Crawshaw Group Plc Annual Report Year ended 31 January 2013

Transcription

1 Crawshaw Group Plc Annual Report Year ended 31 January 2013

2 Crawshaw Group Plc We provide unrivalled knowledge of meat, with over 60 years experience. We source only from the best suppliers and all our meat is quality assured. Our operating company, Crawshaw Butchers, currently has 20 retail outlets and two distribution centres across Yorkshire, Humberside, Nottinghamshire and Lincolnshire. Contents Company Overview 01 Chairman s Statement 02 Board of Directors 04 Directors Report 05 Corporate Governance Statement 07 Report of the Remuneration Committee 08 Statement of Directors Responsibilities in respect of the Annual Report and the Financial Statements 09 Independent Auditor s Report to the Members of Crawshaw Group Plc 10 Consolidated Statement of Comprehensive Income 11 Balance Sheets 12 Consolidated Statement of Changes in shareholders Equity 13 Cash Flow Statements 14 Notes to the Financial Statements 15 Notice of Annual General Meeting 31 Form of Proxy 33 Notes 35 Directors and Advisors 36 Vision To grow and prosper by being the best at everything we do. Outlook The retail climate remains challenging; however I am encouraged by the continued improvements in trading over the first 12 weeks of the current year. Like for like sales are ahead, and we are particularly pleased with the further increases in gross margin and improvements in cost we are achieving.

3 01 Our Locations Stores Barnsley Beef Co Barnsley Market Bramley Bransholme Castleford Chesterfield Derby Frenchgate Centre, Doncaster Gainsborough Grimsby Huddersfield Whitefriargate, Hull Leeds Market Lincoln Market Lincoln Deli Mansfield Retford Rotherham Scunthorpe Wakefield Number of stores at 31 January 2013 Average number of employees in the year to 31 January Our stores are located across Yorkshire, Linconshire, Nottinghamshire and Derbyshire. The average number of employees in the year was 3% lower than the prior year whilst maintaining the same number of outlets. Results highlights Sales for the year of 18.8m (2012: 18.9m) Full year like for like sales up 3% (2012: -4%) EBITDA up 15% at 0.7m (2012: 0.6m) Profit before tax of 0.3m (2012: nil) Net debt reduced to nil (2012: 0.2m) Earnings per share have risen by a factor of 12 to 0.309p (2012: 0.026p) Awards and accreditation 6 golds for our sausages at BPEX Wakefield 5* Food Hygiene Rating Huddersfield 5* Food Hygiene Rating Gainsborough 5* Food Hygiene Rating Scunthorpe 5* Food Hygiene Rating Mansfield 5* Food Hygiene Rating Bramley 5* Food Hygiene Rating Chesterfield 5* Food Hygiene Rating Derby 5* Food Hygiene Rating Whitefriargate 5* Food Hygiene Rating Top Town 5* Food Hygiene Rating Barnsley Market 5* Food Hygiene Rating

