Last checked at 28 Sep 2011 07:00
INDIAN RESTAURANTS GROUP PLC
(AIM: IRGP)
Audited final accounts for 18-month period ended 31 March 2011
Chairman's Statement
I am pleased to report the results of Indian Restaurant Group plc ("IRGP" or the "Group") for the 18 month period ended 31 March 2011.
The Group generated revenues of £3.63 million in the 18 month period to 31 March 2011 compared with revenues of £2.47 million in the 12 month period ended 30 September 2009. These results reflect the very tough trading conditions that we had highlighted in our previous annual and interim reports. The restaurant sector is very competitive and, against a background of a slowing economy, we have had to continue with higher promotional activity in the period to retain our customers. The Group made a loss before tax of £1.62 million in the 18 month period compared with a loss before tax of £1.05 million in the previous 12 month period. Loss per share for the 18 month period amounted to 9.6 pence, compared with a loss of 8.1 pence per share in the previous 12 months. As at 31 March 2011, the Group had net assets of £0.26 million, versus £1.73 million as at 30 September 2009.
Through its three subsidiaries, the Group operated Indian restaurants. In February 2008, the Group acquired Mela, Chowki and, the now closed, Three Monkeys in Herne Hill. Subsequently it opened Mela Redhill. The expectation in 2008 was that the Group would be able to grow both organically and through acquisition. However, against a background of the challenging economic conditions that have prevailed since 2008, the Group has not been able to implement this strategy successfully. As stated in the interim results, released on 28 March 2011, we had been actively working with our major shareholders with respect to evaluating alternative options to increase the scale of operations. Despite our best efforts, we have been unable to achieve this objective and therefore indicated that, in consultation with our shareholders we would conduct a review of our operations.
The result of this review was that the Board concluded that the interests of the Shareholders would be best served by a realisation of the restaurant business thereby allowing the Group the chance to explore other investment opportunities that may offer Shareholders a better prospect in the current economic environment. The Directors also believed that, given the continuing uncertain economic climate, the interests of the restaurants would be best served not being part of a public company.
As a result, after the period end on 15 July 2011 IRGP entered into an agreement with Swadha Limited to sell the entire share capital of its three subsidiaries for £250,000 of which £150,000 was received on completion and the balance is payable in 78 equal instalments. Security has been granted by Swadha to the Company to secure these weekly payments. As part of the agreement the Company agreed to capitalise its intercompany loans to Chandan group amounting to £610,000. This transaction was completed on 1 September 2011. Following on from this disposal the Company no longer has a trade and in accordance with AIM Rule 15 IRGP is now treated as an investing company.
The investing policy of IRGP was approved at the general meeting on 26 August 2011. The investing policy is to acquire either minority interests or controlling stakes, either through the issue of securities or for cash, in quoted and non -quoted companies operating in the leisure sector. IRGP has until 26 August 2012 to implement its investing policy.
The results for the 18 month period ended 31 March 2011 incorporate the results of its three subsidiaries (Chandan Limited, Rice & Spice Limited and Mela Redhill Limited). As discussed above, these subsidiaries have been sold after the period end in September 2011.
