measured at amortised cost.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counter-party to a financial
instrument fails to meet its contractual obligations. At 2 October 2021 the Group has trade
receivables of £467,000 (2020: £582,000).
£197,000 of the balance is monies due from on-line sales with a further £153,000 in respect
of longstanding prepaid gift card providers. The remainder is balances owing from sub-let
properties and charges due from a number of suppliers. All trade debtors are expected to be
recoverable within 3 months.
The Directors are unaware of any factors affecting the recoverability of outstanding balances at
2 October 2021 and previously and consequently no provisions have been made for bad and
doubtful debts.
All cash balances and derivative financial instruments are held with reputable banks and service
providers and the Board monitors its exposure to counterparty risk on an on-going basis.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group
will encounter difficulty in meeting its financial obligations as they fall due. The Group’s policy is
to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become
due.
To achieve this aim, it seeks to maintain cash balances to meet expected requirements for a
period of at least 30 days. The Company has an overdraft facility of £3m and has taken advantage
of a CLBILS loan (see note 18).
Trade payables are repayable within 3 months. The Group prepares and maintains detailed cash
flow forecasts to monitor cash requirements and manage liquidity risk.
Financials
Financials
59
59
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED
The following table sets out the contractual maturities (representing undiscounted contractual
cash-flows) of financial liabilities:
Up to 3
months
Between
3 and 12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
At 2 October 2021
£’000
£’000
£’000
£’000
£’000
Trade and other payables
Total financial liabilities
16,440
16,440
-
-
-
-
-
-
-
-
Up to 3
months
Between
3 and 12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
At 3 October 2020
£’000
£’000
£’000
£’000
£’000
Trade and other payables
Total
17,316
17,316
-
-
-
-
-
-
-
-
Foreign exchange risk
The Group is predominantly exposed to foreign exchange risk on purchases from major suppliers
based in the Far East. Purchases are made on a central basis and the risk is mitigated through
using forward foreign currency exchange contracts.
The fair value of forward foreign exchange contacts has been determined based on discounted
market forward currency exchange rates at the balance sheet date.
Foreign Currency: Sensitivity Analysis
A sensitivity rate of 10% represents the Directors’ reasonable assessment of a possible change,
based on historic volatility.
The analysis assumes that exchange rate fluctuations on currency derivatives that form part of an
effective cash flow hedge relationship affect the fair value reserve in equity and the fair value of
the hedging derivatives. For foreign exchange derivatives which have ceased to have a hedging
relationship, these movements in exchange rates impact the income statement.
Positive figures represent an increase in profit or equity.
Financials
Financials
60
60
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED
Income Statement
Equity
2021
£’000
521
(224)
2020
£’000
379
(463)
2021
£’000
1,701
(1,692)
2020
£’000
5,033
(6,151)
Sterling strengthens by 10%
Sterling weakens by 10%
Year-end exchange rates applied in the above analysis are US Dollar 1.34 (2020: 1.29).
Strengthening and weakening of Sterling may not produce symmetrical results depending on
the proportion and nature of foreign exchange derivatives which cease to qualify for hedge
accounting.
Interest rate risk
The Group is exposed to interest rate risk which is managed centrally. The Group reviews the
exposure periodically and will manage its interest rate risk by reviewing appropriate facilities.
Capital management
In order to maintain or adjust the capital structure, the Group may adjust the value of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.
The Group’s capital is made up of share capital, merger reserve, cash flow hedge reserve and
retained earnings totalling £23,418,000 (3 October 2020: £12,398,000).
The Group’s objectives when maintaining capital are:
• to safeguard the entity’s ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders; and
• to provide an adequate return to shareholders by pricing products and services commen-
surately with the level of risk.
The capital structure of the Group consists of shareholders’ equity as set out in the
consolidated statement of changes in equity. All working capital requirements are planned to
be financed from existing cash resources whenever possible.
Financials
Financials
61
61
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
4. REVENUE
Revenue arises from:
Sales of goods
5. EXPENSES BY NATURE
Inventories recognised as an expense
Employee benefit expenses
Depreciation and impairment charge of property, plant and
equipment
Depreciation of right of use assets
Rentals under operating leases:
Land and buildings
Other
Loss on disposal of property, plant and equipment
Loss / (Profit) on disposal of Right of Use Assets
Administration expenses
Gain on Foreign Exchange
Other costs
6. AUDITOR’S REMUNERATION
The audit of the parent company
Audit of subsidiary financial statements pursuant to legislation
Other services
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
119,142
122,568
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
46,268
28,691
3,571
15,234
827
44
733
1,394
3,456
(111)
8,021
108,128
£’000
47,598
33,054
7,695
24,112
1,303
82
526
(113)
12,378
(30)
8,673
135,278
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
10
53
-
63
10
55
5
65
Financials
62
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
7. EMPLOYEE BENEFIT EXPENSES
Employee benefit expenses (including Directors) comprise:
Wages and salaries
Social security costs
Other pension costs
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
26,243
1,530
918
28,691
30,534
1,614
906
33,054
Wages and salaries in 2021 incudes the benefit of furlough income £6,142,651 (2020: £5,039,000).
The average monthly number of employees during the year was as follows:
Sales and distribution
Directors
Administration
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
No.
2,819
6
136
2,961
No.
3,275
6
147
3,428
The average monthly number of full time equivalent employees during the period was 1,487 (2020: 1,698).
Shoe Zone plc does not employ any members of staff and has no staff costs during the year (2020: Nil).
Directors’ remuneration, included in staff costs:
Salaries and benefits
Pension contributions
Information regarding the highest paid Director is as follows:
Salary and benefits
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
1,135
8
1,143
561
561
851
12
863
393
393
Financials
Financials
63
63
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
8. SEGMENTAL INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker has been identified as the
management team including the Chairman, Chief Executive and Finance Director.
The Board considers that each store is an operating segment but there is only one reporting segment
as the stores qualify for aggregation, as defined under IFRS 8.The Directors now consider Digital to
be its own operating segment. Management reviews the performance of the Group by reference to
total results against budget. The total profit measures are operating profit and profit for the year, both
disclosed on the face of the consolidated income statement. No differences exist between the basis of
preparation of the performance measures used by management and the figures in the Group financial
statements.
Revenue
United Kingdom stores
Digital
Republic of Ireland stores
Other
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
87,420
30,499
674
549
119,142
100,098
19,296
2,678
496
122,568
There are no customers with turnover in excess of 10% or more of total turnover.