4 02 Chairman s Statement The measures taken to improve our performance in the face of a very tough retail climate have been working and I m pleased to be able to report a continued improvement in trading. Sales and gross margin As mentioned in our interim statement issued on 2 October 2012, the measures taken to improve our performance in the face of a very tough retail climate have been working and I m pleased to be able to report a continued improvement in trading. Sales for the year were 18.8m, slightly down from the previous year ( 18.9m). The reduction in total sales is due to the planned scale back of our less profitable sales channels. Like for like sales were up 3% (2012: -4%), and gross margin further strengthened to 43.7% (2012: 43.3%). Average spend per retail customer is up 9% versus the previous year as a result of the management of price points and multi buy offers, partially offset by a 5% reduction in customer numbers driven by the VAT changes on the full cooked product offer. Costs Total overheads were 1.1% lower at 8.0m (2012: 8.1m). This reduction was driven, in the main, by wage efficiency improvements; however, on going overhead cost control and rent renegotiations have offset increases in marketing related expenditures. Profit EBITDA for the year was 0.7m (2012: 0.6m). The increase in profits can be attributed to the improvements in like for like sales and gross margin plus the reduction in overheads. Operating profit for the year was 0.3m (2012: 0.1m excluding asset impairment). Profit before tax was 0.3m (2012: nil). As mentioned in our interim statement, the Government added VAT to certain, previously exempt, cooked products from 1st October Our view was that such an increase would seriously impact sales and so we decided to invest in additional equipment, staff and training to implement the processes required to sell certain lines on the cool and therefore VAT free. Our cooked chicken and joints are therefore now sold on the cool, although certain take away lines are still kept hot and have therefore now attracted VAT at 20%. Our hot sales have indeed been adversely affected, particularly initially as our staff and customers adopted the new process, but are not down nearly as much as the recent figures from the British Poultry council suggest, showing sales in the UK of rotisserie chickens down 18% in the 23 weeks since the VAT change. We are therefore pleased we adopted this approach. Nonetheless it was a disruptive, expensive and challenging development that we could have done without, and our performance would have been better without the change. Dividend The Board is delighted to propose its maiden dividend of 0.2 pence per share. Shareholder approval will be sought at the Annual General Meeting, to be held on 24 June 2013, to pay the final dividend on 31 July 2013 to shareholders on the register on 28 June, The ex-dividend date will be 26 June Cash After working capital movements and taxation the cash generated from operating activities was slightly higher than last year at 0.42m ( m). Cash of 0.17m net, has been utilised on capital projects (premises/ vehicles/it) and cash balances at the end of January 2013 were 0.85m (2012: 0.60m). As at 31st January 2013, net debt had reduced further to nil, (2012: 0.2m). Post year end we agreed to reduce our mortgage from 840k to 540k and extend the facilities for a further 3 years. Food Safety Recent months have seen the meat industry adversely affected by the horse meat scandal. I am pleased to say that Crawshaw Butchers was not implicated. As an independent retail butcher we provide unrivalled knowledge of meat, with over 60 years experience and source only from accredited suppliers. Our food safety management systems have been in place for a number of years and we continuously review and update them to ensure our procedures are in line with the highest standards. In addition, during the year, we have undertaken a relationship with the Environmental Health department at Wakefield Council who now work with us as Primary Authority to further verify the robustness of our procedures. The Board is delighted to propose its maiden dividend of 0.2 pence per share. Shareholder approval will be sought at the Annual General Meeting, to be held on 24 June 2013, to pay the final dividend on 31 July 2013 to shareholders on the register on 28 June Richard Rose, Chairman 2012/ 2013 Sales 18.8m 2012/ 2013 Gross margin 43.7% Outlook The retail climate remains challenging; however I am encouraged by the continued improvements in trading over the first 12 weeks of the current year. Like for like sales are ahead and we are particularly pleased with the further increases in gross margin and improvements in cost we are achieving. Richard Rose Chairman 29 April 2013

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6 04 Board of Directors Richard Rose Chairman (Age: 57) Richard is Non Executive Chairman of Booker Group plc, plus Anpario plc, an AIM listed business. He also Chairs a private Company. Kevin Boyd Managing Director (Age: 44) Kevin joined Crawshaw Butchers Limited (Crawshaw Butchers) in 1990 and worked his way through various roles in the business moving from being appointed shop manager in 1993, to Operations Director by Kevin was promoted to Managing Director of Crawshaw Holdings Limited in April Following the acquisition of Crawshaw Group Limited Kevin was appointed as Managing Director of the Company. Mark Naughton-Rumbo Non-Executive Director (Age: 52) Mark qualified as a Chartered Accountant with Ernst & Whinney in 1984 and since that time has held a number of key financial and commercial directorships in public and private SME companies within the retail sector. He has achievements in strategic development and implementation, experience of managing challenged businesses, delivering business turnaround and profitable growth. He is currently Group CFO at a Retail Jewellery group and his previous roles include CEO of Whittard of Chelsea PLC, Financial and Commercial Director of Select (Retail) Limited and CEO (Business & Strategy) of A Wear Limited, an Irish womenswear brand. Lynda Sherratt Finance Director & Company Secretary (Age: 47) Lynda was previously Finance Director of Felix Group PLC prior to the acquisition of Crawshaw Group Ltd in April, 2008 and has remained Company Secretary of the Group up to the present. Lynda is an ACMA, having qualified in 1993 at Ford Motor Company. In 1996, she moved to Sportech PLC (formerly Littlewoods Pools), where she held several senior Finance positions before taking the role of Operations Director Interactive Media, a position she held until 2005, when she joined Felix Group PLC. Lynda has been Finance Director of Crawshaw Group Plc since May Colin Crawshaw Buying Director (Age: 54) Colin has spent his entire working career in the butchery business. Colin established Crawshaw Butchers in 1989 and is currently Buying Director of the Group. He has responsibility for buying and liaising with factory managers. Colin was responsible for the acquisition of ten retail outlets from David Jenkins Meats Limited in 2000 and a further six outlets between 2001 and Colin disposed of part of his interest in Crawshaw Butchers when the Company was acquired by Crawshaw Holdings Limited in April 2007.