Haresh Kanabar
Chairman
28 September 2010
Contacts: | |
Indian Restaurants Group plc | www.indianrestaurantsgroup.com |
Haresh Kanabar, Chairman | +44 (0) 116 261 2004 |
WH Ireland Limited | www.wh-ireland.co.uk |
Mike Coe / Marc Davies | +44 (0) 117 945 3470 |
Audited Consolidated Income Statement for the period ended 31 March 2011
18 months ended 31 March | Year ended 30 September | ||
Note | 2011 | 2009 | |
£'000 | £'000 | ||
Continuing operations | |||
Revenue | 3 | 3,598 | 2,470 |
Cost of sales | (810) | (657) | |
|
| ||
gross profit | 2,788 | 1,813 | |
Other operating income | 10 | - | |
Administrative expenses | 4 | (4.417) | (2,508) |
|
| ||
Operating loss | (1,619) | (695) | |
Finance income | 7 | 3 | 26 |
Finance costs | 7 | (1) | (10) |
|
| ||
Loss on ordinary activities before tax | (1,617) | (679) | |
Tax expense | 10 | - | 26 |
|
| ||
Loss for the year from continuing activities | (1,617) | (653) | |
Discontinued operations | |||
Loss for the year from discontinued operations | 17 | - | (405) |
|
| ||
Loss for the year | (1,617) | (1,058) | |
|
| ||
Basic and diluted loss per share | |||
From continuing operations | 11 | (9.6)p | (5.0)p |
From discontinuing operations | 11 | - | (3.1)p |
|
| ||
(9.6)p | (8.1)p | ||
|
| ||
Audited Consolidated Balance Sheet at 31 March 2011
As at 31 March | As at 30 September | ||
2011 | 2009 | ||
Notes | £'000 | £'000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 12 | 475 | 1,473 |
Property, plant and equipment | 13 | 292 | 357 |
|
| ||
767 | 1,830 | ||
Current assets | |||
Inventories | 15 | 20 | 20 |
Trade and other receivables | 18 | 295 | 218 |
Cash and cash equivalents | 16 | 142 | 650 |
|
| ||
457 | 888 | ||
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 19 | (755) | (553) |
Financial liabilities - borrowings | 20 | (127) | (216) |
|
| ||
(882) | (769) | ||
|
| ||
Net current (liabilities)/assets | (425) | 119 | |
|
| ||
Non-current liabilities | |||
Financial liabilities - borrowings | 20 | (85) | (190) |
Provisions for other liabilities and charges | - | (25) | |
|
| ||
(85) | (215) | ||
|
| ||
NET ASSETS | 257 | 1,734 | |
|
| ||
SHAREHOLDERS' EQUITY | |||
Issued share capital | 21 | 1,336 | 1,308 |
Share premium account | 3,563 | 3,451 | |
Share based payments reserve | 139 | 139 | |
Retained earnings | (4,781) | (3,164) | |
|
| ||
TOTAL EQUITY | 257 | 1,734 | |
|
| ||
Audited Consolidated Statement of Changes in Equity
Ordinary share capital |
Deferred share capital |
Share premium | Share based payments reserve |
Retained earnings |
Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 October 2008 | 1,308 | - | 3,451 | 133 | (2,106) | 2,786 |
Share based payments | - | - | - | 6 | - | 6 |
Total comprehensive loss for the period | - | - | - | - | (1,058) | (1,058) |
|
|
|
|
|
| |
At 1 October 2009 | 1,308 | - | 3,451 | 139 | (3,164) | 1,734 |
Share re-organisation | (1,243) | 1,243 | - | - | - | - |
Share issue | 28 | 112 | 140 | |||
Total comprehensive loss for the period | - | - | - | - | (1,617) | (1,617) |
|
|
|
|
|
| |
At 31 March 2011 | 93 | 1,243 | 3,563 | 139 | (4,781) | 257 |
|
|
|
|
|
| |
Audited Consolidated Cash Flow Statement for the Period ended 31 March 2011
Note | 18 months ended 31 March | Year ended 30 September | |
2011 | 2009 | ||
£'000 | £'000 | ||
Net cash flow from operating activities | 24 | (443) | (413) |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (13) | (127) | |
Disposal/acquisition of subsidiaries, including overdraft | - | 45 | |
Interest received | 3 | 26 | |
|
| ||
Net cash used in investing activities - continuing operations |
(10) |
(56) | |
Net cash used in investing activities - discontinued operations |
- |
- | |
|
| ||
Net cash used in investing activities | (10) | (56) | |
|
| ||
Cash flows from financing activities | |||
Proceeds of share issues | 140 | - | |
Repayment of bank loans and finance leases | (100) | (103) | |
Interest paid | (1) | (10) | |
|
| ||
Net cash from/(used in) financing activities - continuing operations |
39 |
(113) | |
Net cash used in financing activities - discontinued activities |
- |
(31) | |
|
| ||
Net cash from/(used in) financing activities | 39 | (144) | |
|
| ||
Decrease in cash and cash equivalents | (414) | (613) | |
Cash and cash equivalents at start of period | 25 | 548 | 1,161 |
|
| ||
Cash and cash equivalents at end of period | 25 | 134 | 548 |
|
| ||
Notes to the Financial Statements for the 18 Month Period ended 31 March 2011
1. Basis of preparation
Indian Restaurant Group Plc is a public limited company incorporated and domiciled in United Kingdom. The principal activity of the company is to operate a chain of Indian restaurants. The company's ordinary shares are traded on the AIM market of the London Stock Exchange plc ("AIM").
