- Part 3: For the preceding part double click ID:nRSA4576Hb
The balance of goodwill remaining is the carrying value that arose on the acquisition of Surface Coatings Ltd in 1998.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be
impaired.
The recoverable amounts are determined from value in use calculations. The key assumptions for the value in use
calculations are those regarding the discount rates, growth rates and expected changes to, selling prices and direct costs
during the period. Management estimates discount rates based on the Group's weighted average cost of capital. The growth
rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and
expectations of future changes in the market. Discounted cash flows are calculated using a post-tax rate of 12.0% (2014:
12.0%).
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next
five years and extrapolates cash flows for the following five years. The growth rate applied does not exceed the average
long-term growth rate for the relevant markets. There are no reasonable changes that would result in the carrying value of
goodwill being reduced to its recoverable amount.
As a result of the annual test of impairment of goodwill, no impairment has been identified for the current period.
12 Property, plant and equipment
Land and buildings Fixtures
Short and Motor
Freehold leasehold fittings vehicles Total
Cost £'000 £'000 £'000 £'000 £'000
At 28 September 2013 15,360 1,842 56,350 166 73,718
Additions 2,872 - 8,345 15 11,232
Disposals (281) (10) (1,236) (61) (1,588)
At 27 September 2014 17,951 1,832 63,459 120 83,362
Additions 1,129 231 10,643 5 12,007
Disposals (520) (109) (1,793) (67) (2,488)
At 3 October 2015 18,560 1,954 72,309 58 92,881
Accumulated depreciation and impairment
At 28 September 2013 1,619 1,678 35,009 64 38,370
Charge for the period 242 51 4,228 32 4,553
Provision for impairment - - 389 10 399
Eliminated on disposals (94) (10) (1,115) (35) (1,254)
At 27 September 2014 1,767 1,719 38,511 71 42,068
Charge for the period 290 38 4,896 19 5,243
Provision for impairment - - 266 - 266
Eliminated on disposals (11) (109) (1,627) (43) (1,790)
At 3 October 2014 2,046 1,648 42,046 47 45,787
Carrying amount
At 3 October 2015 16,514 306 30,263 11 47,094
At 27 September 2014 16,184 113 24,948 49 41,294
Freehold land and buildings include £4,104,000 of freehold land (2014: £4,104,000) on which no depreciation has been
charged in the current period. There is no material difference between the carrying and market values.
Cumulative finance costs capitalised in the cost of tangible fixed assets amount to £nil (2014: £nil).
Contractual commitments for the acquisition of property, plant and equipment are detailed in note 28.
During the period, the Group has closed nine stores in the UK. As the fixtures and fittings within these stores cannot be
re-used in other locations within the Group, the carrying value of these assets has been fully provided for in the period,
with the associated impairment charge of £266,000 (2014: £389,000) included within other operating expenses.
13 Subsidiaries
A list of all subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in
note 3 to the Company's separate financial statements.
14 Trade and other receivables
2015 2014
£'000 £'000
Amounts falling due within one year:
Amounts receivable for the sale of goods 712 740
Allowance for doubtful debts (27) (45)
Other debtors and prepayments
-Rent and rates 4,808 3,324
-Other 2,548 1,781
8,041 5,800
The Directors consider that the carrying amount of trade and other receivables at 3 October 2015 and 27 September 2014
approximates to their fair value on the basis of discounted cash flow analysis.
Credit risk
The Group's principal financial assets are bank balances and cash and trade receivables.
The Group considers that it has no significant concentration of credit risk. The majority of sales in the business are
cash based sales in the stores.
Total trade receivables (net of allowances) held by the Group at 03 October 2015 amounted to £0.7 million (2014: £0.7
million). These amounts mainly relate to sundry trade accounts and Tesco Clubcard Scheme generated sales. In relation to
these sales, the average credit period taken is 51 days (2014: 61 days) and no interest is charged on the receivables.
Trade receivables between aged over 60 days are provided for based on estimated irrecoverable amounts from the sale of
goods, determined by reference to past default experience.
Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer's
credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed periodically.
Of the trade receivables balance at the end of the year, £146,000 (2014: £120,000) is due from Tesco Plc, the Group's
largest customer.