7 05 Directors Report The Directors present their business review and audited financial statements for the year ended 31 January Principal activity The principal activity of the Group is the operation of a chain of meat focused retail food stores. The Group has two distribution centres in Grimsby and Rotherham, plus 20 retail locations across Yorkshire, Lincolnshire, Nottinghamshire and Derbyshire. Business review Despite the on going pressure on consumer spend and the introduction of VAT on hot food from 1 October, 2012/13 has been a better year with improvements in retail sales, gross margin and cost control. As a result, Crawshaw Butchers Limited (CBL), the Company s sole trading subsidiary, traded profitably such that the Group reported an operating profit of 251,818 (2012: 135,676 pre exceptionals) on turnover of 18,778,427 (2012: 18,889,491). A consolidated income statement is set out on page 11. A full review of the year, together with an indication of the outlook for the business is contained in the Chairman s statement on page 2. Post balance sheet event The outstanding loan balance shown in note 20 to the accounts relates to a mortgage against freehold property which falls due for renewal shortly after these results. The Board has agreed to repay 300,000 in June 2013 and renew the mortgage at the lower sum of 540,000, repayable over a 3 year term. Proposed dividend The Directors propose a final dividend of 0.2 pence per share (2012: nil pence). Key performance indicators, risks and strategic developments KPI Notes Gross profit 43.7% 43.3% Gross profit/revenue Current ratio Current assets: Current liabilities Turnover/average number employees 80,941 79,368 Sales per employee The principal risks and uncertainties affecting the Group include the following: Raw material availability and prices: the Group monitors raw material sources on a global basis and negotiates forward purchase contracts where appropriate with key suppliers. However, the volatility of international currency markets and their impact on spot raw material prices is an ongoing issue. Environmental risks: the Group places considerable emphasis upon environmental compliance in its business and not only seeks to ensure ongoing compliance with relevant legislation but also strives to ensure that environmental best practice is incorporated into its key processes. Major disruption/disaster: business continuity planning is reviewed regularly. Food Safety: compliance with legislation is continually assessed and monitored at every location. The effect of legislation or other regulatory activities: the Group monitors forthcoming and current legislation regularly. Key areas of strategic development and performance of the business include: Sales and marketing: new store locations are regularly reviewed for suitability for growth/replacement of our existing estate; key supplier and customer relationships are monitored on a regular basis; new products are researched, tested and trialled frequently. Competition: it is important that the business continues to deliver a value proposition to our customers. Key price points from competitors are monitored regularly. Food Safety: our food safety management systems are continually reviewed and updated to ensure our procedures are in line with the highest standards. Substantial shareholdings At 28 February 2013, the Directors had been notified of the following interests of 5% and over in the Company s issued ordinary share capital: Shareholder Number of ordinary shares % Richard Rose 7,670, Colin Crawshaw 6,265, Schroder Investment Management 5,422, Isis Equity Partners 5,256, Henderson Global Investors 5,097, Unicorn Asset Management 4,895, John Kelly 4,546, Kevin Boyd 3,316,