Non-current assets by location:
United Kingdom
Republic of Ireland
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
45,111
-
45,111
59,349
5
59,354
Digital non-current and current assets have not been disclosed due to the immaterial value. The
contribution is £8.5m (2020: £4.6m)
The Group has only one operating and reporting segment which reflects the Group’s management
and reporting structure as viewed by the board of directors.
The deferred tax asset of £3,220,000 (2020: £5,617,000) is unallocated.
Financials
Financials
64
64
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
9. FINANCE INCOME AND EXPENSES
Finance income
Interest receivable
Total finance income
Finance expense
Interest expense on lease liability
Net interest expense on defined benefit pension scheme
Loan interest
Other finance expense
Total finance expense
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
-
-
(1,268)
(148)
(147)
5
(1,558)
10
10
(1,684)
(163)
(50)
(4)
(1,901)
Financials
Financials
65
65
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
10. INCOME TAX
Current tax expense
Current tax on profit for the year
Adjustment for (over) provision in prior years
Total current tax / (credit)
Deferred tax expense
Adjustment for under / (over) provision in prior years
Effect of tax rate changes
Origination and reversal of temporary differences (note 21)
Taxation charge / (credit)
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
652
(1,425)
(773)
1,240
641
1,334
2,442
-
(20)
(20)
(994)
-
(1,684)
(2,698)
The reason for the difference between the actual tax charge for the period and the standard rate of
corporation tax in the United Kingdom applied to profit for the period is as follows:
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
(Loss)/Profit for the period
Income tax expense
(Loss)/Profit before income taxes
Expected tax charge based on corporation tax rate of 19%
(03 October 2020: 19%)
Expenses not deductible for tax purposes
Effective change of rate
Adjustments to tax charge in respect of previous period
Total tax charge / (credit)
7,014
2,442
9,456
1,799
187
641
(185)
2,442
Factors that may affect future tax charges: on 3 March 2021, the Chancellor of the Exchequer
announced that the corporation tax rate would increase to a maximum of 25% from 1st April 2023.
This was substantively enacted on 24 May 2021. Deferred tax is calculated at the tax rates that are
expected to apply in the year when the liability is settled, or the asset is realised, based on tax law
and the corporation tax rates that have been enacted, or substantively enacted, at the balance sheet
date. As such, the deferred tax rate applicable at 2 October 2021 is 25% and deferred tax has been
re-measured at this rate.
(11,903)
(2,698)
(14,601)
(2,774)
956
134
(1,014)
(2,698)
Financials
Financials
66
66
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
11. DIVIDENDS
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Dividends paid during the year at Nil (2020: Nil) per share
Nil
Nil
No final dividend is proposed for shareholders on the register (2020: Nil) per share. .
Financials
Financials
67
67
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
12. PROPERTY,
PLANT AND
EQUIPMENT
l
d
n
a
d
o
h
e
e
r
F
l
d
o
h
e
s
a
e
l
g
n
o
l
s
e
i
t
r
e
p
o
r
p
l
d
o
h
e
s
a
e
l
d
n
a
s
t
n
e
m
e
v
o
r
p
m
i
l
d
o
h
e
s
a
e
l
t
r
o
h
S
s
e
l
c
i
h
e
v
r
o
t
o
M
s
g
n
i
t
t
fi
d
n
a
s
e
r
u
t
x
F
i
l
a
t
o
T
r
e
d
n
u
s
t
e
s
s
A
n
o
i
t
c
u
r
t
s
n
o
c
£’000
£’000
£’000
£’000
£’000
£’000
Cost
At 5 October 2019
6,249
20,680
114
Additions
Disposals
Impairments
Assets under construction
-
-
(2,447)
-
590
(1,485)
-
125
-
-
-
-
37,510
2,219
(1,943)
360
-
-
-
235
(360)
At 3 October 2020
3,802
19,910
114
38,021
Additions
Disposals
Impairments
Assets under construction
-
248
385
(248)
(1,371)
-
-
-
-
-
-
-
772
(2,005)
-
-
At 2 October 2021
3,554
18,787
499
36,788
Depreciation
At 5 October 2019
Charge for the year
Disposals
Impairments
At 3 October 2020
Charge for the year
Disposals
Impairments
1,123
54
-
-
1,177
53
(124)
-
14,512
1,043
(1,335)
717
14,937
925
(1,211)
285
25
22
-
-
47
50
-
-
27,110
2,426
(1,819)
1,002
28,719
2,116
(1,715)
142
At 2 October 2021
1,106
14,936
97
29,262
Net book value
At 2 October 2021
At 3 October 2020
At 5 October 2019
2,448
2,625
5,126
3,851
4,973
6,168
402
67
89
7,526
9,302
10,400
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
360
64,913
2,809
(3,428)
(2,447)
-
61,847
1,405
(3,624)
-
-
59,628
42,770
3,545
(3,154)
1,719
44,880
3,144
(3,050)
427
45,401
14,227
16,967
22,143
Financials
68
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
13. LEASES
The majority of the Company’s trading stores are leased under operating leases. The Group also
has a number of non-property operating leases relating to vehicles and an item of equipment in the
Distribution Centre.
Information about leases for which the Company is a lessee is presented below:
Cost
Balance at 3 October 2020
Additions
Disposals
At 2 October 2021
Depreciation
Balance at 3 October 2020
Charge for the year
Disposals
Impairment
At 2 October 2021
Net book value
At 3 October 2021
At 3 October 2020
Property
Motor vehicles and
equipment
£’000
£’000
64,804
4,348
(29,329)
39,823
23,299
14,857
(30,734)
2,020
9,442
30,381
41,505
1,403
12
(547)
868
521
377
(533)
-
365
503
882
Total
£’000
66,207
4,360
(29,876)
40,691
23,820
15,234
(31,267)
2,020
9,807
30,884
42,387
Financials
69
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
13. LEASES
CONTINUED
The Group costs for those leases for which the practical expedient was applied described in Accounting
Policies: IFRS 16 Leases, amounted to £130,000 in the 52 weeks ended 2 October 2021.
The table below sets out the maturity analysis of future lease payments:
Maturity analysis – contracted undiscounted cash flows
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Less than one year
Between one and five years
More than five years
Total undiscounted lease liabilities
Carrying value of lease liabilities included in balance sheet
Current
Non-current
Operating Leases
16,345
21,759
3,760
41,864
42,977
17,035
25,942
16,660
32,454
6,986
56,100
57,389
19,914
37,475
The Group has a number of stores on short-term rental and a small number of outlets where a subsec-
tion are sublet to third parties at a contracted rate. The Group has classified these leases as operating
leases because they do not transfer substantially all the risks and rewards of the right-of-use-asset.
