PizzaExpress Financing I plc Annual Report and...

Company Number 09116370

PizzaExpress Financing I plc

Annual Report andConsolidated Financial Statements

For the period from 4 July 2014 to 28 June 2015

PizzaExpress Financing 1 plcContents

Strategic Report 2Directors’ Report 4Independent Auditors’ Report to the Members of PizzaExpress Financing 1 plc 7Consolidated Statement of Comprehensive Income 9Consolidated Statement of Financial Position 10Consolidated Statement of Changes in Equity 11Consolidated Cash Flow Statement 12Notes to the Consolidated Financial Statements 13Company Statement of Financial Position 39Company Statement of Changes in Equity 40Notes to the Company Financial Statements 41

4

PizzaExpress Financing 1 plcStrategic ReportFor the period from 4 July 20141028 June 2015

The Directors present their Strategic Report for PizzaExpress Financing 1 plc (“the Company”) and its subsidiaries(together the Group) for the period from 4 July 2014 to 28 June 2015 (the “period’).

Business activitiesThe principal activity of the Group is the operation of pizza restaurants in the UK and Ireland, and through itsinternational operations which comprise both franchises and wholly owned businesses.

At 28 June 2015, the Group operated 449 sites in the UK and Ireland as well as 79 international sites principally inChina, Hong Kong and the Middle East.

It also has licensing arrangements in place to enable PizzaExpress pizzas, salad dressings and other products tobe sold through supermarkets.

AcquisitionsOn 18 August 2014 PizzaExpress Group Limited (a wholly owned subsidiary of PizzaExpress Financing 1 plc)acquired PizzaExpress Operations Limited (formerly Gondola Investments Limited), PizzaExpress (Franchises)Limited and PizzaExpress Greater China Limited for a total consideration of £894,476,000.

On 7 May 2015, PizzaExpress UAE Holdings Limited (a wholly owned subsidiary of PizzaExpress Financing 1 plc)completed the acquisition of 49% of the issued share capital of Jordana Restaurants LLC, equating to a beneficialinterest of 100%, for a purchase price of £4,357,000.

On 10 June 2015, PizzaExpress International Holdings Limited (a wholly owned subsidiary of PizzaExpressFinancing 1 plc) acquired all of the issued share capital of PizzaExpress (Hong Kong) Limited, a companyincorporated in Hong Kong, and its subsidiaries, for a purchase price of £64,262,000.

Trading resultsThe results of the Group for the period are set out on page 9 and show a loss before taxation of £10,540,000.Operating profit for the period was £59,011,000.

During the period the Group incurred exceptional costs of10,578,000. These mainly relate to costs incurred inthe acquisition of the PizzaExpress business and the UAE and China franchises.

Review of the businessThe performance of the Group during 2015 produced encouraging results. The Group implemented varioussuccessful initiatives in line with its strategy to improve like for like performance; and its current year trading hasalso been assisted by the improving macro-economic environment in the market. Like for like performance ismeasured with reference to the historical performance of the acquired PizzaExpress group.

During the period the Group opened 17 new restaurants in the UK and Ireland and closed five. The casual diningmarket is highly competitive and the Group will seek new opportunities to open new restaurants whilst continuingto operate effectively and efficiently.

The Group prices competitively and obtains market research to ensure its restaurants provide for consumerrequirements. Staff retention is maintained through staff training and development within the Group. The Grouphas built and maintains strong relationships with suppliers to ensure quality and timely supplies.

The Group also continued its international expansion with the purchase of the franchised restaurants in the UAE,Hong Kong and China.

During the period, the Group opened 10 new restaurants internationally, these being a combination of franchisedand owned sites.

As at the end of the period, the Group had net liabilities of13,394,000.

2

PizzaExpress Financing 1 plcStrategic Report (continued)For the period from 4 July 20141028 June 2015

Key performance indicatorsThe key performance indicators used by management are like for like sales growth, number of restaurants andperformance against budget.

Like for like sales growth and number of restaurants are discussed above. The Directors are satisfied with theperformance against budget during the period.

Principal risks and uncertaintiesThe Board of Directors (The Board”) has the primary responsibility for identifying the principal risks which thebusiness faces and for developing appropriate policies to manage those risks.

Given the nature of the Group’s businesses, the principal business risks relate to:

• competition and current economic climate;• employee retention;• timely supplies of quality product; and• foreign exchange risk.

The above risks are partly mitigated by the following key measures:

• a continued focus on delivering a great experience to our customers at excellent value for money;• competitive reward structures and comprehensive training and development programmes;• close monitoring against key supplier service level agreements, with contingent arrangements in

place where necessary; and• matching cash generated in foreign currencies with payments in the same currency.

Future developments

The Group will continue with its strategy to grow in the UK and Ireland through a combination of opening new sitesand increasing like for like sales.

The Group will also continue to focus on international expansion through opening new sites both with franchisepartners and through wholly owned subsidiaries.

This strategic report was approved by the Board on 26 October 2015,

On behalf of the Board

ADirector

3

PizzaExpress Financing 1 plcDirectors ReportFor the period from 4 July 2014 to 28 June 2015

______

The Directors present their Report and audited Consolidated Financial Statements for the Group for the periodended 28 June 2015.

During the period the Company changed its name from Twinkle Pizza Holdings plc to PizzaExpress Financing 1plc.

DirectorsThe Directors of the Company during the period to the date of approving this report were:

R Hodgson (Appointed: 16/09/2014)A Pellington (Appointed: 16/09/2014)Jinlong Wang (Appointed: 30/04/2015)Xiaolong Wang (Appointed: 16/09/2014)Sing Yuan (Appointed: 04/07/2014)

DividendsThe Directors do not recommend the payment of a dividend.

Political donationsThe Group did not make any political donations during the period.

Financial risk management

See note 19 for details of the Group’s financial risk management.