8 06 Directors Report continued Directors and their interests The interests of the Directors in the ordinary shares of the Company are shown below: 31 January January 2012 Number of 5p Number of 5p ordinary shares ordinary shares Richard S Rose 7,670,135 7,670,135 Colin B Crawshaw 6,265,711 6,265,711 Kevin P Boyd 3,316,311 3,316,311 Lynda Sherratt 1,270,000 20,000 Mark Naughton-Rumbo The interests of the Directors in options to acquire shares are shown below: 31 January January 2012 Number of 5p Number of 5p ordinary shares ordinary shares Richard S Rose Colin B Crawshaw Kevin P Boyd 235, ,294 Lynda Sherratt 117, ,647 Mark Naughton-Rumbo Financial instruments The Company s financial risk management objectives can be found in notes 21 and 22 to the financial statements. Creditor payment policy The Group agrees payment with its trade creditors and other suppliers on an individual contract basis at the time the goods and services are ordered rather than following a standard code. The policy is to abide by the agreed terms once satisfied that the goods or services have been provided in accordance with the contract terms and conditions. The Group s average creditor payment period at 31 January 2013 was 49 days (2012: 53 days). Employee involvement The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various financial and economic factors affecting the performance of the Group. Going concern After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Political and charitable contributions The Group made no political or charitable donations or incurred any political expenditure during the current or preceding year. Disclosure of information to auditors The Directors who held office at the date of approval of this Directors report confirm that, so far as they are each aware, there is no relevant audit information of which the Group s auditors are unaware; and each Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Group s auditors are aware of that information. Auditor In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG Audit Plc as auditor of the Company is to be proposed at the forthcoming Annual General Meeting. Nominated advisor and broker WH Ireland Limited continues as our nominated adviser and sole broker. By order of the board Lynda Sherratt Company Secretary Bradmarsh Business Park Bow Bridge Close Rotherham South Yorkshire S60 1BY 29 April 2013 Company Number:

9 Corporate Governance Statement 07 Code of best practice The Board acknowledges the importance of the UK Corporate Governance Code published in 2010 ( the Code ) and has reviewed the Company s compliance with the provisions of the Code as appended to the Listing Rules of the Financial Services Authority. This statement explains how the Company has voluntarily applied the principles of the Code, as far is as practicable. The Board of Directors The Company is controlled and led by the Board of Directors with an established schedule of matters reserved for their specific approval. The Board met regularly throughout the period and is responsible for the overall Company strategy, acquisition and divestment policy, approval of major capital expenditure and consideration of significant financial matters. It reviews the strategic direction of the Company, its annual budget, its progress towards achievement of these budgets and its capital expenditure programmes. The function of the Chairman is to supervise and manage the Board and to ensure its effective control of the business. All Board members have access, at all times, to sufficient information about the business, to enable them to fully discharge their duties. Also, procedures exist covering the circumstances under which the Directors may need to obtain independent professional advice. The Board has established the following committees to fulfil specific functions: The Audit Committee is chaired by M Naughton Rumbo and also comprises R S Rose. It meets on a regular basis, monitoring and reviewing the Group s financial reporting and internal control procedures. Due to the nature and size of the Company at present it would not be appropriate for the Company to have its own internal audit department reporting directly to the Audit Committee. The Remuneration Committee is chaired by M Naughton Rumbo and also comprises R S Rose. Meetings were convened during the year to monitor, assess and report to the full Board on all aspects and policy relating to nomination, appointment and remuneration of executive Directors. The Board, as a whole, determines the remuneration of the Non-Executive Directors. Internal control The Board is responsible for ensuring that the Company maintains adequate internal control over the business and its assets. The effectiveness of the Company s system of internal financial controls, for the year to 31 January 2013 and for the period to the date of approval of the financial statements, has been reviewed by the Directors. Although they are aware that no system can provide for absolute assurance against material misstatement or loss, they are satisfied that effective controls are in place. On the wider aspects of internal control, relating to operational and compliance controls and risk management, the Board, in setting the control environment, now identifies, reviews, and regularly reports on the key areas of business risk facing the Company. The Executive Directors maintain close day to day involvement in all of the Company s activities which enables control to be achieved and maintained. This includes the comprehensive review of both management and technical reports, interest rate fluctuations, environmental considerations, government and fiscal policy issues, employment and information technology requirements and cash control procedures. In this way, the key risk areas can be monitored effectively and specialist expertise applied in a timely and productive manner. Relations with shareholders The Company maintains effective contact with its principal shareholders and welcomes communications from its private investors.