In line with IAS36 the carrying value of the right-of-use-asset is assessed for impairment and booked
where necessary. See note 23.
Financials
70
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
14. INVENTORIES
Goods for resale
Shop fitting materials and other consumables
15. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Other receivables
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
24,608
523
25,131
£’000
26,295
403
26,698
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
467
3,411
1,579
£’000
582
1,463
690
There are no impairment provisions or receivables past due in either year.
16. DERIVATIVE FINANCIAL INSTRUMENTS
At the balance sheet date, details of the forward foreign exchange contracts that the Group has committed to are
as follows:
Derivative financial assets/liability
Derivatives not designated as hedging instruments
Derivatives designated as hedging instruments
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
(261)
(330)
(591)
£’000
34
(139)
(105)
The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in
the consolidated statement of financial position.
The notional principal amounts of outstanding forward foreign exchange contracts at 2 October 2021
were $27,750,000 (3 October 2020: $71,250,000). The fair value of the forward foreign exchange
contracts are within the level 2 of the fair value hierarchy and have been valued on the basis of
observable market data. The key input into the valuation is market rates of financial instruments at the
reporting date.
Financials
Financials
71
71
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
17. TRADE AND OTHER PAYABLES
Current
Trade payables
Social security and other taxes
Other payables and finance lease liability
Accruals
18. LOANS
Amounts falling due within one year
Bank Loans
Amounts falling due within 1-2 years
Bank loans
Amounts falling due within 2-5 years
Bank loans
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
7,284
2,517
210
6,429
16,440
6,401
440
426
10,049
17,316
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
4,400
-
-
4,400
£’000
1,944
2,333
2,723
7,000
The bank loan is provided by National Westminster Bank plc under their COVID-19 Large Business
Interruption Scheme. The loan monthly payments are £400,000 ending in August 2022. Interest rates
increased from May 2021 with the loan now subject to a rate of 1.72% over base.
National Westminster Bank plc holds a fixed and floating charge over the Group’s property and assets.
Financials
Financials
72
72
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
19. PROVISIONS
As at 3 October 2020
Additions
Amounts utilised
Amounts released
As at 2 October 2021
Customer Returns
Dilapidations
£’000
28
(9)
(28)
-
(9)
£’000
2,703
1,689
(49)
(908)
3,435
The provisions are aged as follows:
Current
Non-current
As at 2 October 2021
Customer Returns
Dilapidations
£’000
(9)
-
(9)
£’000
1,707
1,728
3,435
For all products, the Group has incurred an obligation to exchange the item if it is faulty due to a lack
of quality or give the client a refund if they are not satisfied. Revenue from the sale of the products
is recognised once the product is sold, however, a provision for customer returns based on previous
experience is recognised at the same time.
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state
at the end of the lease in accordance with the lease terms. The main uncertainty relates to estimating
the cost that will be incurred at the end of the lease.
20. CONTINGENT LIABILITIES
Shoe Zone plc and its subsidiary undertakings have given a duty deferment guarantee in favour of HM
Revenue and Customs amounting to £800,000 (3 October 2020: £800,000).
Total
£’000
2,731
1,680
(77)
(908)
3,426
Total
£’000
1,698
1,728
3,426
Financials
73
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
21. DEFERRED TAX
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of
19% (3 October 2020: 19%).
The movement on the deferred tax account is as shown below:
At beginning of the year
Recognised in income statement:
Tax expense (note 10)
Recognised in other comprehensive income:
Actuarial gain / loss on defined benefit pension schemes
Cashflow hedge
At end of the period
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
5,617
(3,214)
761
56
3,220
£’000
1,677
2,678
899
363
5,617
The deferred tax has arisen due to the following:
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Accelerated capital allowances
Ineligible buildings
Short term timing differences
Derivatives
Loss for the financial year
IFRS 16 Leases
Defined benefit pension scheme
£’000
1,624
(675)
83
65
-
646
1,477
The Group has an unrecognised deferred tax asset £3,220,000 as at 2 October 2021 (3 October 2020:
£5,617,000).
There are estimated losses available to offset against future capital taxable profits amounting to
approximately £nil (3 October 2020: £11,000,000).
£’000
1,361
(540)
26
-
2,126
631
2,013
Financials
74
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
22. SHARE CAPITAL
Share capital issued and fully paid
50,000,000 ordinary shares of 1p each
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
500
500
500
500
Ordinary shares carry the right to one vote per share at general meetings of the company and the rights
to share in any distribution of profits or returns of capital and to share in any residual assets available
for distribution in the event of a winding up.
23. LEASES
Operating leases – lessee
The Shoe Zone plc Group has entered into commercial leases on land and buildings. These leases have
an average life of between five and ten years. There are no restrictions placed on the Shoe Zone plc
Group by entering into these leases. The total future minimum lease payments under non-cancellable
operating leases for land and buildings and other items of plant and machinery are as follows:
Expense relating to short-term leases
Expense relating to variable lease payments
The majority of leases are now included within IFRS 16 (note 13).
Property
Property
2 October 2021
3 October 2020
£’000
£’000
130
-
130
292
29
321
Financials
75
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
23. LEASES CONTINUED
Finance leases
Where substantially all of the risks and rewards incidental to ownership of a leased asset have been
transferred to the Shoe Zone plc Group (a ‘finance lease’), the asset is treated as if it had been purchased
outright.
The amount initially recognised as an asset is the lower of the fair value of the leased property and the
present value of the minimum lease payments payable over the term of the lease. The corresponding
lease commitment is shown as a liability. Lease payments are analysed between interest and capital.
The interest element is charged to the consolidated income statement over the period of the lease
and is calculated so that it represents a constant proportion of the lease liability. The capital element
reduces the balance owed to the lessor.
Not later than one year
Later than one year and not later than five years
Later than five years
Motor Vehicle
Motor Vehicle
2 October 2021
3 October 2020
£’000
£’000
14
36
-
50
16
48
-
64
Finance leases are secured on the assets to which they relate to. The net book value of assets held
under finance lease is £46,000 (2020: £62,000).
24. CAPITAL COMMITMENTS
Contracted for but not provided
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
Nil
£’000
Nil
Financials
76
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSION COSTS
Defined contribution scheme
The Group operates a defined contribution pension scheme namely Shoe Zone Worksave Pension
Plan, and contributions amounted to £918,000 (03 October 2020: £906,000).
Defined benefit scheme
The Group operates two other pension schemes in the UK: the Shoe Zone Pension Scheme and the
Shoefayre Limited Pension and Life Assurance Scheme. The Shoe Zone Pension Scheme provided
benefits on a defined benefit basis for service up to 30 September 2001. For service after that date,
benefits are provided on a defined contribution basis. The Shoefayre Limited Pension and Life Assurance
Scheme provided benefits on a defined benefit basis but was closed to future accrual on 30 June 2009.