Included in the Group's trade receivable balance are debtors with a carrying amount of £96,000 (2014: £42,000) which are
past due at the reporting date for which the Group has not provided as there has not been a significant change in credit
quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.
Ageing of past due but not impaired receivables
2015 2014
£'000 £'000
Greater than 60 days 96 42
The allowance for doubtful debts was £27,000 by the end of the period (2014: £45,000). Given the minimal receivable balance, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.
The allowance for doubtful debts includes £27,000 relating to individually impaired trade receivables (2014: £45,000) which
are due from companies that have been placed into liquidation.
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
15 Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short term bank deposits (with associated right of set off)
net of bank overdrafts, with an original maturity of three months or less. The carrying amount of these assets
approximates their fair value. A breakdown of significant bank and cash balances by currency is as follows:
2015 2014
£'000 £'000
Sterling 16,519 19,367
US Dollar 14 31
Euro 31 149
Total cash and cash equivalents 16,564 19,547
16 Other financial liabilities
Trade and other payables
2015 2014
£'000 £'000
Amounts falling due within one year
Trade payables 15,505 18,193
Other payables 4,940 5,841
Accruals and deferred income 14,041 12,206
34,486 36,240
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The average
credit period taken for trade purchases is 46 days (2014: 58 days). No interest is charged on these payables.
The Directors consider that the carrying amount of trade payables at 3 October 2015 and 27 September 2014 approximates to
their fair value on the basis of discounted cash flow analysis.
17 Bank loans
2015 2014
£'000 £'000
Bank loans (all sterling) 44,576 49,467
The borrowings are repayable as follows:
On demand or within one year - -
In the second year - -
In the third to fifth year 45,000 50,000
45,000 50,000
Less: total unamortised issue costs (424) (533)
44,576 49,467
Issue costs to be amortised within 12 months 116 114
Amount due for settlement after 12 months 44,692 49,581
The Directors consider that the carrying amount of the bank loan at 3 October 2015 and 27 September 2014 approximates to
its fair value since the amounts relate to floating rate debt.
17 Bank loans (continued)
The average weighted interest rates paid on the loan were as follows:
2015 2014
% %
Loans 2.36 3.05
The Group borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.
During the previous period the Group agreed a new five year revolving credit facility of £50.0 million, expiring 1 June
2019. As at the financial period end £45.0 million of this facility was drawn (2014: £50.0 million). The loan facility
contains financial covenants which are tested on a bi-annual basis.
At 03 October 2015, the Group had available £5.0 million (2014: £nil) of undrawn committed banking facilities.
18 Financial instruments
Financial liabilities held for trading were reclassified in the prior period in order to more appropriately reflect the
requirements of IAS1. Classification as non-current liabilities ensures the instrument mirrors the cash flows of the loan
facility, which it is in place to hedge against.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group's overall
strategy remains unchanged from 2014. The capital structure of the Group consists of debt, which includes the borrowings
disclosed in note 16, cash and cash equivalents disclosed in note 14 and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings as disclosed in notes 19 to 25.
The Group is not subject to any externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 2q to the financial statements.
Categories of financial instruments
Carrying Value and Fair Value
2015 2014
£'000 £'000
Financial assets
Loans and receivables (including cash and cash equivalents) 17,249 20,242
Fair value through profit and loss 117 -
Financial liabilities
Fair value through profit and loss - 18
Amortised cost 60,197 66,579
The Group considers itself to be exposed to risks on financial instruments, including market risk (including currency
risk), credit risk, liquidity risk and cash flow interest rate risk.
The Group seeks to mitigate the effects of these risks by using derivative financial instruments to hedge these risk
exposures economically. The use of financial derivatives is governed by the Group's policies approved by the Board of
Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial
derivatives and non-derivative financial instruments, and the investment of excess liquidity. The Group does not enter into
or trade financial instruments, including derivative financial instruments, for speculative purposes.
18 Financial instruments (continued)
Market risk
The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates. The Group enters into forward foreign exchange contracts to hedge the exchange rate risk arising on the
import of goods.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting
date are as follows:
Assets Liabilities
2015 2014 2015 2014
£'000 £'000 £'000 £'000
Euro 31 149 2,201 1,502
US dollar 14 31 500 792
Foreign currency sensitivity analysis
The Group is mainly exposed to the currency of China and Brazil (US dollar currency) and to various European countries
(Euro) as a result of inventory purchases. The following table details the Group's sensitivity to a 10% increase and
decrease in Sterling against the relevant foreign currencies. 10% represents management's assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive
number below indicates an increase in profit and other equity where Sterling strengthens 10% against the relevant
currency.