10 08 Report of the Remuneration Committee Compliance This report by the Remuneration Committee, on behalf of the Board, contains full details of the remuneration of each Director during the period under review. Directors remuneration policy The Committee aims to ensure that the remuneration packages offered are competitive and are designed to attract, retain and motivate executives of the right calibre. Emoluments of the Directors For the year to 31 January 2013 Benefits Salaries excluding Pension and fees pension contributions Total R S Rose 20,000 6,039 26,039 K P Boyd 60,520 7,720 50, ,240 L J Sherratt 80,000 1,296 20, ,296 C B Crawshaw 94,000 94,000 M Naughton Rumbo 20,004 20,004 Emoluments of the Directors For the year to 31 January 2012 Benefits Salaries excluding Pension and fees pension contributions Total R S Rose 20,000 6,511 26,511 K P Boyd 60,520 8,042 50, ,562 L J Sherratt 80,000 1,115 20, ,115 C B Crawshaw 94,000 94,000 P E Kanas 15,003 15,003 M Naughton Rumbo 5,001 5,001 In addition to the above, a 6,000 loss of office payment was made to P E Kanas. Pensions Defined contribution pension payments are made to individual pension plans to provide benefits for certain Executive Directors. The Non-Executive Directors emoluments are not pensionable. Directors service contracts C Crawshaw, K Boyd and L Sherratt s service contracts are terminable on twelve months notice. R Rose and M Naughton Rumbo appointment as Non-Executive Directors are terminable on six months notice. Directors share options Details of the individual share options held by the Directors as at 31 January 2013, which are summarised in the Directors Report on page 6, are as follows: Director Exercise period Option price Number of shares K Boyd From 14/4/08 to 13/4/ p 235,294 L Sherratt From 14/4/08 to 13/4/ p 117,647 The market price of the Company s 5p shares at 31 January 2012 was 3.12p and at 31 January 2013 the market price of the Company s 5p shares was 3.13p. This report was approved by the Board on 29 April 2013 and signed on its behalf by M Naughton Rumbo Chairman of the Remuneration Committee

11 Statement of Directors Responsibilities in respect of the Annual Report and the Financial Statements 09 The Directors are responsible for preparing the Annual Report and the Group and parent company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare group and parent company financial statements for each financial year. As required by the AIM Rules of the London Stock Exchange they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the parent company financial statements on the same basis. 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 parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether they have been prepared in accordance with IFRSs as adopted by the EU; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors have decided to prepare voluntarily a Directors Remuneration Report in accordance with Schedule 8 to the Companies Act 2006 The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as if those requirements were to apply to the Company. The Directors have also decided to prepare voluntarily a Corporate Governance Statement as if the Company were required to comply with the Listing Rules and the Disclosure Rules and Transparency Rules of the Financial Services Authority in relation to those matters.

12 10 Independent Auditor s Report to the Members of Crawshaw Group Plc We have audited the financial statements of Crawshaw Group Plc for the year ended 31 January 2013 set out on pages 11 to 30. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act This report is made solely to the Company s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the Company s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s members, as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditor As explained more fully in the Directors Responsibilities Statement set out on page 9, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s (APB s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council s website at Opinion on financial statements In our opinion: the financial statements give a true and fair view of the state of the Group s and of the parent company s affairs as at 31 January 2013 and of the Group s profit for the year then ended; the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU; the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied in accordance with the provisions of the Companies Act 2006; the financial statements have been prepared in accordance with the requirements of the Companies Act Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the Directors Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or certain disclosures of Directors remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Jeremy Gledhill (Senior Statutory Auditor) for and on behalf of KPMG Audit Plc, Statutory Auditor Chartered Accountants 1 The Embankment Neville Street Leeds LS1 4DW 29 April 2013