The scheme was acquired on the purchase of Shoefayre Limited on 19 September 2007. The assets of
all schemes are held in separate trustee administered funds. There have been no contributions to the
scheme this year, last year was also nil.
The schemes are exposed to a number of risks, including:
• Investment risk: movement of discount rate used (high quality corporate bonds) against the
return from plan assets,
• Interest rate risk: decreases/increases in the discount rate used (high quality corporate bonds)
will increase/decrease the defined benefit obligation,
• Longevity risk: changes in the estimation of mortality rates of current and former employees.
Amounts recognised in the balance sheet at 2 October 2021
Fair value of assets
Present value of funded obligations
Impact of asset ceiling
Deficit
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
89,608
(89,594)
(5,923)
(5,909)
87,850
(94,724)
(3,720)
(10,594)
Financials
77
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Amounts recognised in other comprehensive income
Return on plan assets
Actuarial gains arising from changes in:
Demographic assumptions
Financial assumptions
Experience losses
Total actuarial gain / (losses)
Impact of asset ceiling
Deferred tax on employee benefit scheme
Total amount recognised in other comprehensive income
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
2,183
(826)
4,173
-
3,347
(2,151)
761
4,140
1,360
277
(4,293)
-
(4,016)
542
899
(1,215)
Financials
Financials
78
78
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
The following figures are based on a full actuarial valuation performed in April 2019 and March 2019 for
the Shoe Zone and Shoefayre schemes respectively which was carried out by a qualified independent
actuary. This actuarial valuation has been updated to 2 October 2021 for the purpose of calculating the
pension deficit and disclosures in the current year.
Post retirement mortality
Life expectancy
Male currently aged 45
Female currently aged 45
Male currently aged 65
Female currently aged 65
Financial assumptions
2 October 2021
3 October 2020
Years
Years
88.8
90.5
87.0
89.0
88.7
90.4
86.9
88.9
2 October 2021
3 October 2020
Deferred pension revaluation - Shoe Zone Scheme
Deferred pension revaluation - Shoefayre Scheme
Pension increases
Discount rate
Consumer Price Index - Shoe Zone Scheme
Consumer Price Index - Shoefayre Scheme
Retail Price Index
%
3.10
2.95
3.60
1.95
3.10
2.95
3.80
The weighted average duration of the defined benefit obligation for the Shoe Zone scheme at 2 Octo-
ber 2021 is 14 years (3 October 2020: 14 years).
The weighted average duration of the defined benefit obligation for the Shoefayre scheme at 2 Octo-
ber 2021 is 16 years (3 October 2020: 16 years).
%
2.40
2.40
3.10
1.40
2.40
2.40
3.20
Financials
Financials
79
79
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoe Zone Pension Scheme Assets
Assets
The Shoe Zone Pension Scheme provided benefits on a defined benefit basis for service up to 30
September 2001. For service after that date, benefits are provided on a defined contribution basis.
The major categories of assets as a percentage of total assets are as follows:
Asset category
Equities
Property
Gilts/bonds
Cash
Diversified Growth Funds
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
19%
0%
18%
15%
26%
17%
0%
17%
11%
33%
The actual return on the Scheme’s assets net of expenses over the year to the review date was a gain
of £561,000 (3 October 2020: £2,288,000).
The assets do not include any investments in shares of the Group.
The expected return on assets is a weighted average of the assumed long-term returns available on
high quality corporate bonds in line with the method used to value the liabilities. Equity and property
returns are developed based on the selection of an appropriate risk premium above the risk free rate
which is measured in accordance with the yield on the government bonds. Bond returns are selected by
reference to the yields on the government and corporate debt, as appropriate to the scheme holdings
of these instruments. The expected returns on the Target Return Funds are equal to the fund’s targets.
Financials
Financials
80
80
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS CONTINUED
Amounts recognised in the income statement over the period
Interest cost
Expected return on assets
Administration costs
Interest on asset restriction
Amounts recognised in the statement of financial position
Fair value of assets
Present value of funded obligations
Surplus
Impact of asset ceiling
Net defined benefit liability
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
(680)
732
(61)
(52)
(859)
934
-
(75)
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
51,874
(45,951)
5,923
(5,923)
-
53,264
(49,544)
3,720
(3,720)
-
Financials
Financials
81
81
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoe Zone Pension Scheme (continued)
Amounts recognised in other comprehensive income
Return on plan assets
Actuarial (loss) / gains arising from changes in:
Demographic assumptions
Financial assumptions
Total actuarial gain / (loss)
Changes in effect of asset ceiling
Deferred tax on employee benefit scheme
Total amount recognised in other comprehensive expense
Reconciliation of assets and defined benefit obligation
The change in assets over the period was:
Fair value of assets at the beginning of the period
Expected return on assets
Company contributions
Administration costs
Benefits paid
Actuarial (loss) / gain
Fair value of assets at the end of the period
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
(171)
(359)
2,742
2,383
(2,151)
618
679
1,354
171
(2,066)
(1,895)
542
198
199
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
53,264
732
-
(61)
(1,890)
(171)
51,874
52,822
934
46
-
(1,892)
1,354
53,264
Financials
Financials
82
82
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoe Zone Pension Scheme (continued)
The change in defined benefit obligation over the period was:
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Defined benefit obligation at the beginning of the period
Interest cost
Benefits paid
Actuarial loss
Defined benefit obligation at the end of the period
49,544
680
(1,890)
2,383
50,717
48,635
859
(1,892)
1,942
49,544
Sensitivity of the value placed on the liabilities:
Adjustments to assumptions
Approximate effect on liabilities
Discount rate
Plus 0.50%
Minus 0.50%
Inflation
Plus 0.50%
Minus 0.50%
Life Expectancy
Plus 1.0 years
Minus 1.0 years
-7.0%
7.0%
2.0%
-2.0%
4.0%
-4.0%
Note that the above sensitivities are approximate and only show the likely effect of an assumption
being adjusted whilst all other assumptions remain the same.
Financials
Financials
83
83
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoefayre Limited Pension and Life Assurance Scheme
The company operates the Shoefayre Limited Pension and Life Assurance Scheme. The scheme
provided benefits on a defined benefit basis but was closed to future accrual on 30 June 2009.