Research and development

The Group did not incur any research and development expenditure during the period.

Employment policy and employment of disabled personsServing over 28.5 million meals to customers a year, our people truly are our greatest asset and we believe intreating them as such: with respect, looking after their welfare and allowing them the freedom to be themselvesand to flourish.

We encourage a work environment that is fair, open and communicative, with many benefits for our employees.Our employees have a performance review at least once a year, which includes consideration of skills developmentand career prospects. We aim to retain, develop and promote our best staff, offering a variety of training coursesand development opportunities.

Informal, frank and open dialogue is encouraged at all levels of the Group. We aim to keep our employees informedof any changes and progress with the business on a regular basis in an engaging way.

Communication flows both ways, as we take the views of our employees seriously. Our aim has been to make itas easy as possible for our employees to air their opinions, express their ideas and voice any problems they mayhave. Examples include a cascade process of meetings to communicate key messages throughout theorganisation, a weekly feedback process for operational issues and a bright ideas scheme.

We have a diverse workforce and an equal opportunities policy in place. We aim to employ people who reflect thediverse nature of society and value people and their contribution irrespective of age, sex, disability, sexualorientation, race, colour, religion, marital status or ethnic origin.

We do not tolerate harassment or bullying in any shape or form. Procedures are in place to respond to accusationsof workplace discrimination, harassment and victimisation. An effective employee grievance procedure is inoperation, and the policy is properly communicated to our people.

Applications from disabled persons are given full consideration providing the disability does not seriously affect theperformance of their duties. Such persons, once employed, are given appropriate training and equal opportunities,as is the case where an employee becomes disabled when employed by the Group.

Future developmentsDetails of the Group’s future developments are included within the strategic report on pages 2 and 3.

4

PizzaExpress Financing 1 plcDirectors’ Report (continued)For the period from 4 July 2014 to 28 June 2015

Going concernThe Directors have reviewed the cash flow forecasts of the Group for 12 months from the date of approval of theseconsolidated financial statements and consider that there is sufficient cash for the Group to meet its liabilites asthey fall due for the foreseeable future. The Directors note that whilst the Group is in a net liabilities position at theend of the period, the first repayments of the Group’s borrowings of £981,051,000 are not due until August 2021.In making their assessment of going concern, the Directors have also considered the availabilty of additionalfinancing and note that there is an undrawn Revolving Credit Facility of £20,000,000 available to the Group. Onthe basis of these combined factors, the Directors believe it is appropriate to prepare the consolidated financialstatements on a going concern basis.

Directors’ indemnityQualifying third party indemnity provisions as defined by the Companies Act 2006 were in force for the benefit ofdirectors throughout the period and up to the date of approval of the financial statements.

Statement of Directors’ responsibilitiesThe Directors are responsible for preparing the Annual Report and the financial statements in accordance withapplicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law theDirectors have prepared the Group financial statements in accordance with International Financial ReportingStandards (IFRSs) as adopted by the European Union and the Parent Company financial statements in accordancewith applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted AccountingPractice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law theDirectors must not approve the financial statements unless they are satisfied that they give a true and fair view ofthe state of affairs of the Group and the Company and of the profit or loss of the Company and Group for thatperiod. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;• make judgements and accounting estimates that are reasonable and prudent;• state whether applicable IFRSs as adopted by the European Union and IFRSs issued by IASB have been

followed, subject to any material departures disclosed and explained in the financial statements:• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Company and the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain theCompany’s transactions and disclose with reasonable accuracy at any time the financial position of the Companyand the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. Theyare also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonablesteps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Group’s website. Legislation in the UnitedKingdom governing the preparation and dissemination of financial statements may differ from legislation in otherjurisdictions.

Post balance sheet eventsThere are no post balance sheet events to disclose.

Disclosure of information to auditorsSo far as the Directors are aware, there is no relevant audit information of which the Company’s auditors areunaware. The Directors have taken all the relevant steps that they ought to have taken as Directors in order tomake themselves aware of any relevant audit information and to establish that the Company’s auditors are awareof that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of theCompanies Act 2006.

5

PizzaExpress Financing 1 plcDirectors Report (continued)For the period from 4 July 2014 to 28 June 2015

Independent auditorsThe independent auditors, PricewaterhouseCoopers LLP, who were appointed in the period, have indicated theirwillingness to continue in office and resolution that they will be re-appointed will be proposed at the annual generalmeeting.

This Directors’ report was approved by the Board on 26 October 2015.

On behalf of the Board

A Pelli(gt nDirector

6

PizzaExpress Financing 1 plcIndependent Auditors’ Report to the members of PizzaExpress Financing 1 plcFor the period from 4 July 2014 to 28 June 2015

Report on the financial statements

Our opinion

In our opinion:

PizzaExpress Financing 1 plc’s Group financial statements and Company financial statements (the“financial statements”) give a true and fair view of the state of the Group’s and of the Company’s affairsas at 28 June 2015 and of the Group’s loss and cash flows for the 51 week period (the “period”) thenended;

• the Group financial statements have been properly prepared in accordance with International FinancialReporting Standards (IFRSs”) as adopted by the European Union;

• the Company financial statements have been properly prepared in accordance with United KingdomGenerally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act2006.

What we have audited

PizzaExpress Financing I plc’s financial statements comprise:

• the consolidated statement of financial position as at 28 June 2015;• the consolidated statement of comprehensive income for the period then ended;• the consolidated cash flow statement for the period then ended;• the consolidated statement of changes in equity for the period then ended;• the notes to the consolidated financial statements, which include a summary of significant accounting

policies and other explanatory information.• the Company statement of financial position as at28 June 2015;• the Company statement of changes in equity for the period then ended; and• the notes to the Company financial statements, which include a summary of significant accounting policies

and other explanatory information.