13 Consolidated Statement of Comprehensive Income For the year ended 31 January Year ended Year ended 31 January 31 January Note Revenue 18,778,427 18,889,491 Cost of sales (10,576,493) (10,715,341) Gross profit 8,201,934 8,174,150 Other operating income 3 20,790 21,269 Administrative expenses-recurring (7,970,906) (8,059,743) Administrative expenses-impairment of fixed assets 2 (130,738) Operating profit 251,818 4,938 Analysed as: EBITDA 652, ,720 Impairment, depreciation and amortisation 2 (400,726) (558,782) Operating profit 251,818 4,938 Finance income 7 2,419 4,730 Finance expenses 7 (17,723) (22,139) Net finance expense (15,304) (17,409) Share of (loss)/profit of equity accounted investees (net of tax) 14,350 14,845 Profit before income tax 250,864 2,374 Income tax (expense)/credit 8 (72,388) 12,423 Total recognised income for the period 178,476 14,797 Attributable to: Equity holders of the Company 178,476 14,797 Basic profit per ordinary share 0.309p 0.026p Diluted profit per ordinary share 0.309p 0.026p The Company is taking advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual income statement.

14 12 Balance Sheets At 31 January 2013 Group Group Company Company Note ASSETS Non current assets Property, plant and equipment 10 4,280,137 4,471,820 Intangible assets goodwill and related acquisition intangibles 11 7,521,364 7,556,044 Investment in equity accounted investees 12 94,350 94,845 Investments in subsidiaries 13 11,700,000 11,700,000 Total non current assets 11,895,851 12,122,709 11,700,000 11,700,000 Current assets Inventories , ,508 Trade and other receivables , ,544 66,686 51,940 Cash and cash equivalents 850, ,095 Total current assets 1,647,835 1,420,147 66,686 51,940 Total assets 13,543,686 13,542,856 11,766,686 11,751,940 SHAREHOLDERS EQUITY Share capital 19 2,890,940 2,890,940 2,890,940 2,890,940 Share premium 19 6,317,618 6,317,618 6,317,618 6,317,618 Reverse acquisition reserve , ,563 Merger reserve , ,146 Retained earnings , ,000 (10,671) 193,379 Total shareholders equity 10,121,597 9,943,121 9,706,033 9,910,083 LIABILITIES Non current liabilities Other payables , ,685 Interest bearing loans and borrowings ,000 Deferred tax liabilities , ,984 Total non current liabilities 716,430 1,573,669 Current liabilities Trade and other payables 17 1,865,659 2,026,066 2,060,653 1,841,857 Interest bearing loans and borrowings ,000 Total current liabilities 2,705,659 2,026,066 2,060,653 1,841,857 Total liabilities 3,422,089 3,599,735 2,060,653 1,841,857 Total equity and liabilities 13,543,686 13,542,856 11,766,686 11,751,940 These financial statements were approved by the Board of Directors on 29 April 2013 and were signed on its behalf by: Lynda Sherratt Finance Director Company registered number:

15 Consolidated Statement of Changes in Shareholders Equity 13 Reverse Capital Share Share acquisition cont n Retained Total capital premium reserve reserve earnings equity Balance at 1 February ,890,940 6,317, , , ,892 9,928,324 Profit for the period 14,797 14,797 Capital reduction in subsidiary company (149,311) 149,311 Balance at 31 January ,890,940 6,317, , ,000 9,943,121 Balance at 1 February ,890,940 6,317, , ,000 9,943,121 Profit for the period 178, ,476 Balance at 31 January ,890,940 6,317, , ,476 10,121,597