The major categories of assets as a percentage of total assets are as follows:
Asset Category
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Equities
Property
Gilts/bonds
Cash
Diversified Growth Funds
Liability Driven Investment
£’000
28%
0%
5%
8%
42%
17%
100%
£’000
21%
0%
9%
4%
44%
22%
100%
The actual return on the Scheme’s assets net of expenses over the year to the review date was a gain
of £2,830,000 (3 October 2020: £616,000). The assets do not include any investments in shares of the
company.
The expected return on assets is a weighted average of the assumed long-term returns available on
high quality corporate bonds in line with the method used to value the liabilities. Equity and property
returns are developed based on the selection of an appropriate risk premium above the risk free rate
which is measured in accordance with the yield on the government bonds. Bond returns are selected by
reference to the yields on the government and corporate debt, as appropriate to the scheme holdings
of these instruments. The expected returns on the Target Return Funds are equal to the fund’s targets.
Amounts recognised in the statement of financial position
Fair value of assets
Present value of funded obligations
Net liability
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
37,734
(43,643)
(5,909)
34,586
(45,180)
(10,594)
Financials
Financials
84
84
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoefayre Limited Pension and Life Assurance Scheme (continued)
Amounts recognised in other comprehensive income
Gain / (loss) on plan assets
Actuarial (loss) / gains arising from changes in:
Demographic assumptions
Financial assumptions
Total actuarial (loss) / gain
Deferred tax on employee benefit scheme
Total amount recognised in other comprehensive income
Amounts recognised in the income statement over the period
Interest cost
Expected return on assets
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
2,354
(467)
1,446
979
143
3,476
6
106
(2,227)
(2,121)
701
(1,414)
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
(624)
476
(148)
(773)
610
(163)
Financials
Financials
85
85
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoefayre Limited Pension and Life Assurance Scheme (continued)
Reconciliation of assets and defined benefit obligation
The change in assets over the period was:
Fair value of assets at the beginning of the year
Expected return on assets
Employer contributions
Benefits paid
Actuarial gain on assets
Fair value of assets at the end of the period
The change in defined benefit obligation over the period was:
Defined benefit obligation at the beginning of the period
Interest cost
Benefits paid
Actuarial loss on obligation
Defined benefit obligation at the end of the period
During 2021 contributions of £1,500,000 were made.
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
34,586
476
1,500
(1,182)
2,354
37,734
33,861
610
1,420
(1,311)
6
34,586
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
45,180
624
(1,182)
(979)
43,643
43,597
773
(1,311)
2,121
45,180
Financials
Financials
86
86
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
25. PENSIONS
CONTINUED
Defined benefit scheme - Shoefayre Limited Pension and Life Assurance Scheme (continued)
Sensitivity of the value placed on the liabilities:
Adjustments to assumptions
Approximate effect on liabilities
Discount rate
Plus 0.50%
Minus 0.50%
Inflation
Plus 0.50%
Minus 0.50%
Life Expectancy
Plus 1.0 years
Minus 1.0 years
-8.0%
9.0%
5.0%
-4.0%
4.0%
-4.0%
Note that the above sensitivities are approximate and only show the likely effect of an assumption
being adjusted whilst all other assumptions remain the same.
26. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purpose of the statement of cash flow comprise:
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Cash at banks and in hand
Cash and cash equivalents
19,015
19,015
13,266
13,266
Financials
Financials
87
87
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
27. RELATED PARTY TRANSACTIONS
Balances and transactions between the Company and its subsidiaries, which are related parties of
the Company, have been eliminated on consolidation and are not disclosed in this note. Details of
transactions between the Group and other related parties are disclosed below.
During the year, the Group entities entered into the following trading transactions with Group pension
schemes:
Rent paid to Zone Executive Pension Scheme
Contributions to the:
Shoe Zone Worksave Pension Plan
Shoe Zone Pension Scheme
Shoefayre Limited Pension and Life Assurance Scheme
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
178
888
-
1,500
2,566
£’000
147
872
46
1,350
2,415
During the year, the key management personnel remuneration included within staff costs are as follows:
Short term employee benefits
Post-employment benefit
Employers national insurance
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
770
8
103
881
851
12
111
974
Key management personnel are considered to be the Directors of Shoe Zone plc.
Financials
Financials
88
88
NOTES TO THE FINANCIAL STATEMENTS FOR THE
52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
28. EARNINGS PER SHARE
Earnings per share is calculated by dividing profit for the year by the weighted average number of
shares outstanding during the year.
Numerator
Profit / (loss) for the year and (Loss)/earnings used in basic and
diluted EPS
As the company recorded a loss this year the EPS is nil.
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
14.03p
-
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
No.
No.
Denominator
Weighted average number of shares used in basic and diluted
EPS
50,000,000
50,000,000
29. ANALYSIS OF NET DEBT
3 October
2020
Cashflows
Loan advance
Loan
repayment
2 October
2021
Cash at bank and in hand
Bank loan
13,266
(7,000)
6,266
5,749
-
5,749
-
(5,000)
(5,000)
-
7,600
7,600
19,015
(4,400)
14,615
30. ULTIMATE CONTROLLING PARTY
The company is controlled by the Smith family albeit there is not a single controlling party.
Financials
Financials
89
89
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 2 OCTOBER 2021
Note
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Fixed assets
Investments
Current assets
Debtors
Creditors: amounts falling due within one year
Net current liabilities
Net assets
Capital and reserves
Called up share capital
Merger reserve
Profit and loss account
Total shareholders’ funds
2
3
4
5
6
6
68,644
68,644
16
16
(1,842)
(1,826)
66,818
500
586
65,732
66,818
The Company made a loss during the year of £143,000 (2020: loss of £177,000).
The financial statements were approved and authorised for issue by the Board of Directors and were
signed on its behalf by:
Anthony Smith
Chief Executive
Date: 10 January 2022
Registered Number : 08961190
68,644
68,644
12
12
(1,695)
(1,683)
66,961
500
586
65,875
66,961
Financials
Financials
90
90
COMPANY STATEMENT OF CHANGES IN EQUITY FOR
THE 52 WEEKS ENDED 2 OCTOBER 2021
At 5 October 2019
Profit for the period
Total comprehensive income for the period
Dividends paid during the year
Total contributions by and distributions to owners
At 3 October 2020
Loss for the period
Total comprehensive income for the period
Dividends paid during the year
Total contributions by and distributions to owners
Share
capital
Merger
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
500
586
66,052
67,138
-
-
-
-
-
-
-
-
(177)
(177)
-
-
(177)
(177)
-
-
500
586
65,875
66,961
-
-
-
-
-
-
-
-
(143)
(143)
-
-
(143)
(143)
-
-
At 2 October 2021
500
586
65,732
66,818
Share capital comprises nominal value of shares subscribed for.
