REG - Comptoir Group PLC - Preliminary Results <Origin Href="QuoteRef">COM.L</Origin> - Part 3

ComptoirAnnouncement

12/04/2017 07:06

- Part 3: For the preceding part double click  ID:nRSL2589Cb 

2,860,563                    572,600            1,703,256                     1,461,043              110,529                         
 
 
*excluding corporation tax 
 
Fair value of financial assets and liabilities 
 
All financial assets and liabilities are accounted for at cost and the
Directors consider the carrying value to approximate their fair value. 
 
27.          Financial risk management 
 
The Group's and Company's financial instruments comprise investments, cash and
liquid resources, and various items, such as trade receivables and trade
payables that arise directly from its operations.  The vast majority of the
Group's and Company's financial investments are denominated in sterling. 
 
Neither the Group nor the Company enter into derivatives or hedging
transactions. It is, and has been throughout the period under review, the
Group's and Company's policy that no trading in financial instruments shall be
undertaken. 
 
The main risks arising from the Group's and Company's financial instruments
are credit risk, liquidity risk, foreign currency risk, liquidity risk and
investment risk. The Group does not have a material exposure to foreign
currency risk. The board reviews policies for managing each of these risks,
and they are summarised as follows: 
 
Credit Risk 
 
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial losses to the Group.
Counterparties for cash balances are with large established financial
institutions. The Group is exposed to credit related losses in the event of
non-performance by the financial institutions but does not expect them to fail
to meet their obligations. 
 
As a retail business with trading receipts settled either by cash or credit
and debit cards, there is very limited exposure from customer transactions.
The Group is exposed to credit risk in respect of commercial discounts
receivable from suppliers but the Directors believe adequate provision has
been made in respect of doubtful debts and there are no material amounts past
due that have not been provided against. 
 
The carrying amount of financial assets recorded in the financial statements,
net of any allowances for losses, represents the Group's maximum exposure to
credit risk 
 
Liquidity risk 
 
The Group has built an appropriate mechanism to manage liquidity risk of the
short, medium and long-term funding and liquidity management requirements.
Liquidity risk is managed through the maintenance of adequate cash reserves
and bank facilities by monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. The Group's loan
facilities (as set out in note 17), ensure continuity of funding, provided the
Group continues to meet its covenant requirements (as detailed in the report
of the Directors). 
 
Foreign currency risk 
 
The Group is not materially exposed to changes in foreign currency rates and
does not use foreign exchange forward contracts. 
 
Interest rate risk 
 
Exposure to interest rate movements has been controlled historically through
the use of floating rate debt to achieve a balanced interest rate profile. The
Group does not currently have any interest rate swaps in place as the
continued reduction in the level of debt combined with current market
conditions results in a low level of exposure. The Group's exposure will
continue to be monitored and the use of interest rate swaps may be considered
in the future. 
 
Investment risk 
 
Investment risk includes investing in companies that may not perform as
expected. The group's investment criteria focus on the quality of the business
and the management team of the target company, market potential and the
ability of the investment to attain the returns required within the time
horizon set for the investment. Due diligence is undertaken on each
investment. The group regularly reviews the investments in order to monitor
the level of risk and mitigate exposure where appropriate. 
 
28.          Lease commitments 
 
Finance lease commitments 
 
Future lease payments in respect of finance leases are due as follows: 
 
                                                                                                            Minimum lease payments  
                                                                                                                                    Year ended 31 December 2016£  Year ended 31 December 2015£  
 Within one yearWithin two and five yearsAfter five years Less future interest payments                                             22,081-- (160)                1,600,68622,083- (51,197)     
 Present value of lease obligations                                                                                                 21,921                        1,571,572                     
 All finance lease commitments at the year end date 31 December 2016 are due to be paid within one year.  
 Analysed as:Amounts due for settlement within one yearAmounts due for settlement after one year                                    21,921 -                      1,552,751 18,821              
 Present  value of lease obligations                                                                                                21,921                        1,571,572                     
 
 
Lease commitments are in respect of rentals payable by the company or group
for certain items of plant and machinery. Leases include purchase options at
the end of lease periods and no restrictions are placed on the use of the
assets. The average lease term is 3 years. All leases are on a fixed repayment
basis and no arrangements have been entered into for contingent lease
payments. There are no finance leases where the Group itself is the lessor.
The interest rate applied in calculating the present value of the payments is
the incremental borrowing cost of the Group in relation to each lease, however
the time value of money is considered by the Directors to be insignificant in
the context of discounting the minimum lease payments and accordingly the
present value of the minimum lease payments is considered to be not materially
different from the absolute value. The fair value of the lease payments is
estimated as £21,921 (2015: £103,994). 
 