The financial reporting framework that has been applied in the preparation of the Group financial statements isapplicable law and IFRSs as adopted by the European Union. The financial reporting framework that has beenapplied in the preparation of the Company financial statements is applicable law and United Kingdom AccountingStandards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 “Reduced DisclosureFramework”.

In applying the financial reporting framework, the Directors have made a number of subjective judgements, forexample in respect of significant accounting estimates. In making such estimates, they have made assumptionsand considered future events.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, the information given in the Strategic Report and the Directors’ Report for the financial period forwhich the financial statements are prepared is consistent with the financial statements.

Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:• we have not received all the information and explanations we require for our audit; or• adequate accounting records have not been kept by the Company, or returns adequate for our audit have

not been received from branches not visited by us; or• the Company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors’ remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of Directors’remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.

7

PizzaExpress Financing 1 plcIndependent Auditors Report to the members of PizzaExpress Financing 1 plc (continued)For the period from 4 July 2014 to 28 June 2015

Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Statement of Directors’ responsibilities set out on page 5, the Directors areresponsible 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 lawand International Standards on Auditing (UK and Ireland) (ISAs (UK & Ireland)”). Those standards require us tocomply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the Company’s members as a body inaccordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in givingthese opinions, accept or assume responsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about theamounts and disclosures in the financial statements sufficient to give reasonable assurance that the financialstatements are free from material misstatement, whether caused by fraud or error. This includes an assessmentof:

• whether the accounting policies are appropriate to the Group’s and the Company’s circumstances andhave been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the directors; and• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the directors’ judgements against available evidence,forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we considernecessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing theeffectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report and consolidated financialstatements to identify material inconsistencies with the audited financial statements and to identify any informationthat is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us inthe course of performing the audit. If we become aware of any apparent material misstatements or inconsistencieswe consider the implications for our report.

Sarah uinn (Senior Statutory Auditor)for and on behalf of PncewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsUxbridge26 October2015

8

PizzaExpress Financing I plcConsolidated Statement of Comprehensive IncomeFor the period from 4 July 2014 to 28 June 2015

Period from4 July 2014to 28 June

2015Note £000

Turnover 3 370,999

Cost of sales (256,149)

Gross profit 114,850

Administrative expenses (55,839)

Operating profit excluding exceptional items 69,589

Exceptional items 5 (10,578)

Operating profit 4 59,011

Finance income 6 86Finance costs 6 (69,637)

Loss before taxation (10,540)

Income tax expense 9 (6,027)

Loss after taxation (16,567)

Other comprehensive expense

Items that may be subsequently reclassified to profit or loss:Currency translation differences (1,467)

Total comprehensive expense for the period (18,034)

All results arise from the Group’s continuing operations.

The notes on pages 13 to 38 form part of these Consolidated Financial Statements.

9

PizzaExpress Financing 1 plcConsolidated Statement of Financial PositionAs at 28 June 2015

Note 2015£000

AssetsNon-current assetsIntangible assets 10 894,042Property, plant and equipment 11 209,428

1,103,470

Current assetsInventories 12 8,341Trade and other receivables 13 29,799Corporation tax 529Cash and cash equivalents 14 49,273

87,942

Total assets 1,191,412

LiabilitiesNon-current liabilitiesBorrowings 15 (981051)Trade and other payables 16 (1,037)Provisions 17 (2,003)Deferred tax liability 18 (115,404)

(1,099,495)

Current liabilitiesTrade and other payables 16 (105,311)

(105,311)

Total liabilities (1,204,806)

Net liabilities (13,394)

EquityShare capital 22 50Share premium 22 4,450Retained loss (17,894)Total equity (13,394)


The financial statements on pages 9 to 38 were authorised for issue by the Board of Directors on 26 October 2015and were signed on its behalf.

M1L’A PelntonJDirector

10

PizzaExpress Financing 1 plcConsolidated Statement of Changes in EquityFor the period from 4 July 2014 to 28 June 2015

Share Share Retained Total

Comprehensive incomeLoss for the periodCurrency translation differences

capital premium£000 £000

loss equity£000 £000

(16,567) (16,567)(1,467) (1,467)

Other movementsShare based payments

Transactions with owners

140 140

Proceeds from the issue of shares

At28 June 2015

50 4,450 - 4,500

50 4,450 (17,894) (13,394)


11

PizzaExpress Financing 1 plcConsolidated Cash Flow StatementFor the period from 4 July 2014 to 28 June 2015

Notes 2015£000

Cash flows from operating activitiesLoss for the year (16,567)Adjustments for:Finance income (86)Finance expense 69,637Taxation charge 6,027Depreciation charge 16,455Loss on the sale of assets 321Share based payment 140Increase in inventories (407)Increase in trade and other receivables (3,329)Increase in trade and other payables 7,608Decrease in onerous lease provision (153)Cash generated from operations 79,646

Interest paid (22,477)Taxation paid (4,344)

Net cash inflow from operating activities 52,825

Cash flows from investing activitiesPurchase of property, plant and equipment (27,593)Purchase of intangible assets (397)Interest received 86Purchase of subsidiary undertakings, net of cash acquired (629,288)Repayment of loan borrowings acquired through business combinations (304,054)Net cash outflow from investing activities (961,246)

Cash flows from financing activitiesProceeds from the issue of share capital 4,500Facility arrangement fee (625)Debt issue costs (22,626)Loan from parent company issued 307,617Loan notes issued 669,143Net cash inflow from financing activities 958,009

Net increase in cash and cash equivalents 49,588

Cash and cash equivalents at beginning of the period -

Exchange loss on cash and cash equivalents (315)

Cash and cash equivalents at end of the period 14 49,273


12

PizzaExpress Financing 1 plcNotes to the Consolidated Financial StatementsFor the period from 4 July 2014 to 28 June 2015

1. General information

PizzaExpress Financing I plc is a limited company domiciled and incorporated in the United Kingdom. TheCompany’s registered office is Hunton House, Highbridge Estate, Oxford Road, Uxbridge, Middlesex, UnitedKingdom, U68 1LX.