The merger reserve has arisen as a result of the application of merger accounting to the group
reorganisation of 26 March 2014.
Retained earnings are all other net gains and losses and transactions with owners (e.g. dividends) not
recognised elsewhere.
Financials
Financials
91
91
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR
THE 52 WEEKS ENDED 2 OCTOBER 2021
1. ACCOUNTING POLICIES
Basis of preparation
The Company’s financial year is 52 weeks ended 2 October 2021. The financial statements are
prepared on the going concern basis, under the historical cost convention and in accordance
with the Companies Act 2006 and applicable accounting standards in the United Kingdom.
The Company has taken advantage of the exemption contained in Section 408(4) of the
Companies Act 2006 from presenting its own profit and loss accounts. The loss dealt with in the
accounts of the Company was £143,000 (3 October 2020: loss of £177,000).
The financial statements have been prepared in accordance with Financial Reporting Standard
100 ‘Application of Financial Reporting Requirements’ and Financial Reporting Standard 101
“Reduced Disclosure Framework”. The principal accounting policies adopted in the preparation
of the financial statements are set out below. The policies have been consistently applied to all
the years presented, unless otherwise stated.
As permitted by FRS 101, the Company has taken advantage of all the disclosure exemptions
available under that standard.
Accounting policies have been applied consistently throughout the year.
Investments
Investments held as fixed assets are stated at cost, less any provision for impairment.
The Directors review the forecast and budgets of the subsidiaries held and review any necessary
impairments.
Financials
Financials
92
92
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR
THE 52 WEEKS ENDED 2 OCTOBER 2021
CONTINUED
2. FIXED ASSET INVESTMENTS
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
Cost
Impairment of investment in Castle Acres Development Limited
70,586
(1,942)
70,586
(1,942)
The subsidiaries of the Company, all of which have been included in the consolidated financial
statements, are as follows:
Name of investment
Place of
incorporation
Principal activity
Ownership
Castle Acres Development Limited
England & Wales Non-trading company
100% owned by company
Shoe Zone Retail Limited
England & Wales Trading company
100% owned by company
Zone Property Limited
England & Wales Non-trading company
100% owned by company
Zone Group Limited
England & Wales Non-trading company
100% owned by company
Shoe Zone (Ireland) Limited
England & Wales Non-trading company
Shoe Zone Pension Trustees Limited England & Wales Non-trading company
Shoe Fayre Pension Trustees Limited England & Wales Non-trading company
Stead & Simpson Limited
England & Wales Non-trading company
Zone Footwear Limited
England & Wales Non-trading company
Zone Retail
England & Wales Non-trading company
Walkright Limited
England & Wales Non-trading company
100% owned by Shoe
Zone Retail Limited
100% owned by Zone
Group Limited
100% owned by Zone
Group Limited
100% owned by Zone
Group Limited
100% owned by Zone
Group Limited
100% owned by Zone
Group Limited
100% owned by Zone
Group Limited
The registered address of all of the above subsidiaries is Haramead Business Centre, Humberstone
Road, Leicester, LE1 2LH.
Financials
Financials
93
93
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR
THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
3. DEBTORS
Prepayments
Other debtors
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
8
8
16
4
8
12
4. CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
Amounts owing to group undertakings
Accruals
5. SHARE CAPITAL
Allotted, called up and fully paid:
50,000,000 ordinary shares of 1p each
£’000
1,811
31
1,842
£’000
1,660
35
1,695
52 weeks ended
2 October 2021
52 weeks ended
3 October 2020
£’000
£’000
500
500
500
500
Financials
Financials
94
94
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR
THE 52 WEEKS ENDED 2 OCTOBER 2021 CONTINUED
6. RESERVES
At 3 October 2020
Loss for the financial period
Dividends paid during the year
At 2 October 2021
Merger reserve
Profit and loss account
£’000
£’000
586
-
-
586
65,875
(143)
-
65,732
7. RELATED PARTY TRANSACTIONS
Transactions between the Company and its 100% owned subsidiaries, which are related parties of the
Company, are not disclosed in this note due to the advantage being taken of the exemption provided
by FRS 101 ‘Reduced Disclosure Framework’. There have been no other related party transactions
during the year.
Financials
95
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of
Shoe Zone plc (the ‘Company’) will be held at its registered
office at Haramead Business Centre, Humberstone Road,
Leicester, Leicestershire LE1 2LH on Tuesday, 8 March
2022 at 10.00 a.m. to consider and, if thought fit, pass
the resolutions set out below. Resolutions 1 to 10 will be
proposed as ordinary resolutions and Resolutions 11 to 13
will be proposed as special resolutions.
1.
To receive and adopt the Company’s annual accounts for the financial year ended 2
October 2021 and the associated reports of the Directors of the Company and the
auditors of the Company.
2.
To re-elect Charles Smith as a Director.
3.
To re-elect Anthony Smith as a Director.
4.
To re-elect Terry Boot as a Director.
5.
To re-elect Malcolm Collins as a Director.
6.
To re-elect Victoria Norrish as a Director.
7.
8.
9.
To re-appoint Cooper Parry Group Limited as auditors of the Company to hold office
from the conclusion of the annual general meeting until the conclusion of the annual
general meeting of the Company to be held in 2023.
To authorise the Directors of the Company to determine the remuneration of Cooper
Parry Group Limited as auditors of the Company.
That, in accordance with section 366 of the Companies Act 2006 (the ‘Act’), the
Company and its subsidiaries be and are hereby authorised, in aggregate, to:
(a) make political donations to political parties and/or independent election candidates,
not exceeding £50,000 in total;
(b) make political donations to political organisations other than political parties, not
exceeding £50,000 in total; and
(c)
incur political expenditure, not exceeding £50,000 in total,
Financials
96
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
such authority to expire on the earlier of 8 March 2023 and the conclusion of the annual
general meeting of the Company to be held in 2023. For the purposes of this resolution
the terms ‘political donation’, ‘political parties’, ‘independent election candidates’,
‘political organisation’ and ‘political expenditure’ have the meanings given by sections
363 to 365 of the Act.