The registered office of the Company is c/o SRL Accountancy & Payroll Services Ltd, Entrance E2, Leicester Business Centre, 111 Ross Walk, Leicester, LE4 5HH.
The consolidated and the company's financial statements for the period ended 31 March 2011 have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, including International Accounting Standards ('IAS') and interpretations issued by the International Accounting Standards Board.
Statutory accounts for the 18 months ended 31 March 2011 will be delivered to shareholders and to the Registrar of Companies and will be available on the Company's website (www.indianrestaurantsgroup.com). The report of the auditors on the statutory accounts for the 18 months ended 31 March 2011 was unqualified and did not contain a reference to any matters which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act 2006.
2. Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.
Going concern
The consolidated financial statements have been prepared on a going concern basis as, after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future at the time of approving the financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made up to 31 March 2011. The excess of cost of acquisition over the fair values of the Group's share of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired is recognised directly in the income statement.
3. Segmental information
i) Primary business segment
Segment information is presented in respect of the group's business segments. The primary business segments are based on the group's reporting structure.
Segmental results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Restaurants | Head Office | Group | |
£'000 | £'000 | £'000 | |
18 month period ended 31 March 2011 | |||
Revenue | |||
Sales to external customers | 3,598 | - | 3,598 |
|
|
| |
Results | |||
Operating profit/(loss) before interest and tax | 51 | (1,670) | (1,619) |
Net finance income/(expense) | (1) | 3 | 2 |
|
|
| |
Profit/(loss) before tax | 50 | (1,667) | (1,617) |
Taxation | - | - | - |
|
|
| |
Profit/(loss) for the year from continuing activities | 50 | (1,667) | (1,617) |
Loss for the year from discontinued operations | - | ||
| |||
Loss for the year | (1,617) | ||
| |||
Assets and liabilities | |||
Segment assets | 1,132 | 92 | 1,224 |
Segment liabilities | (828) | (139) | (967) |
|
|
| |
Total net assets | (304) | (47) | 257 |
|
|
| |
Other segment information | |||
Capital expenditure | |||
Property, plant & equipment | 9 | 4 | 13 |
Depreciation | 74 | 4 | 78 |
|
|
| |
Restaurants | Head Office | Total Group | |
£'000 | £'000 | £'000 | |
Year ended 30 September 2009 | |||
Revenue | |||
Sales to external customers | 2,470 | - | 2,470 |
|
|
| |
Result | |||
Operating loss before interest and tax | (244) | (451) | (695) |
Net finance (cost) income | (6) | 22 | 16 |
|
|
| |
Loss before tax | (250) | (429) | (679) |
Taxation | 26 | - | 26 |
|
|
| |
Loss for the year from continuing operations | (224) | (429) | (653) |
Loss for the year from discontinued operations | (405) | ||
| |||
Loss for the year | (1,058) | ||
| |||
Assets and liabilities | |||
Segment assets | 2,069 | 649 | 2,718 |
Segment liabilities | (878) | (106) | (984) |
|
|
| |
Total net assets | 1,191 | 543 | 1,734 |
|
|
| |
Other segment information | |||
Capital expenditure | |||
Property, plant & equipment | 125 | 2 | 127 |
Depreciation | 53 | - | 53 |
|
|
| |
4. Administrative expenses