The Group operates international chain of pizza restaurants, as well as receiving royalty income from sales of retailproducts and income from the sale of dough products.

2. Summary of significant accounting policies

Basis of preparationThe consolidated financial statements have been prepared in accordance with International Financial ReportingStandards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Unionand the Companies Act 2006 applicable to companies reporting under IFRS.

The consolidated financial statements have been prepared on the historical cost basis, except forthe fair valuationof assets and liabilities of the subsidiary companies acquired during the period. Separate financial statements areprepared for the Company as a single entity as required by law. These have been prepared under FinancialReporting Standard 101 and are included on pages 40 to 47.

The Directors have reviewed the cash flow forecasts of the Group for 12 months from the date of approval theseconsolidated financial statements and consider that there is sufficient cash for the Group to meet its liabilites asthey fall due for the foreseeable future. The Directors note that whilst the Group is in a net liabilities position at theend of the period, the first repayments of the Group’s borrowings of £981.1 million are not due until August 2021.In making their assessment of going concern, the Directors have also considered the availabilty of additionalfinancing and note that there is a undrawn Revolving Credit Facility of £20 million available to the Group. On thisbasis of these combined factors, the Directors believe it is appropriate to prepare the consolidated financialstatements on a going concern basis.

The principal accounting policies are outlined below.

Disclosure for new accounting standardsThe following new amendments to standards and interpretations, which do not have a material impact for the Group,are mandatory for the first financial period for the Group, beginning 4 July 2014, and are relevant to the preparationof the Group accounts:

• IFRS 10, Consolidated financial statements’ builds on existing principles by identifying the concept of controlas the determining factor in whether an entity should be included within the consolidated financial statementsof the parent company. The standard provides additional guidance to assist in the determination of controlwhere this is difficult to assess.

• Amendment to lAS 32, Financial instruments: Presentation’ on offsetting financial assets and financialliabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It mustalso be legally enforceable for all counterparties in the normal course of business, as well as in the event ofdefault, insolvency or bankruptcy. The amendment also considers settlement mechanisms.

• Amendments to lAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financialassets. This amendment removed certain disclosures of the recoverable amount of CGUs which had beenincluded in lAS 36 by the issue of IFRS 13.

Other standards, amendments and interpretations which are effective for the financial year beginning on 4 July 2014are not applicable to the Group.

13


New standards, amendments and interpretations not yet adoptedA number of new standards and amendments to standards and interpretations are effective for annual periodsbeginning after 29 June 2015, and have not been applied in preparing these consolidated financial statement. Noneof these are expected to have a significant effect on the consolidated financial statements of the Group:

IFRS 9, Financial instruments, addresses the classification, measurement and recognition of financialassets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces theguidance in lAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retainsbut simplifies the mixed measurement model and establishes three primary measurement categories forfinancial assets: amortised cost, fair value through CCI and fair value through P&L. The basis of classificationdepends on the entity’s business model and the contractual cash flow characteristics of the financial asset.Investments in equity instruments are required to be measured at fair value through profit or loss with theirrevocable option at inception to present changes in fair value in CCI not recycling. There is now a newexpected credit losses model that replaces the incurred loss impairment model used in lAS 39. For financialliabilities there were no changes to classification and measurement except for the recognition of changes inown credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss.IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectivenesstests. It requires an economic relationship between the hedged item and hedging instrument and for thehedged ratio’ to be the same as the one management actually use for risk management purposes.Contemporaneous documentation is still required but is different to that currently prepared under lAS 39.The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption ispermitted subject to EU endorsement. IFRS 9 is not expected to have a significant impact on the Group.IFRS 15, Revenue from contracts with customers’ deals with revenue recognition and establishes principlesfor reporting useful information to users of financial statements about the nature, amount, timing anduncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue isrecognised when a customer obtains control of a good or service and thus has the ability to direct the useand obtain the benefits from the good or service. The standard replaces lAS 18 Revenue’ and lAS 11Construction contracts’ and related interpretations. The standard is effective for annual periods beginning

on or after 1 January 2018 and earlier application is permitted subject to EU endorsement. IFRS 15 is notexpected to have a significant impact on the Group.

Critical accounting estimates and areas of judgment• The preparation of the consolidated financial statements in conformity with IFRS requires management to make

estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,income, expenses and related disclosures. The estimates and underlying assumptions are based on historicalexperience and other relevant factors. This approach forms the basis of making the judgments about carryingvalues of assets and liabilities that are not readily apparent from other sources. Actual results may differ fromthese estimates.

• The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimatesmay be necessary if there are changes in the circumstances on which the estimate was based or as a result ofnew information. Such changes are recognised in the period in which the estimate is revised.

• The key assumptions about the future and key sources of estimation uncertainty that have a risk of causing amaterial adjustment to the carrying value of assets and liabilities within the next 12 months, are described below.

Intangible assetsThe Group tests its indefinite life intangible assets for impairment annually. At 28 June 2015 the goodwill and brandvalue wholly related to acquisitions that occurred during the period and as such the impairment review has beenundertaken by comparing fair value less costs to sell to carrying value. Fair value is not considered to be materiallydifferent to the value paid by the Group for each of the businesses and as such there is not considered to anyimpairment of the indefinite life intangibles.

14


Valuation of identifiable assets and liabilities on acquisitionsThe consideration paid on an acquisition is allocated to identifiable assets and liabilities at their estimated fair value,with any excess recognised as goodwill. Fair values are estimates, as active markets do not always exist for assetsand liabilities acquired through acquisition and therefore alternative valuation methods are used. The allocation ofconsideration to identifiable assets and liabilities is made on a provisional basis and is revised based upon improvedknowledge in subsequent periods, but no later than one year following the date of acquisition.