2015 2014
£000 £000
Profit or Loss movement on a 10% strengthening in Sterling against the Euro 197 123
Profit or Loss movement on a 10% strengthening in Sterling against the US Dollar 44 69
Profit or Loss movement on a 10% weakening in Sterling against the Euro (241) (150)
Profit or Loss movement on a 10% weakening in Sterling against the US Dollar (54) (85)
18 Financial instruments (continued)
Currency derivatives
The Group utilises currency derivatives to hedge significant future transactions and cash flows. The Group uses foreign
currency forward contracts in the management of its exchange rate exposures. The contracts are denominated in US dollars
and Euros.
At the balance sheet date, the total notional amounts of outstanding forward foreign exchange contracts that the Group has
committed to are as below:
2015 2014
£'000 £'000
Forward foreign exchange contracts 6,597 5,766
These arrangements are designed to address significant exchange exposures for the first half of 2015 and are renewed on a
revolving basis as required.
At 3 October 2015 the fair value of the Group's currency derivatives is a £117,000 gain within prepayments (note 15) (2014:
a liability of £18,000 held in accruals and deferred income). These amounts are based on the market value of equivalent
instruments at the balance sheet date.
Gains of £135,000 are included in finance costs (note 7) (2014: £110,000 gain).
Interest rate risk management
The Group is exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. Due to the
reduced level of floating rate borrowings and the current low level of interest rates, management have not deemed it
necessary to implement measures that would mitigate this risk. The Group's exposures to interest rates on financial assets
and financial liabilities are detailed in the liquidity risk management section of this note.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and
non-derivative instruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the
amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis points increase or
decrease is used when reporting interest rate risk internally to key management personnel and represents management's
assessment of the possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's profit
would be impacted as follows:
50 basis points increase in interest rates 50 basis points decrease in interest rates
2015 2014 2015 2014
£'000 £'000 £'000 £'000
(Loss) or profit (184) (195) 184 195
The Group's sensitivity to interest rates mainly relates to the revolving credit facility.
18 Financial instruments (continued)
Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss
to the Group. Management has considered the counterparty risk associated with the cash and derivative balances and do not
consider there to be a material risk. The Group has a policy of only dealing with creditworthy counterparties. The Group's
exposure to its counterparties is reviewed periodically. Trade receivables are minimal consisting of a number of insurance
companies and sundry trade accounts, further information is provided in note 14.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents
the Group's maximum exposure to credit risk without taking account of the value of any collateral obtained.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk
by maintaining adequate reserves, banking facilities and borrowing facilities by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities. The
tables have been drawn up based on the undiscounted cash flows (and on the assumption that the variable interest rate
remains constant at the latest fixing level of 2.28688% (2014: 2.45694%)) of financial liabilities based on the earliest
date on which the Group can be required to pay. The table includes both interest and principal cash flows.
2015 Less than 1 month 1-3 months 3 months to 1 year 1-5 Years Total
£'000 £'000 £'000 £'000 £'000
Non-interest bearing 20,444 - - - 20,444
Variable interest rate instruments 78 186 792 47,823 48,879
2014 Less than 1 month 1-3 months 3 months to 1 year 1-5 Years Total
£'000 £'000 £'000 £'000 £'000
Non-interest bearing 24,034 - - - 24,034
Variable interest rate instruments 95 5,199 882 49,210 55,386
The Group is financed through a £50 million (2014 £50 million), revolving credit facility of which £45 million (2014 £50
million) was utilised. At the balance sheet date the total unused amount of financing facilities was £5 million (2014
£nil). The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial
assets.
18 Financial instruments (continued)
The following table details the Group's liquidity analysis for its derivative financial instruments. The table has been
drawn up based on the undiscounted net cash inflows/(outflows) on the derivative instruments that settle on a net basis and
the undiscounted gross inflows and (outflows) on those derivatives that require gross settlement. When the amount payable
or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest and foreign
currency rates as illustrated by the yield curves existing at the reporting date.