10. That, in substitution for any existing authority but without prejudice to the exercise of
any such authority prior to the date of the passing of this resolution, the Directors of
the Company be and are hereby generally and unconditionally authorised pursuant
to and in accordance with section 551 of the Companies Act 2006 (the ‘Act’) to
exercise all the powers of the Company to allot shares in the Company and to grant
rights to subscribe for, or to convert any security into, shares in the Company:
(a) up to an aggregate nominal amount of £166,666; and
(b) up to an aggregate nominal amount of £333,332 (such amount to be reduced by
any shares allotted, or rights to subscribe for or to convert any security into shares
granted, under paragraph (a) of this resolution) in connection with an offer by way of
a rights issue:
(i)
to holders of ordinary shares of £0.01 each in the capital of the Company in
proportion (as nearly as may be practicable) to their existing holdings; and
(ii)
to holders of other equity securities as required by the rights of those securities
or as the Directors otherwise consider necessary or permitted by the rights of
those securities,
and so that the Directors may impose any limits or restrictions and make any arrangements
which they consider necessary or appropriate to deal with treasury shares, fractional
entitlements or securities represented by depositary receipts, record dates, legal,
regulatory or practical problems in, or under the laws of, any territory or the requirements
of any regulatory body or stock exchange or any other matter, provided that this authority
shall expire on the earlier of 8 March 2023 and the conclusion of the annual general
meeting of the Company to be held in 2023, save that the Company may before such
expiry make an offer or enter into an agreement which would or might require shares to
be allotted, or rights to subscribe for or to convert securities into shares to be granted,
after such expiry and the Directors may allot shares or grant such rights in pursuance
of such an offer or agreement as if the authority conferred hereby had not expired.
11. That, subject to the passing of resolution 10 proposed at the annual general meeting
of the Company convened for 8 March 2022 (‘Resolution 10’) and in substitution for any
existing authority but without prejudice to the exercise of any such authority prior to the
date of the passing of this resolution, the Directors of the Company be and are hereby
generally empowered pursuant to sections 570 and 573 of the Companies Act 2006 (the
‘Act’) to allot equity securities (within the meaning of section 560(1) of the Act) (including
the grant of rights to subscribe for, or to convert any securities into, ordinary shares of
£0.01 each in the capital of the Company (‘Ordinary Shares’)) for cash pursuant to the
authorities conferred by Resolution 10 and/or by way of a sale of treasury shares (within
the meaning of section 560(3) of the Act), as if section 561(1) of the Act did not apply to
any such allotment or sale, provided that this power shall be limited to:
Financials
97
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
(a)
the allotment of equity securities and the sale of treasury shares for cash in
connection with an offer of, or invitation to apply for, equity securities (but in the
case of the authority granted under paragraph (b) of Resolution 10, by way of a
rights issue only):
(i)
to holders of Ordinary Shares in proportion (as nearly as may be practicable) to
their existing holdings; and
(ii)
to holders of other equity securities as required by the rights of those securities
or as the Directors otherwise consider necessary or permitted by the rights of
those securities,
and so that the Directors may impose any limits or restrictions and make any
arrangements which they consider necessary or appropriate to deal with any
treasury shares, fractional entitlements, record dates, legal, regulatory or practical
problems in, or under the laws of, any territory or the requirements of any regulatory
body or stock exchange or any other matters (including such problems arising
by virtue of equity securities being represented by depositary receipts); and
(b) the allotment of equity securities and the sale of treasury shares (other than under
paragraph (a) of this resolution) up to an aggregate nominal amount of £25,000,
and shall expire on the earlier of 8 March 2023 and the conclusion of the annual general
meeting of the Company to be held in 2023, save that the Company may before such
expiry make an offer or enter into an agreement which would or might require equity
securities to be allotted after such expiry and the Directors may allot equity securities in
pursuance of such an offer or agreement as if the power conferred hereby had not expired.
12. That, subject to the passing of Resolution 10 proposed at the annual general meeting
of the Company convened for 8 March 2022 (‘Resolution 10’) and in addition to any
authority granted pursuant to Resolution 11 proposed at the annual general meeting of
the Company convened for 8 March 2022, the Directors of the Company be and are
hereby generally empowered pursuant to sections 570 and 573 of the Companies Act
2006 (the ‘Act’) to allot equity securities (within the meaning of section 560(1) of the
Act) (including the grant of rights to subscribe for, or to convert any securities into,
ordinary shares of £0.01 each in the capital of the Company (‘Ordinary Shares’)) for
cash pursuant to the authorities conferred by Resolution 10 and/or by way of a sale of
treasury shares within the meaning of section 560(3) of the Act, as if section 561(1) of
the Act did not apply to any such allotment or sale, provided that this power shall be:
(a)
limited to the allotment of equity securities and the sale of treasury shares for cash
up to an aggregate nominal amount of £25,000; and
(b) used only for the purposes of financing (or refinancing, if the authority is to be used
within six months after the original transaction) a transaction which the Directors of
the Company determine to be an acquisition or other capital investment of a kind
contemplated by the Statement of Principles on Disapplying Pre-Emption Rights
most recently published by the Pre-Emption Group prior to the passing of this
resolution,
Financials
98
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
and shall expire on the earlier of 8 March 2023 and the conclusion of the annual general
meeting of the Company to be held in 2023, save that the Company may before such
expiry make an offer or enter into an agreement which would or might require equity
securities to be allotted after such expiry and the Directors may allot equity securities in
pursuance of such an offer or agreement as if the power conferred hereby had not expired.
13. That, the Company be and is hereby generally authorised pursuant to section
701 of the Companies Act 2006 (the ‘Act’) to make market purchases (within
the meaning of section 693(4) of the Act) of ordinary shares of £0.01 each in the
capital of the Company (‘Ordinary Shares’) on such terms and in such manner as
the Directors of the Company may from time to time determine, provided that:
(a)
the aggregate number of such Ordinary Shares hereby authorised to be acquired by
the Company shall not exceed 5,000,000;
(b) the price that may be paid by the Company for any of its Ordinary Shares shall not
be less than £0.01, being the nominal value of each Ordinary Share, and shall not be
greater than the higher of, exclusive of expenses:
(i) an amount equal to 105% of the average trading price of the Ordinary Shares
as derived from the middle market quotations for an Ordinary Share on the
London Stock Exchange Daily Official List for the five trading days immediately
preceding the date on which a share is contracted to be purchased; and
(ii)
the higher of the price of the last independent trade and the highest current
independent bid on the trading venue where the purchase is carried out, and
unless previously revoked, renewed, extended or varied, the authority hereby conferred
shall expire on the earlier of 8 March 2023 and the conclusion of the annual general meeting
of the Company to be held in 2023, save that the Company may before such expiry make an
offer or enter into an agreement which would or might require such purchases of Ordinary
Shares to be carried out after such expiry and the Directors may carry out such purchases in
pursuance of such an offer or agreement as if the power conferred hereby had not expired.