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Depreciation | 78 | 53 | ||
Loss on disposal of property, plant and equipment | - | 13 | ||
Impairment of goodwill | 998 | - | ||
Staff costs | 1,771 | 1,476 | ||
Operating costs | 1,074 | 638 | ||
Operating lease rentals | 496 | 328 | ||
|
| |||
4,417 | 2,508 | |||
|
|
5. Auditors' remuneration
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Audit fees: | ||||
- statutory audit of the Group accounts | 6 | 11 | ||
- statutory audit of the company's subsidiaries | 9 | 23 | ||
|
| |||
15 | 34 | |||
|
| |||
6. Other operating income
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Rent received | 10 | - | ||
|
| |||
10 | - | |||
|
|
7. Finance income and costs
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Bank interest receivable | 3 | 26 | ||
Interest payable on bank loans | (1) | (10) | ||
|
| |||
2 | 16 | |||
|
|
8. Directors' emoluments
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Emoluments for qualifying services | 495 | 351 | ||
Pension contributions | 11 | 11 | ||
Share based payments | - | 6 | ||
|
| |||
506 | 368 | |||
|
| |||
The above includes amounts paid to the highest paid director as follows:- | ||||
Emoluments for qualifying services | 165 | 110 | ||
Pension contributions | 11 | 11 | ||
Share based payments | - | 6 | ||
|
| |||
176 | 127 | |||
|
|
No directors exercised share options during the year (2009: nil)
9. Employees and staff costs
The average number of employees was as follows:
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
No. | No. | |||
Management | 4 | 4 | ||
Restaurants | 67 | 73 | ||
|
| |||
71 | 77 | |||
|
| |||
Staff costs for the above employees were as follows:
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Wages and salaries | 1,771 | 1,415 | ||
Social security costs | 63 | 44 | ||
Pension contributions | 11 | 11 | ||
Share based payments | - | 6 | ||
|
| |||
1,845 | 1,476 | |||
|
|
The pension contributions were made to the personal pension scheme of a director of the company.
10. Taxation
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Current tax charge | - | - | ||
Adjustment in respect of prior years | - | 26 | ||
|
| |||
Current tax credit | - | 26 | ||
|
| |||
Factors affecting the tax charge for the period | ||||
Loss on ordinary activities before taxation | (1,617) | (1,058) | ||
Loss on ordinary activities before taxation multiplied by standard rate of corporation tax of 28% (2009: 28%) | (453) | (296) | ||
Effects of: | ||||
Temporary timing differences | 6 | 6 | ||
Non deductible expenses | 28 | (78) | ||
Depreciation in excess of capital allowances | 10 | 2 | ||
Unutilised tax losses | 130 | 179 | ||
Impairment of goodwill | 279 | 187 | ||
|
| |||
Current tax charge | - | - | ||
|
|
The Group has approximately £4.0m (2009: £2.6m) of trading losses to carry forward and offset against future trading profits.
11. Loss per share
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
Basic | ||||
Loss from continuing activities (£'000) | (1,617) | (653) | ||
Loss from discontinuing activities (£'000) | - | (405) | ||
|
| |||
(1,617) | (1,058) | |||
Number of shares | 16,806,004 | 13,079,850 | ||
|
| |||
Basic loss per share (p) | ||||
From continuing operations | (9.6)p | (5.0)p | ||
From discontinuing operations | - | (3.1)p | ||
|
| |||
(9.6)p | (8.1)p | |||
|
| |||
There was no dilutive effect from the share options outstanding during the year.