2015 Less than 1 month 1-3 Months 3 months to 1 year 1-5 Years 5+ Years Total
£'000 £'000 £'000 £'000 £'000 £'000
Foreign exchange forward contracts payments - (3,331) (3,267) - - (6,597)
Foreign exchange forward contracts receipts - 3,358 3,362 - - 6,721
2014 Less than 1 month 1-3 Months 3 months to 1 year 1-5 Years 5+ Years Total
8,000 8,000
Authorised 37,000,000 (2014: 37,000,000) redeemable B shares of £0.54 each 19,980 19,980
Authorised 124,890,948 (2014: 124,890,948) irredeemable C shares of £0.001 each 125 125
28,105 28,105
Issued and fully-paid 193,700,459* (2014: 193,636,240*) ordinary shares of 3.33p each (2014: 3.33p) 6,457 6,455
Total 6,457 6,455
During the period the Group issued 64,219 (2014: 1,508,571) ordinary shares with a nominal value of £2,141 (2014: £50,286)
under share option schemes for an aggregate cash consideration of £28,733 (2014: £438,111).
* During the period £504,000 (2014: £650,000) shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the
Group.
21 Share premium
2015 2014£'000
£'000
At start of period 1,879 1,492
Premium on issue of new shares 27 387
At end of period 1,906 1,879
22 Own shares
2015 2014£'000
£'000
At start of period (656) (10)
Acquired in the period (504) (650)
Disposed of on issue in the period (530) 4
At end of period (630) (656)
A subsidiary of the Group holds 799,000 (2014: 923,000) shares with a nominal value of £27,000 acquired for an average
price of £0.79 per share (2014: £31,000 acquired for an average price of £0.71 per share) and therefore these have been
classed as own shares.
23 Merger reserve
2015 2014£'000
£'000
At start and end of period (399) (399)
The merger reserve arose on pre 2006 acquisitions, the Directors do not consider this to be distributable as at 3 October
2015 (2014: same).
24 Share-based payment reserve
2015 2014£'000
£'000
At start of period 1,941 649
Credit to equity for equity-settled share based payments 879 1,292
At end of period 2,820 1,941
The share-based payment reserve has arisen on the fair valuation of save as you earn schemes and Long-term incentive plans.
The Directors do not consider this to be distributable as at 3 October 2015 (2014: same).
25 Capital redemption reserve
2015 2014£'000
£'000
At start and end of period 20,359 20,359
The capital redemption reserve arose on the cancellation of treasury shares and as a result of a share reorganisation in
2006. The Directors do not consider this to be distributable as at 3 October 2015 (2014: same).
26 Retained losses
£'000
At 28 September 2013 (38,679)
Dividends (note 8) (3,175)
Deferred tax on sharesave scheme taken directly to equity 606
Net profit for the period 12,512
At 27 September 2014 (28,736)
Dividends (note 8) (4,534)
Deferred and current tax on sharesave scheme taken directly to equity 490
Net profit for the period 13,065
At 3 October 2015 (19,715)
27 Financial commitments
a) Capital commitments
At the end of the period there were capital commitments contracted of £114,000 (2014: £164,000).
b) Pension arrangements
The Group operates a defined contribution pension scheme for employees. The assets of the schemes are held separately from
those of the Group in independently administered funds. The pension cost charge represents contributions payable by the
Group to the funds and amounted to £848,000 (2014: £652,000). At the period end there were no outstanding contributions
(2014: same).
c) Lease commitments
Minimum future sublease payments expected to be received under non-cancellable subleases amount to £3,093,000 (2014:
2,652,000).
The Group has entered into non-cancellable operating leases in respect of motor vehicles, equipment and land and
buildings.
Minimum lease payments under operating leases recognised as an expense for the period were £23,388,000 (2014: £21,168,000)
which includes property service charges of £783,000 (2014: £767,000).
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable
operating leases which fall due as follows:
2015 2014
Land and Land and
buildings Other buildings Other
£'000 £'000 £'000 £'000
- within 1 year 21,868 847 19,936 868
- within 2 - 5 years 69,785 797 66,554 949
- after 5 years 54,619 - 58,285 -
146,272 1,644 144,775 1,817
Operating lease payments primarily represent rentals payable by the Group for certain of its office and store properties.