The key judgement applied in relation to acquisitions occurring in the period ended 28 June 2015 is the valuationof the PizzaExpress brand. In order to value the brand, management have made certain assumptions aroundexpected future cash flows and discount rate.

Onerous lease and dilapidation provisionsProvisions for onerous leases and dilapidations include estimates such as the length of time a property may beempty for and the value of any make good costs at the end of a lease. Provisions are discounted to present valuewhich requires the use of a discount rate. Provisions are reviewed regulaily and adjusted as appropriate.

Useful lives of tangible assetsDepreciation is provided in order to write down to estimated residual values the cost of each asset over its estimateduseful economic life. These useful economic lives require the use of management judgement. These estimates areregularly reviewed.

Impairment of tangible assetsEach cash generating unit (CGU) is reviewed annually for indicators of impairment. In assessing whether an assethas been impaired, the carrying value of the CGU is compared to its recoverable amount. The recoverable amountis the higher of its fair value and its value in use. Where value in use is estimated, this is calculated using adiscounted cash flow model, which includes assumptions around future performance and the use of an appropriatediscount rate. Future projections are compared to actual performance on a regular basis to assess the accuracyof such projections.

Basis of consolidationThe consolidated financial statements of the Group incorporate the financial statements of the Company and thoseentities controlled by the Company. The accounting reference date for the Group is 30 June and the financialstatements are prepared to the Sunday falling nearest this date each year.

SubsidiariesSubsidiaries are all entities (including structured entities) over which the Group has control. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the dateon which control is transferred to the Group. They are deconsolidated from the date that control ceases. Acquisitionrelated costs are expensed as incurred.

Intra-Group transactions, balances, and unrealised gains and losses on transactions between Group companiesare eliminated on consolidation.

With the exception of the subsidiaries incorporated in China, Hong Kong and UAE, all subsidiaries havecoterminous year ends. The subsidiaries incorporated in China and Hong Kong have a year end of 31 Decemberas this is required under Chinese law. Where subsidiaries do not have a coterminous year end, financial informationis prepared by the subsidiaries for a period equal to that of rest of the Group.

15


Business combinationsAll acquisitions are accounted for using the acquisition method of accounting. The cost of an acquisition is theaggregate of the fair values of the assets transferred, liabilities incurred or assumed and equity instruments in issueat the date of acquisition.

Costs directly relating to an acquisition are expensed to the statement of comprehensive income. The identifiedassets and liabilities and contingent liabilities are measured at their fair value at the date of acquisition. The excessof the fair value of consideration to acquire the business over the aggregate fair value of the Group’s share of thenet identified assets and liabilities is recorded as goodwill.

TurnoverTurnover represents net invoiced sales of food and beverages, royalties from retail sales, sales of dough productsand franchise fees, all excluding value added tax. Turnover of restaurant services is recognised when the serviceshave been delivered. Royalties from retail sales are recognised in turnover on product delivery or when due underthe terms of the relevant retail sales agreements. Turnover from the sale of dough products is recognised ondespatch, as this is when the risks and rewards of ownership transfer to the third party. Franchise fees arisingoutside the United Kingdom are recognised when they fall due under the terms of the relevant franchiseagreements.

Allocation of costsCost of sales includes the cost of goods sold, direct labour costs and restaurant overheads. Administrativeexpenses include central and area management, administration and head office costs.

Holiday pay accrualA liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the statement offinancial position date and carried forward to future periods. This is measured at the undiscounted salary cost ofthe future holiday entitlement so accrued at the statement of financial position date.

Property, plant and equipmentTangible fixed assets are stated at original historical purchase cost less accumulated depreciation.

Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its workingcondition for its intended use.

Depreciation is provided at the following annual rates in order to write down the cost of each asset over itsestimated useful economic life on a straight line basis:

Equipment 20% per annumFixtures and fittings 10% per annum

Short leasehold improvements are depreciated over the length of the lease except where the anticipated renewalor extension of the lease is sufficiently certain so that a longer estimated useful life is appropriate. Currentlegislation and the terms of the lease contracts are such that the majority leases are readily extendable. Themaximum depreciation period for short term leasehold properties is 30 years.

Assets under construction include tangible fixed assets acquired for restaurants under construction including costsdirectly attributable to bringing the asset into use. Assets are transferred to short leasehold, equipment or fixturesand fittings when the restaurant opens. No depreciation is provided on assets under construction as these assetshave not been brought into working condition for intended use by the Group.

Intangible assets (excluding goodwill and brand)Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets aremeasured at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is provided at the following annual rates in order to write down to estimated residual values the costof each asset over its estimated useful economic life on a straight line basis:

Computer software 6.66% - 20% per annum

Trademarks are considered to have an infinite useful life and are therefore not depreciated.

16


GoodwillGoodwill arising on consolidation represents the excess of consideration transferred over the interest in the netfair value of the net assets acquired. The carrying value of the goodwill allocated to each cash generating unit iscompared to its recoverable amount being the higher of its value in use and its fair value less costs to sell. Animpairment review is carried out annually or when circumstances arise that may indicate an impairment is likely.Any impairment is charged immediately to the consolidated statement of comprehensive income.

BrandThe Group carries assets on the balance sheet for brands that have been acquired. Internally generated brandsare not recognised. Cost is determined at acquisition as being directly attributable cost or, where relevant, byusing an appropriate valuation method. Acquired brands with an indefinite useful economic life are tested forimpairment annually. The acquired brand shown in these financial statements is considered to have an indefiniteuseful economic life due to the history, profit and market position of the trade name.

Operating leasesRentals paid under operating leases are charged to the income statement on a straight line basis over the term ofthe lease. The benefit of lease incentives are taken to the income statement on a straight line basis over the leaseterm. Contributions received from landlords as an incentive to enter into a lease are treated as deferred incomewithin creditors and are taken to the income statement on a straight line basis over the lease term. Rentals receivedunder operating leases are credited to the income statement on a straight line basis over the term of the lease.