12. Goodwill
Note | 2009 | |||
£'000 | ||||
Cost | ||||
At 1 October 2009 | 2,137 | |||
| ||||
At 31 March 2011 | 2,137 | |||
| ||||
Impairment | ||||
At 1 October 2009 | (664) | |||
Impairment charge | (998) | |||
| ||||
At 30 September 2009 | (1,662) | |||
| ||||
Net book value | ||||
At 31 March 2011 | 475 | |||
| ||||
At 30 September 2009 | 1,473 | |||
|
13. Property, plant and equipment
GROUP
Leasehold buildings | Fixtures & Fittings | Motor Vehicles | Total | ||
£'000 | £'000 | £'000 | £'000 | ||
Cost | |||||
At 1 October 2008 | 311 | 626 | 7 | 944 | |
Additions | 81 | 46 | - | 127 | |
Disposals | (33) | (320) | - | (353) | |
|
|
|
| ||
At 30 September 2009 | 359 | 352 | 7 | 718 | |
Additions | - | 13 | - | 13 | |
Disposals | - | - | - | - | |
|
|
|
| ||
At 31 March 2011 | 359 | 365 | 7 | 731 | |
|
|
|
| ||
Accumulated depreciation | |||||
At 1 October 2008 | 159 | 303 | 2 | 464 | |
Charge for the year | 20 | 32 | 1 | 53 | |
On disposal | (11) | (145) | - | (156) | |
|
|
|
| ||
At 30 September 2009 | 168 | 190 | 3 | 361 | |
Charge for the period | 29 | 48 | 1 | 78 | |
On disposal | - | - | - | - | |
|
|
|
| ||
At 31 March 2011 | 197 | 238 | 4 | 439 | |
|
|
|
| ||
Net book value | |||||
At 31 March 2011 | 162 | 127 | 3 | 292 | |
|
|
|
| ||
At 30 September 2009 | 191 | 162 | 4 | 357 | |
|
|
|
| ||
|
COMPANY
Fixtures & Fittings | |||||
£'000 | |||||
Cost | |||||
At 1 October 2008 | - | ||||
Additions | 2 | ||||
| |||||
At 30 September 2009 | 2 | ||||
Additions | 4 | ||||
| |||||
At 31 March 2011 | 6 | ||||
| |||||
Accumulated depreciation | |||||
At 1 October 2008 | - | ||||
Charge for the year | - | ||||
| |||||
At 30 September 2009 | - | ||||
Charge for the period | 4 | ||||
| |||||
At 31 March 2011 | 4 | ||||
| |||||
Net book value | |||||
At 31 March 2011 | 2 | ||||
| |||||
At 31 March 2011 | 2 | ||||
| |||||
14. Investments - available for sale
COMPANY
Subsidiary undertakings
| Total | ||
£'000 | £'000 | ||
Cost and net book value | |||
At 1 October 2009 | 880 | 880 | |
Impairment of investment | (880) | (880) | |
|
| ||
At 31 March 2011 | - | - | |
|
| ||
Details of the investments in which the Company directly or indirectly holds 20% or more of the nominal value of any class of share capital are as follows:
Name of company | Proportion held | Direct or indirect holding | Nature of business | Country of registration | |
Chandan Ltd | 100% | Direct | Restaurant | England & Wales | |
Rice & Spice Ltd | 100% | Indirect | Restaurant | England & Wales | |
Mela Redhill Ltd | 100% | Indirect | Restaurant | England & Wales |
The registered office of each company is:
Name of company | Registered office | |
Chandan Ltd | 152-156 Shaftesbury Avenue, London, WC2H 8HL | |
Rice & Spice Ltd | 2 Denman Street, London, W1V 7RH | |
Mela Redhill Ltd | 152-156 Shaftesbury Avenue, London, WC2H 8HL |
15. Inventories
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Inventories | 20 | 20 | - | - | ||
|
|
|
| |||
20 | 20 | - | - | |||
|
|
|
| |||
16. Cash and cash equivalents
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Cash at bank and in hand | 142 | 41 | 88 | 36 | ||
Short-term bank deposit | - | 609 | - | 609 | ||
|
|
|
| |||
142 | 650 | 88 | 645 | |||
|
|
|
| |||
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Cash and cash equivalents | 142 | 650 | 88 | 645 | ||
Bank overdraft | (8) | (102) | - | - | ||
|
|
|
| |||
134 | 548 | 88 | 645 | |||
|
|
|
| |||
17. Discontinued operations
Discontinued operations relates to Param Consultancy Limited which went into administration on 30 June 2009.