Leases are negotiated for an average term of 15 years and rentals are fixed for an average of 5 years (2014: 5).
28 Share-based payments
The Group operates six share option schemes in relation to Group employees.
Share based payment plans
Employee share purchase plans are open to almost all employees and provide for a purchase price equal to the daily average
market price on the date of grant, less 20%. The shares can be purchased during a two-week period each financial period.
The shares so purchased are generally placed in the employee share savings plan for a 3 or 5 year period.
28 Share-based payments (continued)
Movements in share based payment plan options are summarised as follows:
2015Number of share options 2015Weighted average exercise price 2014 Number of share options 2014 Weighted average exercise price
£ £
Outstanding at beginning of period 2,485,176 0.37 3,352,424 0.37
Issued during the period 887,775 0.98 910,851 0.98
Expired during the period (339,627) 0.31 (269,528) 0.31
Exercised during the period (64,219) 0.29 (1,508,571) 0.29
Outstanding at end of period 2,969,105 0.63 2,485,176 0.63
Exercisable at end of period - - - -
The inputs to the Black-Scholes Model for the above 3 (2014: 3 and 5) year plans are as follows:
2015 2014
Weighted average share price - pence 90.5 79.0
Weighted average exercise price - pence 71.1 63.2
Expected volatility - % 42.2, 36.4 and 35.1 42.2 and 43.7
Expected life - years 3 3 or 5
Risk - free rate of interest - % 0.42 0.60
Dividend yield - % 2.03 2.79
Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous 3
years (2014: 3 or 5 years). The expected risk used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioural forces.
Deferred bonus long-term incentive plan
During the financial period ended 28 September 2013 an award was made under the deferred bonus long term incentive plan
(LTIP) for the Senior Management Team. Under this bonus scheme 25% of the award (net of tax) is deferred in the form of
shares for a two year period, with a matching share award (on a gross basis) that vests at the end of two years subject to
the achievement of performance conditions relating to continuing employment within the business and EBITDA earnings growth
measured over the two year period.
This scheme was replaced in January 2013 when a new Long Term Incentive Plan was approved by shareholders and as such there
will be no further awards under this scheme.
The total number of shares awarded was nil (2014:191,084), and the fair value of these deferred shares as at 3 October 2015
was £nil (2014: £88,000).
The total number of matching shares that are expected to be awarded, subject to fulfilment of the performance conditions is
nil (2014: 363,614) and the fair value of these matching shares as at 3 October 2015 was £nil (2014: £167,000). No options
were granted or exercised during the period (2014: None). There were no options outstanding at 3 October 2015 (2014:
same)...
28 Share-based payments (continued)
The inputs to the Black-Scholes Model are as follows:
2015 2014
Weighted average share price - pence - 46.0
Weighted average exercise price - pence £nil
Expected volatility - % - 36.9
Expected life - years - 2
Risk - free rate of interest - % - 0.3
The scheme closed at the end of the prior period. In the prior period expected volatility was determined by calculating the
historical volatility of the Group's share price over the financial periods 2012/13 and 2013/14. The expected risk used in
the model was adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions
and behavioural forces.
Long Term Incentive Plan
During the financial period, a new three year Long Term Incentive plan was approved by shareholders. Under this plan a
number of share options were granted to senior management. These options will vest in November 2017 subject to the
achievement of certain performance criteria.
The total number of share options granted was 1,422,348 (2014: 2,073,474) and the fair value of these options as at 3
October 2015 was £1,439,000 (2014: £929,000).
The inputs to the Black-Scholes Model are as follows:
2015 2014
Weighted average share price - pence 106.0 -
Weighted average exercise price - pence £nil -
Expected volatility - % 35.1 -
Expected life - years 3 -
Risk - free rate of interest - % 0.5 -
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2012/13,
2013/14 and 2014/15 financial periods. The expected risk used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
During the 2012/13 financial period, a three year Long Term Incentive plan was approved by shareholders. Under this plan a
number of share options were granted to senior management. These options will vest in December 2015 subject to the
achievement of certain performance criteria.
The total number of share options granted was 2,073,474 (2014: 2,073,474) and the fair value of these options as at 3
October 2015 was £929,000 (2014: £929,000).