Exceptional itemsExceptional items are material items of income and expense that, because of the unusual nature and expectedinfrequency of the events giving rise to them, merit separate presentation to allow an understanding of the Group’sfinancial performance.

PensionsContributions to defined contribution personal pension schemes are charged to the income statement in the periodin which they become payable.

TaxationThe tax expense represents the sum of current tax and deferred tax.

Current taxationCurrent tax payable is based on taxable profit for the period which differs from accounting profit as reported in thestatement of comprehensive income because it excludes items of income or expense that are taxable or deductiblein other years and those items never taxable or deductible. The Group’s liability for current tax is measured usingtax rates that have been enacted or substantively enacted by the reporting date.

Deferred taxationDeferred tax is the tax expected to be payable or recoverable on differences between the carrying amount ofassets and liabilities in the consolidated financial statements and the corresponding tax base used in thecomputation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognisedto the extent that it is probable that future taxable profits will be available against which deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises fromthe initial recognition of goodwill or from the initial recognition (other than in a business combination) of otherassets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the substantively enacted tax rates at the balance sheet date that are expected toapply to the period when the asset is realised or the liability is settled. Deferred tax is charged or credited incomprehensive income, except when it relates to items credited or charged directly to equity, in which case thedeferred tax is dealt with in equity, or items charged or credited directly to other comprehensive income, in whichcase the deferred tax is also recognised in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assetsand liability and when the Group intends to settle its current tax assets and liabilities on a net asset basis.

17

PizzaExpress Financing 1 plcNotes to the Consolidated Financial StatementsFor the penod from 4 July 2014 to 28 June 2015

InventoryInventories are valued at the lower of cost and net realisable value. Cost is based on the purchase cost on a first-in, first-out basis. Inventories comprises food and drink and items that are utilised in the rendering of services tocustomers.

Rebates receivable from suppliersWhere a rebate agreement with a supplier covers more than one period the rebates are recognised in the financialstatements in the period in which they are earned.

Foreign currency transactionsTransactions denominated in foreign currencies are recorded at the spot rate applicable at the date of thetransaction. Monetary assets and liabilities expressed in foreign currencies held at the balance sheet date aretranslated at the closing rate. The resulting exchange gain or loss is dealt with in the income statement. Theresults of foreign subsidiaries are translated at the average rate. The balance sheets of foreign subsidiaries aretranslated at the closing rate. The resulting exchange differences are dealt with through reserves and are reportedin the consolidated statement of comprehensive income and expense.

Financial instrumentsFinancial assets and financial liabilities are recognised when the Group has become a party to the contractualprovisions of the instrument.

Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost, less anyprovision for impairment. A provision for impairment is established when the carrying value of the receivableexceeds the present value of the future cash flows discounted using the original effective interest rate. The carryingvalue of the receivable is reduced and any impairment loss is recognised in the Consolidated Statement ofComprehensive Income.

Cash and cash equivalentsCash and cash equivalents comprise cash at bank and in hand and other short term deposits held by the Groupwith maturities of less than three months. Bank overdrafts are presented within current liabilities.

BorrowingsBorrowings are initially stated at the fair value of consideration received after deduction of issue costs and includingany premium received on issue. The issue costs and interest payable on borrowings are charged to the profit andloss account over the term of the borrowings using the effective rate of interest, or over a shorter period where it ismore likely than not that the lender will require earlier repayment or where the borrower intends or is required toredeem early. Facility fees on revolving credit facilities are included within prepayments and amortised over theterm of the facility.

Trade payablesTrade payables are not interest bearing and are recognised initially at fair value and subsequently measured atamortised cost.

ProvisionsProvisions are recognised when the Group has a present legal obligation as a result of a past event which it isprobable will result in an outflow of economic benefits that can be reliably estimated. Where the effect of the timevalue of money is material, the provision is based on the present value of future oufflows, discounted at the pretax discount rate that reflects the risks specific to the liability. Provisions for onerous leases are recognised whenthere are foreseeable net cash outflows on a lease which has more than one year before expiring or option toexercise a break.

Share-based paymentsThe Group operates a share scheme under which shares are granted to certain employees. The scheme meetsthe definition of an equity-settled share-based payment scheme. The costs of equity-settled transactions aremeasured at fair value at the date of grant and are expensed on a straight line basis over the vesting period. Theamount recognised as an expense is adjusted to reflect the actual number of share that are expected to vest.

18


3. Turnover

Business sector analysisThe split of turnover by sector during the period is as follows:


2015£000

Restaurant income 356415Wholesale income 3,428Overseas franchise income 2524Merchandising income 8,632

370,999

Geographical sector analysisTurnover by destination and by origin from countries other than the United Kingdom and Republic of Ireland wasnot sufficiently material in the financial period to warrant separate disclosure.

4. Operating profit

Group operating profit has been arrived at after charging I (crediting):


2015£000

Amounts payable under operating leases - land and buildings 34,211Foreign currency losses 173Depreciation of owned assets 16,455Rent receivable (1,772)Loss on disposal of assets 484Exceptional items (note 5) 10,578

During the period the Group incurred costs relating to services provided by the Group’s auditors:- Audit of parent and subsidiary companies 184- Corporate finance services 244- GAAP transition 42- Other assurance services 36

19


5. Exceptional itemsPenod from4 July 2014to 28 June

2015£000

Legal claim 300GAAP transition 100Acquisition related costs 10,178

10,578

Acquisition related costs were incurred in relation to the acquisition of the PizzaExpress Group and the UAE andChina franchise businesses (see note 23 for details of these acquisitions). The acquisition related costs includelegal and professional fees incurred as part of the purchase process, such as stamp duty, fees for due diligenceand drafting and review of legal documents.