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Revenue | - | 299 | ||
Expenses | - | (454) | ||
|
| |||
Loss before taxation | - | (155) | ||
Income tax expense | - | - | ||
|
| |||
Loss from discontinued operations for the year | - | (155) | ||
Impairment of goodwill | - | (665) | ||
Gain on disposal of investment | - | 415 | ||
|
| |||
Loss from discontinued operations | - | (405) | ||
|
|
Cash flows from discontinued operations included in the consolidated cash flow statements are as follows:
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Net cash flow from operating activities | - | 58 | ||
Net cash flow from financing activities | - | (31) | ||
|
| |||
Total cash flows | - | 27 | ||
|
| |||
The net assets of Param Consultancy Limited at the date the company went into administration on 30 June 2009 were as follows:
18 months ended 31 March 2011 | Year ended 30 September 2009 | |||
£'000 | £'000 | |||
Property, plant and equipment | - | 168 | ||
Inventories | - | - | ||
Trade and other receivables | - | 29 | ||
Bank and cash | - | (45) | ||
Trade and other payables | - | (697) | ||
|
| |||
- | (545) | |||
| ||||
Consideration | - | - | ||
| ||||
Gain on disposal | - | (545) | ||
|
18. Trade and other receivables
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Trade receivables | 9 | 5 | - | - | ||
Amounts due from subsidiary undertakings | - | - | 303 | 588 | ||
Other receivables | 84 | 113 | 2 | 3 | ||
Prepayments and accrued income | 202 | 100 | - | 4 | ||
|
|
|
| |||
295 | 218 | 305 | 595 | |||
|
|
|
| |||
Included in other receivables are amounts of £84,000 (2009: £84,000) due after more than one year.
19. Trade and other payables
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Trade payables | 378 | 253 | 2 | 4 | ||
Amounts due to group undertakings | - | - | - | - | ||
Taxation and social security | 133 | 149 | 14 | 27 | ||
Other payables | 67 | 35 | 33 | - | ||
Accruals and deferred income | 177 | 116 | 90 | 75 | ||
|
|
|
| |||
755 | 553 | 139 | 106 | |||
|
|
|
| |||
20. Financial liabilities - borrowings
Group | Company | |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Current: | ||||||
Bank overdrafts | 8 | 102 | - | - | ||
Bank loans | - | 104 | - | - | ||
Obligations under finance leases | 11 | 10 | - | - | ||
|
|
|
| |||
19 | 216 | - | - | |||
|
|
|
| |||
Non current: | - | - | ||||
Bank loans | 193 | 166 | - | - | ||
Obligations under finance leases | - | 24 | - | - | ||
|
|
|
| |||
193 | 190 | - | - | |||
|
|
|
| |||
The maturity date of the Group's financial liabilities is provided in note 23.
The bank loans are secured against the assets of the subsidiary undertaking to which they relate. Interest on the loans is charged at base rate plus a margin of between 1.75 per cent and 2.5 per cent per annum.
21. Share capital
Group and Company | |||
2011 | 2009 | ||
£'000 | £'000 | ||
Authorised | |||
200,000,000 ordinary shares of 10p each | - | 20,000 | |
200,000,000 ordinary shares of 0.5p each | 1,000 | - | |
200,000,000 ordinary shares of 9.5p each | 19,000 | - | |
|
| ||
20,000 | 20,000 | ||
|
| ||
Issued and fully paid | |||
13,079,850 ordinary shares of 10p each | - | 1,308 | |
18,658,844 ordinary shares of 0.5p each | 93 | - | |
13,079,850 deferred shares of 9.5p each | 1,243 | - | |
|
| ||
1,336 | 1,308 | ||
|
| ||
All ordinary shares rank equally in respect of shareholders' rights.
At a General Meeting held on 3 February 2010 the shareholders approved a sub-division of the shares, whereby each issued share of 10p was subdivided into one ordinary share of 0.5p and one deferred share of 9.5p. The restricted rights attaching to the deferred shares are such that the deferred shares have no economic value.
On 28 April 2010, 5,578,994 ordinary shares were issued for cash at 2.5p each.
22. Share options
The following share options have been granted by the Company:
Date of grant | Number of ordinary shares under option | Exercise price | Exercise period |
08/02/2007 28/01/2009 28/01/2009 | 847,916 353,020 130,799 | 45p 45p 26p | 5 years 5 years 5 years |
No options were exercised or lapsed during the period.