16 14 Cash Flow Statements For the period ended 31 January 2013 Group Group Company Company Year ended Year ended Year ended Year ended 31 January 31 January 31 January 31 January Cash flows from operating activities Profit/(Loss) for the period 178,476 14,797 (204,050) (156,445) Adjustments for: Depreciation and amortisation 390, ,840 Loss on sale of property, plant and equipment 9,813 3,942 Net financial charges 15,304 17,409 Share of loss/(profit) of equity accounted investees (net of tax) (14,350) (14,845) Taxation 72,388 (12,423) (65,619) (50,919) Operating cashflow before movements in working capital 652, ,720 (269,669) (207,364) Movement in trade and other receivables 16,806 65,158 (46) 2,997 Movement in trade and other payables (205,033) 27,788 4,123 5,383 Movement in inventories 3,088 (148,861) Tax paid (45,000) (118,643) Net cash (used in)/generated from operating activities 422, ,162 (265,592) (198,984) Cash flows from investing activities Purchase of property, plant and equipment (186,572) (201,037) Proceeds from sale of property, plant & equipment 12,208 88,556 Received from equity accounted investees 14,845 20,207 Interest received 2,419 4,730 Interest paid (17,723) (22,139) Net cash (used in)/generated by investing activities (174,823) (109,683) Cash flows from financing activities Repayment of loans (400,000) Movements in amounts owed by group companies 265, ,984 Net cash (used in)/generated from financing activities (400,000) 265, ,984 Net change in cash and cash equivalents 247,582 (120,521) Cash and cash equivalents at start of period 603, ,616 Cash and cash equivalents at end of period 850, ,095

17 Notes to the Financial Statements (forming part of the Financial Statements) Accounting policies Crawshaw Group Plc (the Company ) is a company incorporated and domiciled in the UK. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the Group ) and equity account the Group s interest in jointly controlled entities. The parent company financial statements present information about the Company as a separate entity and not about its Group. Both the parent company financial statements and the Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ( Adopted IFRSs ). On publishing the parent company financial statements here together with the Group financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related notes that form a part of these approved financial statements. The following new and revised IFRS have been adopted in these consolidated financial statements. The application of these new and revised IFRSs has not had any material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements. Other new standards and interpretations have no significant impact on the Group. The following amendments to standards are mandatory for the first time for the financial period beginning 30 January 2012, but do not have a material impact on the Group: Amendments to IFRS 7, Financial Instruments: Disclosures on transfers of assets ; Amendment to IFRS 1, First time adoption, on fixed dates and hyperinflation ; and Amendment to IAS 12, Income taxes, on deferred tax. The Group has not yet applied the following new and revised IFRSs that are not yet effective for which early adoption is permitted: New IFRS and amendments to IAS and interpretations There are a number of standards and interpretations issued by the IASB that are effective for financial statements after this reporting period. The following have not been early adopted by the Group: International Financial Effective for accounting Reporting Standards periods starting on or after IAS 1* Amendment to financial statement presentation 1 July 2012 IAS 19* Amendment to employee benefits 1 January 2013 IFRS 10** Consolidated financial statements 1 January 2013 IFRS 11** Joint arrangements 1 January 2013 IFRS 12** Disclosures of interests in other entities 1 January 2013 IFRS 10, 11 and 12 Amendments in transition guidance 1 January 2013 IFRS 13* Fair value measurement 1 January 2013 IAS 27** Separate financial statements (revised 2011) 1 January 2013 IAS 28** Associates and joint ventures (revised 2011) 1 January 2013 IFRS 7* Amendment to financial instruments: disclosures 1 January 2013 IFRS 1 Amendment to first time adoption 1 January 2013 IAS 32* Amendment to financial instruments: presentation 1 January 2014 * Endorsed by the European Union. ** Endorsed by the European Union for periods starting on or after 1 January The application of these standards and interpretations is not anticipated to have a material effect on the Group s financial statements. Basis of consolidation Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring the venturers unanimous consent for strategic financial and operating decisions. Jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group s share of the total comprehensive income and equity movements of equity accounted investees, from the date that joint control commences until the date that joint control ceases. When the Group s share of losses exceeds its interest in an equity accounted investee, the Group s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an investee. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.