6. Finance income and finance costPeriod from4 July 2014to 28 June

2015£000

Finance incomeBank interest receivable 86

86

Finance costInterest on loan notes 40,571Interest on loan from parent company 26,536Amortisation of debt finance costs 2,100Other finance costs 430

69,637

7. Staff costs

The aggregate remuneration for the employees of the Group comprised:Period from4 July 2014to 28 June

2015£000

Wages and salaries 117,383Social security costs 7,212Other pension costs 651

125,246

The average monthly number of persons (including Executive Directors) employed by the Group during the periodwas:


By activity 2015No.

Head office 210Restaurant staff 10,737

10,947

20

PizzaExpress Financing 1 plc

Notes to the Consolidated Financial StatementsFor the period from 4 July 2014 to 28 June 2015

7. Staff costs (continued)

The aggregate remuneration to Directors of the Group comprised:


2015£000

Directors’ emoluments 1,041Share based payment charge 64

1,105

Included within Directors’ emoluments is £53,000 relating to cash pension allowances.

The highest paid director received remuneration of £615,000, including £32,000 in relation to a cash pensionallowance, and the share based payment charge was £48,000.

During the period 2 directors received shares under the long term incentive schemes.

See note 26 for details of Key Management Personnel remuneration.

21

PizzaExpress Financing 1 plc

Notes to the Consolidated Financial StatementsFor the period from 4 July 2014 to 28 June 2015

8. Share based payments

The Group operates a share scheme under which shares in the indirect parent entity of the Company, PizzaDeliziosa Limited, are granted to certain senior employees of the Group.

On 30 December 2014, 49,500 B shares were issued for nil consideration and 20,000 C shares for considerationof £5.00 per share. A further 1,500 B shares were issued on 9 March 2015 for nil consideration and 2,750 on 20April 2015. A total of 26,250 B shares remain unissued as at 28 June 2015.

The shares are not subject to any performance conditions but are subject to forfeiture on cessation ofemployment.

The shares only deliver a return to the employees on the sale of the indirect parent entity in which the shares areheld and only in the event that the proceeds for the sale exceed the level of debt held in the subsidiaries of PizzaDeliziosa Limited, the indirect parent entity of the Company.

Assumptions used in valuation of share-based payments granted during the period ended 28 June 2015:

Model

Grant date

Share priceExercise priceVolatilityExpected termRisk free rateDividend yieldFair value per shareAcquisition costFair value less acquisition costNumber of shares subject to award

Total fair value charge

_____________________________

The total fair value charge is being recognised in the income statement over the expected term of 4 years. Theexpense recognised in the period for share based payments relating to equity settled share based paymentstransactions is £140,000.

Calculation of fair value B Shares

Black-ScholesDecember2014March 2015and April 2015£280.98£465.3724.40%4 years1.10%0.00%£15.70£ nil£15.7053,250

C Shares

Black-ScholesDecember2014

£280.98£465.3724.40%4 years1.10%0.00%£15.70£5.00£10.7020,000

£836,025 £214,000

22

PizzaExpress Financing I plcNotes to the Consolidated Financial StatementsFor the period from 4 July 2014 to 28 June 2015

9. Income tax expense

Periodfrom 4

July 2014to 28

Tax expense included in profit or loss June 2015£000

Current tax:UK corporation tax on profits for the year 4,710

Total current tax 4,710

Deferred tax:Origination and reversal of timing differences 1,317

Total deferred tax 1,317

Tax on profit on ordinary activities 6,027

The tax assessed for the year is higher than the standard rate of corporation tax in the United Kingdom of 20.81%.The differences are reconciled below:

Periodfrom 4

July 2014to 28

June 2015£000

Loss on ordinary activities before tax (10,540)

Loss multiplied by the standard rate of tax in the UK of 20.81% (2,193)

Effects of:-

Depreciation in excess of capital allowancesDepreciation on non-qualifying assets 705

Interest not deductible for tax purposes 5,522

Acquisition costs not deductible for tax purposes 2,118

Other expenses not deductible for tax purposes 473

Effect of overseas tax at lower rate (689)

Capital gains 48

Tax charge 6,027

Factors that may affect future tax charges

The standard rate of corporation tax in the UK changed from 21 % to 20% with effect from 1 April 2015. Accordingly,the Group’s profits for this accounting period are taxed at an effective rate of 20.81%. Any changes in the rate ofUK corporation tax will have an impact on the future tax charge. Changes to the UK corporation tax rates wereannounced in the Chancellor’s Budget on 8 July 2015. These include reductions to the main rate to reduce the rateto 19% from 1 April 2017 and to 18% from 1 April 2020. As the changes had not been substantively enacted atthe balance sheet date their effects are not included in these financial statements. The overall effect of thesechanges, if they had applied to the deferred tax balance at the balance sheet date, would be to reduce the deferredtax liability by an additional £11,529,000 and reduce the tax expense for the period by £11,529,000.

Based on current capital investment plans, the Group expects to be able to claim capital allowances in excess ofdepreciation in future periods.

23


10. Intangible assets

Computer

software

£000

Cost

Acquisition of subsidiaries — PizzaExpressGroupAcquisition of subsidiaries - Jordana -

Restaurants LLCAcquisition of subsidiaries - PizzaExpress - -

(Hong Kong) LimitedAdditions in period

_____________________________________________________________

At 28 June 2015

Accumulated amortisation

Charge for the period

__________________________________________________________

At 28 June 2015

Net book value

At 28 June 2015

GoodwillThe goodwill recognised relates to the acquisition of the ordinary share capital of PizzaExpress Operations Limited(formerly Gondola Investments Limited), PizzaExpress (Franchises) Limited and PizzaExpress Greater ChinaLimited, PizzaExpress (Hong Kong) Limited and Jordana Restaurants LLC which are each considered to be cashgenerating units (CGU”). The goodwill balance is tested annually for impairment.