The fair value of equity settled share options granted is estimated at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model:
Dividend yield 0%
Weighted average exercise price 43p
Weighted average share price 11.6p
Expected share price volatility 35%
Risk free interest rate 4.34%
Expected life of options 5 years
The expense recognised by the Group for share based payments during the period ended 31 March 2011 was nil (2009: £6,430).
23. Financial Instruments
Financial risk management
The Group's activities expose the Group to a number of risks including interest rate risk, credit risk and liquidity risk. The Board manages these risks through a risk management programme. The fair value of the group's assets and liabilities at 31 March 2011 are not materially different from their book value.
Interest rate risk
The table below shows the Group's financial assets and liabilities split by those bearing floating rates and those that are non interest bearing.
23. Financial instruments (continued)
Financial assets | Floating rate | Non interest bearing | Total | |
£'000 | £'000 | £'000 | ||
2011 | ||||
Cash and cash equivalents | 142 | - | 142 | |
Trade receivables | - | 9 | 9 | |
Other receivables | - | 84 | 84 | |
Prepayments and accrued income | - | 202 | 202 | |
|
|
| ||
142 | 295 | 437 | ||
|
|
| ||
2009 | ||||
Cash and cash equivalents | 650 | - | 650 | |
Trade receivables | - | 5 | 5 | |
Other receivables | - | 113 | 113 | |
Prepayments and accrued income | - | 100 | 100 | |
|
|
| ||
650 | 218 | 868 | ||
|
|
|
Financial liabilities | Fixed rate | Floating rate | Non interest bearing | Total | |||
£'000 | £'000 | £'000 | £'000 | ||||
2011 | |||||||
Bank overdraft | - | 8 | - | 8 | |||
Bank loans | - | 193 | - | 193 | |||
Obligations under finance leases | 11 | - | - | 11 | |||
Trade payables | - | - | 378 | 378 | |||
Taxation and social security | - | - | 133 | 133 | |||
Other payables | - | - | 67 | 67 | |||
Accruals and deferred income | - | - | 177 | 177 | |||
|
|
|
| ||||
11 | 201 | 755 | 967 | ||||
|
|
|
| ||||
2009 | |||||||
Bank overdraft | - | 102 | - | 102 | |||
Bank loans | - | 270 | - | 270 | |||
Obligations under finance leases | 34 | - | - | 34 | |||
Trade payables | - | - | 253 | 253 | |||
Taxation and social security | - | - | 149 | 149 | |||
Other payables | - | - | 35 | 35 | |||
Accruals and deferred income | - | - | 116 | 116 | |||
|
|
|
| ||||
34 | 372 | 553 | 959 | ||||
|
|
|
| ||||
23. Financial instruments (continued)
Credit risk
The Group monitors credit risk on an on-going basis and manages risk by concentrating on trading and placing bank deposits with reliable counterparties. The Group has no significant concentration of credit risk associated with trading counterparties. Credit risk predominantly arises from cash and cash equivalents.
Liquidity risk
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. All cash and cash equivalents are immediately accessible. All of the Group's financial assets are recoverable within the next six months.
The maturity dates of the Group's financial liabilities are shown below and are based on the period outstanding at the balance sheet date up to the contractual maturity date.