18 16 Notes to the Financial Statements continued (forming part of the Financial Statements) 1. Accounting policies continued Going concern The Group s business activities, together with the factors likely to affect its future development, performance and position are set out on the business review on pages 5-6. In addition, notes 20 and 21 set out the Group s objectives, policies and processes for managing its capital and exposures to credit and liquidity risk. As highlighted in note 22, the Group meets its day to day working capital requirements through cash generated from operations and borrowings. Current cash headroom (being cash on hand and available overdraft facility) totals 1.1m. The Group continue to have access to an overdraft facility of 0.25m based on forecast cash scenarios. This facility falls due for review in April The outstanding loan balance shown in note 20 relates to a mortgage against freehold property which falls due for renewal in June The Board has agreed to repay 300,000 in June, 2013 and renew the mortgage at the lower sum of 540,000, repayable over a 3 year term. The Group s forecasts and cash projections, taking account of reasonably possible changes in trading performance as a result of the uncertain economic conditions, show that the Group should be able to operate comfortably within its secured level of available facility. The Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts. Classification of financial instruments issued by the Group In applying policies consistent with IAS 32, financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions: (a) they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and (b) where the instrument will or may be settled in the Group s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Group s own equity instruments or is a derivative that will be settled by the Group s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments. To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Group s own shares, the amounts presented in this financial information for called up share capital and share premium account exclude amounts in relation to those shares. Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company s option, and any dividends are discretionary. Dividends thereon are recognised as distributions within equity upon approval by the Group s shareholders. Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest expense in profit or loss as accrued. Finance payments associated with financial liabilities are dealt with as part of finance expenses. Finance payments associated with financial instruments that are classified in equity are treated as distributions and are recorded directly in equity. Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents and trade and other payables. Trade and other receivables are recognised at stated cost less impairment losses. It is the Company s policy to review trade and other receivable balances for evidence of impairment at each reporting date. Any receivables which give significant cause for concern are written down to the best estimate of the recoverable amount. Cash and cash equivalents comprise cash-in-hand and cash-at-bank. Trade and other payables are recognised at stated cost. Associates and jointly controlled entities (equity accounted investees) Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Associates and jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Residual values of property, plant and equipment is assumed to be nil. Land is not depreciated. The estimated useful lives are as follows: Freehold property 2% Leasehold buildings in accordance with the lease term Leasehold improvements in accordance with the lease term Plant, equipment and vehicles 10-25% on reducing balance

19 17 1. Accounting policies continued Intangible assets and goodwill Goodwill represents amounts arising on acquisition of businesses. In respect of business acquisitions that have occurred since 11 December 2006, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. Any impairment is then recognised immediately in profit or loss and is not subsequently reversed. Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. IFRS 1 grants certain exemptions from the full requirements of Adopted IFRSs in the transition period. The Company elected not to restate business combinations in Crawshaw Butchers Limited that took place prior to 1 February In respect of acquisitions prior to 1 February 2006, goodwill is included at 1 February 2006 on the basis of its deemed cost, which represents the amount recorded under UK GAAP which was broadly comparable save that only separable intangibles were recognised and goodwill was amortised. Amortisation Amortisation is recognised in the statement of comprehensive income on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows: Brand 20 years Impairment The carrying amounts of the Group s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated. For goodwill and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Calculation of recoverable amount The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Provisions A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected, risk adjusted, future cash flows at a pre-tax risk-free rate. Trade and other receivables Trade and other receivables are recognised at their fair value and thereafter at amortised cost less impairment charges. Inventories Inventories are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost comprises purchase price and an allocation of production overheads. Net realisable value is estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Inventories are primarily goods for resale. Cash and cash equivalents Cash and cash equivalents comprise cash-in-hand and cash-at bank. Bank overdrafts that are repayable on demand and form an integral part of the Group s cash management are included as a component of cash and cash equivalents for the purpose only of the statement of cash flows. Employee benefits Defined contribution plans The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.