By order of the Board
Catherine Bowen
Company Secretary
Date: 31 January 2022
Registered Office: Haramead Business Centre, Humberstone Road, Leicester, Leicestershire,
LE1 2LH
Financials
99
NOTES
1. ATTENDING THE ANNUAL GENERAL MEETING IN PERSON
Although in normal circumstances members are encouraged to attend the Annual General
Meeting in person, in light of the current pandemic, members are strongly encouraged not to
attend the Annual General Meeting in person. If these arrangements change, members will be
notified by the Company via Regulatory Information Service.
2. ONLINE VOTING
Members may vote online at www.signalshares.com. To register for this service, members will
need their Investor Code, which can be found on their share certificate. To be valid, an online
vote must be submitted no later than 48 hours (excluding non-working days) before the time of
the Annual General Meeting or any adjournment of that meeting.
The submission of an online vote will not prevent a member from attending the Annual General
Meeting and voting in person.
3. APPOINTMENT OF PROXIES
Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend,
speak and vote at the Annual General Meeting. A proxy need not be a member of the Company
but must attend the Annual General Meeting to represent a member. To be validly appointed,
a proxy must be appointed using the procedures set out in these notes. If members wish their
proxy to speak on their behalf at the meeting, members will need to appoint their own choice
of proxy (not the Chairman of the Annual General Meeting) and give their instructions directly
to them. However, in light of the restrictions on attendance at the Annual General Meeting
outlined above, we strongly encourage all shareholders to exercise their vote by appointing
the Chairman of the Annual General Meeting as their proxy and providing voting instructions in
advance of the Annual General Meeting.
Members can only appoint more than one proxy where each proxy is appointed to exercise rights
attached to different shares. Members cannot appoint more than one proxy to exercise the rights
attached to the same share(s). If a member wishes to appoint more than one proxy, they should
contact the Registrar at Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1
4DL or by telephone on 0371 664 0391 if calling from the United Kingdom, or +44(0)371 664
0391 if calling from outside the United Kingdom. Calls are charged at the standard geographical
rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 9.00 a.m. – 5.30 p.m. (London time) Monday to Friday
excluding public holidays in England and Wales.
However, please note the restrictions on attendance at the Annual General Meeting outlined
above and the impact this will have on multiple proxy appointments. A member may instruct their
proxy to abstain from voting on any resolution to be considered at the Annual General Meeting
by marking the ‘Vote Withheld’ option when appointing their proxy. It should be noted that a
vote withheld is not a vote in law and will not be counted in the calculation of the proportion of
votes ‘For’ or ‘Against’ the resolution.
Financials
100
NOTES
CONTINUED
In usual circumstances, the appointment of a proxy will not prevent a member from attending
the Annual General Meeting and voting in person if he or she wishes. However, as highlighted
above, in light of the continuing guidelines restricting social gatherings as a result of COVID-19,
members are requested not to attend the Annual General Meeting and restrictions on entry will
be in place.
4. APPOINTMENT OF A PROXY USING A FORM OF PROXY
Members may request a hard copy proxy form directly from the Registrar on 0371 664 0330.
(Calls are charged at the standard geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate. Lines open between 09:00
– 17:30 (London Time), Monday to Friday excluding public holidays in England and Wales).
To be valid, a Form of Proxy or other instrument appointing a proxy, together with any power of
attorney or other authority under which it is signed or a certified copy thereof, must be received
by post or (during normal business hours only) by hand by the Registrar at Link Group, PXS 1,
Central Square, 29 Wellington Street, Leeds, LS1 4DL, no later than 48 hours before the time of
the Annual General Meeting or any adjournment of that meeting.
5. APPOINTMENT OF A PROXY THROUGH CREST
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so by using the procedures described in the CREST Manual and by
logging on to the following website: www.euroclear.com/CREST. CREST personal members or
other CREST sponsored members, and those CREST members who have appointed (a) voting
service provider(s), should refer to their CREST sponsor or voting service provider(s) who will be
able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the
appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in
accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information
required for such instruction, as described in the CREST Manual. The message, regardless of
whether it constitutes the appointment of a proxy, or is an amendment to the instruction given
to a previously appointed proxy must, in order to be valid, be transmitted so as to be received
by the Registrar (ID RA10) no later than 48 hours before the time of the Annual General Meeting
or any adjournment of that meeting. For this purpose, the time of receipt will be taken to be the
time (as determined by the timestamp applied to the message by the CREST Application Host)
from which the Registrar is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service provider(s)
should note that Euroclear UK & Ireland Limited does not make available special procedures in
CREST for any particular message. Normal system timings and limitations will, therefore, apply in
relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
Financials
101
NOTES CONTINUED
CREST personal member, or sponsored member, or has appointed (a) voting service provider(s),
to procure that their CREST sponsor or voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable, their CREST sponsors
or voting system providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 (as amended).
6. APPOINTMENT OF A PROXY BY JOINT HOLDERS
In the case of joint holders, where more than one of the joint holders purports to appoint one
or more proxies, only the purported appointment submitted by the most senior holder will be
accepted. Seniority shall be determined by the order in which the names of the joint holders
stand in the Company’s register of members in respect of the joint holding.
7. CORPORATE REPRESENTATIVES
Any corporation which is a member can appoint one or more corporate representatives. Members
can only appoint more than one corporate representative where each corporate representative
is appointed to exercise rights attached to different shares. Members cannot appoint more
than one corporate representative to exercise the rights attached to the same share(s). Please,
however, note the restrictions on attendance at the Annual General Meeting in light of the
ongoing COVID-19 restrictions. In light of these restrictions, corporate members are encouraged
to appoint the Chairman of the Annual General Meeting as their proxy and to provide voting
instructions in advance of the Annual General Meeting.
8. ENTITLEMENT TO ATTEND AND VOTE
To be entitled to attend and vote at the Annual General Meeting (and for the purpose of
determining the votes they may cast), members must be registered in the Company’s register of
members at 6:00 p.m. on 4th March 2022 (or, if the Annual General Meeting is adjourned, at 6:00
p.m. on the day two days (excluding non-working days) prior to the adjourned meeting). Changes
to the register of members after the relevant deadline will be disregarded in determining the
rights of any person to attend and vote at the Annual General Meeting. Please, however, note
the restrictions on attendance at the Annual General Meeting in light of the ongoing COVID-19
pandemic.
9. VOTING RIGHTS
As at 26th January 2022 the Company’s issued share capital consisted of 50,000,000 ordinary
shares of £0.01 each carrying one vote each, 12,878 shares are held by the Company in treasury.
Therefore, the total voting rights in the Company as at 26th January 2022 were 49,987,122
votes.
Financials
102
Shoe Zone plc
Annual Report & Accounts 2021
www.shoezone.com
email: investorrelations@shoezone.com