Operating lease commitments 
 
The Group has entered into a number of property leases on standard commercial
terms as lessee. There are no restrictions imposed by the Group's operating
lease arrangements, either in the current or prior year. 
 
At the reporting date the total future minimum rentals payable under
non-cancellable operating leases over the remaining lives of the leases are: 
 
                                                             31 December 2016£            31 December 2015£            
 Within one yearWithin two and five yearsAfter five years    2,247,0705,637,9676,125,427  1,209,4223,724,3133,611,945  
 Total                                                       14,010,464                   8,545,680                    
 
 
29.  Prior year adjustment 
 
 Changes to the balance sheet - Group Balances as restated before IFRS transition adjustments:  As previously reported £  Adjustment at 1 January 2015 £  Adjustment at 31 December 2015£  As restated  £  
 Non-current assets                                                                                                                                                                                        
 Property, plant & equipment                                                                    6,225,681                 1,472,000                       (59,275)                         7,638,406       
                                                                                                                                                                                                           
 Current liabilities                                                                                                                                                                                       
 Finance lease liabilities                                                                      -                         (1,491,475)                     30,431                           (1,461,043)     
                                                                                                                                                                                                           
                                                                                                6,225,681                 (19,475)                        (28,844)                         6,177,363       
                                                                                                                                                                                                           
 Capital and reserves                                                                                                                                                                                      
 Retained earnings                                                                              3,184,819                 (19,475)                        (28,844)                         3,136,500       
 
 
 Changes to the profit and loss account- Group Balances as restated before IFRS transition adjustments:  As previously reported£  Adjustment  £  As restated £  
 Profit for the financial period                                                                         998,651                  (28,844)       969,807        
 
 
In order to adjust a treatment of a lease made in prior periods with respect
to the classification of a leasehold interest in a property held by the Group,
during the current year a prior year adjustment has been made to change the
historical treatment of the lease. Previously, the lease had been treated as
an operating lease and rental payments were recognised within the income
statement of a subsidiary entity. Following a review of the facts, the lease
is now considered to have more closely met the definitions of a finance lease
rather than that of an operating lease and as such the carrying value of the
property has been retrospectively recognised in the accounts from the date the
lease was entered into, being September 2014. The comparative figures shown in
these accounts have been adjusted to include the leasehold investment at its
fair value of £1,472,000 brought forward as at 1 January 2015 and carried
forward as at 31 December 2015, as well as a finance lease liability
outstanding at 31 December 2015 of £1,461,043. The impact on brought forward
reserves is reflected in the table above. 
 
30.  Contingent liabilities 
 
The Group had no contingent liabilities at 31 December 2016 or 31 December
2015. 
 
31.  Capital commitments 
 
The Group had no capital commitments at 31 December 2016 or 31 December 2015. 
 
32.  Directors' transactions 
 
During the year Comptoir Group PLC paid a dividend of £39,188 (2015: £352,425)
to C Hanna, who is a director and shareholder of Comptoir Group PLC. 
 
Comptoir Group PLC paid a dividend of £39,188 (2015: £317,250) to A Kitous,
who is a director and shareholder of Comptoir Group PLC. 
 
Included within trade and other payables at the reporting date is £Nil (2015:
£340,850) which is owed to the director, A Kitous and £Nil (2015: £231,750)
which is owed to director, C Hanna 
 
33.  Related party transactions 
 
Remuneration in respect of key management personnel, defined as the Directors
for this purpose, is disclosed in note 6. Further information concerning the
Directors' remuneration is provided in the Directors' remuneration report. 
 
70,000 and 150,000 of the EMI options that were issued on the 14 June 2016 and
are detailed in note 23, were granted to M Kitous, brother of Director, A
Kitous and P Hanna, son of Director, C Hanna, respectively. 
 
All of the unapproved share options that were issued on the 14 June 2016 and
are detailed in note 23, were issued to family members of J Kaye, a director
of the company. The exercise price of these options is £0.50, the term to
expiration is 10 years and all of the unapproved options have the same vesting
conditions as the approved options attached to them. 
 
During the year, the Group paid fees of £10,417 (2015: £25,000) to Messrs
Gerald Edelman, a firm in which director R Kleiner is a partner, in respect of
part of his non-executive director fees. Also during the year the Group paid
further amounts totalling £33,433 to Messrs Gerald Edelman, in respect of
accountancy and corporate finance services provided to the Group. 
 
34. Ultimate controlling party 
 
The ultimate controlling party is A Kitous, one of the Group's directors due
to his ownership of 52.1% of the share capital at the year end. 
 
35. Subsequent events 
 
There were no significant subsequent events which the directors consider
require disclosure within these financial statements. 
 
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