Less than 6 months | Between 6 months and 1 year | Between 1 and 5 years |
Total | |
2011 | £'000 | £'000 | £'000 | £'000 |
Bank overdraft | 8 | - | - | 8 |
Bank loans | 69 | 39 | 85 | 193 |
Finance leases | 5 | 5 | 1 | 11 |
Trade payables | 378 | - | - | 378 |
Taxation and social security | 133 | - | - | 133 |
Other payables | 67 | - | - | 67 |
Accruals and deferred income | 177 | - | - | 177 |
|
|
|
| |
837 | 44 | 86 | 967 | |
|
|
|
|
Less than 6 months | Between 6 months and 1 year | Between 1 and 5 years |
Total | |
2009 | £'000 | £'000 | £'000 | £'000 |
Bank overdraft | 102 | - | - | 102 |
Bank loans | 52 | 52 | 166 | 270 |
Finance leases | 5 | 5 | 24 | 34 |
Trade payables | 253 | - | - | 253 |
Taxation and social security | 149 | - | - | 149 |
Other payables | 35 | - | - | 35 |
Accruals and deferred income | 116 | - | - | 116 |
|
|
|
| |
712 | 57 | 190 | 959 | |
|
|
|
|
24. Cash flows from operating activities
GROUP
Period ended 31 March | Year ended 30 September | |
2011 | 2009 | |
£'000 | £'000 | |
Loss on ordinary activities before tax - continuing operations | (1,617) | (679) |
Finance income | (3) | (26) |
Finance costs | 1 | 10 |
Depreciation of property, plant and equipment | 78 | 53 |
Loss on disposal of property, plant and equipment | - | 13 |
Impairment of goodwill | 998 | - |
Reverse provision for liabilities and charges | (25) | - |
Share based payments | - | 6 |
|
| |
Operating cash flows before movements in working capital | (568) | (623) |
Decrease in inventories | - | 6 |
Decrease in trade and other receivables | (77) | 41 |
Increase/(decrease) in trade and other payables | 202 | 105 |
|
| |
Cash flows from operating activities - continuing operations | (443) | (471) |
Cash flows from operating activities - discontinued operations |
- |
58 |
|
| |
Cash flows from operating activities | (443) | (413) |
|
| |
COMPANY
Period ended 31 March | Year ended 30 September | |
2011 | 2 009 | |
£'000 | £'000 | |
Loss on ordinary activities before tax | (1,900) | (468) |
Share based payments | - | 6 |
Finance income | (3) | (23) |
Depreciation of property, plant and equipment | 4 | - |
Impairment of investment in subsidiary undertakings | 880 | - |
Impairment of loans to subsidiary undertakings | 351 | - |
|
| |
Operating cash flows before movements in working capital | (668) | (485) |
Decrease in trade and other receivables | 5 | 1 |
Increase/(decrease) in trade and other payables | 33 | (166) |
|
| |
Cash flows from operating activities | (630) | (650) |
|
| |
25. Cash and cash equivalents
Group | Company | |||||
|
| |||||
2011 | 2009 | 2011 | 2009 | |||
£'000 | £'000 | £'000 | £'000 | |||
Cash at bank and in hand | 142 | 650 | 88 | 645 | ||
Bank overdraft | (8) | (102) | - | |||
|
|
|
| |||
134 | 548 | 88 | 645 | |||
|
|
|
| |||
26. Related party transactions
During the period, the Group purchased supplies from Ghandi Imbibe Limited totalling £27,301 (2009: £92,414). The amount owed to Ghandi Imbibe Limited at 31 March 2011 was £nil (2009: £17,294). Dinesh Mody, a director of Chandan Limited and Rice & Spice Limited, has a controlling interest in this company.
During the period, the Group purchased supplies from Ghandi Oriental Foods Limited totalling £150,095 (2009: £104,762). The amount owed to Ghandi Oriental Foods Limited at 31 March 2011 was £24,476 (2009: £18,698). Dinesh Mody, a director of Chandan Limited and Rice & Spice Limited, has a controlling interest in this company.
During the period, the Group received marketing services from SHP Marketing Solutions Limited amounting to £7,545 (2009: £30,615). No amounts were outstanding at the period end. The wife of one of the directors is a director of SHP Marketing Solutions Limited.
27. Operating lease commitments
The Group has the following annual commitments under operating leases:
Group | |||
| |||
2011 | 2009 | ||
£'000 | £'000 | ||
Land and Buildings: | |||
Expiring in: | |||
one to five years | - | - | |
over five years | 331 | 275 | |
|
| ||
28. Post balance sheet events
On 15 July 2011 the Group entered into an agreement for the sale of its entire interest in Chandan Limited and its subsidiaries, including all the inter company indebtedness, to Swadha Limited for a total consideration of £250,000 payable as to £150,000 in cash and £100,000 in 78 equal weekly instalments. The sale was completed on 1 September 2011. Kuldeep Singh who was a director of the Company until 14 April 2011 is a director of Swadha Limited.