28 Share-based payments (continued)
The inputs to the Black-Scholes Model are as follows:
2015 2014
Weighted average share price - pence 46.3 46.3
Weighted average exercise price - pence £nil £nil
Expected volatility - % 42.2 42.2
Expected life - years 3 3
Risk - free rate of interest - % 0.6 0.6
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods (2014: 2011/12, 2012/13 and 2013/14 financial period). The expected risk used in the
model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions
and behavioural forces.
During the previous financial period, a three year Long Term Incentive plan was approved by shareholders. Under this plan
a number of share options were granted to senior management. These options will vest in December 2016 subject to the
achievement of certain performance criteria.
The total number of share options granted was 1,441,695 (2014: 1,532,730) and the fair value of these options as at 03
October 2015 was £1,296,000 (2014: £1,351,000).
The inputs to the Black-Scholes Model are as follows:
2015 2014
Weighted average share price - pence 93.2 93.2
Weighted average exercise price - pence £nil £nil
Expected volatility - % 42.2 42.2
Expected life - years 3 3
Risk - free rate of interest - % 1.1 1.2
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods (2014: 2011/12, 2012/13 and 2013/14 financial periods). The expected risk used in the
model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions
and behavioural forces.
28 Share-based payments (continued)
Management Options
During the 2012/13 financial period members of the Management team were granted share options that are due to vest in
October 2015, subject to the fulfilment of criteria. The number of shares that are expected to be awarded is 260,000
(2014: 260,000) and the fair value of these shares as at 3 October 2015 was £127,000 (2014: £127,000).
The inputs to the Black-Scholes Model are as follows:
2015 2014
Weighted average share price - pence 46.3 46.3
Weighted average exercise price - pence £nil £nil
Expected volatility - % 42.2 42.2
Expected life - years 3 3
Risk - free rate of interest - % 0.56 0.56
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods. The expected risk used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
In total, the Group recognised a total expense of £1,409,000 (2014: £1,292,000) relating to share based payments.
29 Related party transactions
S.K.M. Williams is a related party by virtue of his 9.99% shareholding (19,343,950 ordinary shares) in the Group's issued
share capital (2014: 10.6% shareholding of 20,593,950 ordinary shares).
At 3 October 2015 S.K.M. Williams was the landlord of four properties leased to Multi Tile Limited, a trading subsidiary of
Topps Tiles Plc, for £240,000 (2014: three properties for £162,000) per annum.
No amounts were outstanding with S.K.M. Williams at 3 October 2015 (2014: £nil).The lease agreements on all properties are
operated on commercial arm's length terms
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note. In accordance with the exemption available under IAS24.
The remuneration of the Board of Directors, who are considered key management personnel of the Group was £1.6 million
(2014: £1.6 million) including share based payments of £nil (2014: £193,000). Further information about the remuneration
of the individual Directors is provided in the Remuneration Report in the Annual Report.
Company balance sheet as at 3 October 2015
53 weeks ended 3 October2015 52 weeks ended 27 September 2014
Notes £'000 £'000
Fixed assets
Investments 3 493 3,059
__________ __________
Current assets
Debtors due within one year 4 10,554 5,306
Debtors due after one year 4 20,840 123,200
Cash at bank and in hand 15,179 18,689
__________ __________
46,573 147,195
Creditors: Amounts falling due within one year 5 (3,415) (5,197)
__________ __________
Net current assets 43,158 141,998
__________ __________
Net assets 43,651 145,057
__________ __________
Capital and reserves
Called-up share capital 6,7 6,457 6,455
Share premium 7 1,906 1,879
Share based payment reserve 7 3,354 1,945
Capital redemption reserve 7 20,359 20,359
Other reserve 7 6,200 6,200
Profit and loss account 7 5,375 108,219
__________ __________
Equity shareholders' funds 43,651 145,057
__________ __________
The financial statements of Topps Tiles Plc, Companies House number 3213782, were approved by the board of directors on 1
December 2015 and signed on its behalf by:
M T M Williams R Parker
Director Director
1 Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been
prepared under the historical cost convention and in accordance with United Kingdom Accounting Standards and law.
Based on a detailed review of the risks and uncertainties discussed within the Strategic and Operational Review, and
management's current expectations the Board believes that the Company will continue to meet all of its financial
commitments as they fall due and will be able to continue as a going concern.
The current economic climate creates a degree of uncertainty
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