BrandThe brand recognised as an intangible asset relates to the PizzaExpress brand. The brand was valued using thediscounted five year cash flow forecast and after the five years the cash flows were taken into perpetuity. The brandis considered to have an indefinite life due to the history, profit and market position of the trade name.

Trademarks

£000

149

Brand Goodwill Total

£000 £000 £000

1,340 515,000 324,459 840,948

3,656 3,656

49,582 49,582

50 347 - - 397199 1,687 515,000 377,697 894,583

- (541) - - (541)- (541) - - (541)

199 1,146 515,000 377,697 894,042

24


11. Property, plant and equipment

ShortLeasehold

£ 000

Fixturesand

fittings£000

Acquisition of subsidiaries —

PizzaExpress GroupAcquisition of subsidiaries —

Jordana Restaurants LLCAcquisition of subsidiaries -

PizzaExpress (Hong Kong) LimitedForeign exchange movementAdditionsDisposalsTransfersAt 28 June 2015

Accumulated depreciationCharge for the periodForeign exchange movementEliminated on disposalsAt 28 June 2015

Net book valueAt 28 June 2015

8,298 187,821

336 956

1,952 9,710

(2,556)28,535(1,790)

222,676

(8,262) - (4,270) (3,382) (15,914)669 - 200 328 1,197855 - 91 523 1,469

(6,738) - (3,979) (2,531) (13,248)

159,118 2,594 35,589 12,127 209,428

For the purposes of tangible asset impairment reviews, the Group considers each trading outlet to be a cashgenerating unit (CGU) and each CGU is reviewed annually for indicators of impairment of tangible assets. Inassessing whether an asset has been impaired, the carrying value of the CGU is compared to its recoverableamount. The recoverable amount is the higher of its fair value and its value in use.

The Group estimates value in use using a discounted cash flow model. Future cash flows are based onassumptions from the business plans and cover a five year period.

Cost

Assets underconstruction

£ 000Equipment

£ 000Total£ 000

144,539 7,397 27,587

42 - 578

6,718 - 1,040

(1,736) - (396) (424)1,511 19,553 4,437 3,034

(1,052) - (266) (472)15,834 (24,356) 6,588 1,934

165,856 2,594 39,568 14,658

25


12. Inventories

2015£000

Food and drink 3,227Equipment 5,114

8,341

The amount of inventories recognised as an expense during the period was £67,290,000. No write down of inventorieswas recognised in the period. Equipment relates to items utilised in the rendering of services to customers.

13. Trade and other receivables

2015£000

Amounts falling due within one yearTrade receivables 5,688Other receivables 5,423Prepayments 16,259Accrued income 2,429

29,799

Other receivables falling due within one year include rental deposits of £2,683,000.

The fair value of the financial instruments included within trade and other receivables are not considered to be materiallydifferent from their carrying value, as the impact of the discounting is not significant. The fair values are based ondiscounted cash flows and are within level 3 of the fair value hierarchy.

14. Cash and cash equivalents

2015£000

Cash at bank and in hand 49,27349,273

26


15. Borrowings

2015£000

Senior Notes and Senior Secured Notes 646,898Loan from parent company 334,153

981,051

The fair value of the financial instruments included within borrowings are not considered to be materially different fromtheir carrying value, as the impact of the discounting is not significant. The fair values are based on discounted cashflows and are within level 3 of the fair value hierarchy.

The Group’s loan facilities as at 28 June 2015 comprise:

Senior Notes and Senior Secured Notes

The Senior Secured Notes of £465,000,000 carry interest at a fixed rate of 6.625% and are due for repayment atthe maturity date in August 2021. The Senior Notes comprise £410,000,000 of notes issued on 31 July 2014 anda further £55,000,000 of notes issued on 2 June 2015. On 25 August 2014 the notes were listed on the IrishStock Exchange.

Debt issue costs of £15,885,000 have been capitalised and offset against the loan note principal balance. Theissue costs are being amortised over the term to maturity and at 28 June 2015, unamortised issue costsamounted to £14,360,000. A premium of2,888,000 was received on the notes issued on 2 June 2015. Thepremium has been added to the loan note liability and is being amortised over the term to maturity. At 28 June2015 the unamortised premium was £2,863,000.

The Senior Notes (issued by the Company) of £200,000,000 carry interest at a fixed rate of 8.625% and are duefor repayment at the maturity date in August 2022. The notes were issued on 31 July 2014.

Debt issue costs of7,180,000 have been capitalised and offset against the loan note principal balance. Theissue costs are being amortised over the term to maturity and at 28 June 2015, unamortised issue costsamounted to £6,605,000.

Other loans

The loan from the parent company of £307,617,000 accrues interest at a compound fixed rate of 10% per annum andis due for repayment at the maturity date in August 2024. Interest of £26,536,000 was accrued against the loan duringthe period, Interest shall accrue and be aggregated with the principal balance until such time that the loan is repaid.

27


16. Trade and other payables

2015£000

Amounts falling due within one year:Trade payables 14,832Accruals 61,526Deferred income 2,361Other payables 10,662Social security and other taxes 15,930

105,311

Amounts falling due in more than one year:Accruals 1,037

1,037

The fair values of the financial instruments included within trade and other payables is not considered to be materiallydifferent from their carrying value, as the impact of the discounting is not significant. The fair values are based ondiscounted cash flows and are within level 3 of the fair value hierarchy.

Other payables falling due within one year include a wages creditor of £8,905,000.

Accruals falling due in more than one year related to deferred consideration for the acquisition of PizzaExpress(Hong Kong) Limited and subsidiaries. Deferred consideration of £10,706,000 is also included within accruals fallingdue within one year.

28


17. Provisions for other liabilities and charges

2015£000

Acquisition of subsidiaries — PizzaExpress Group 2,015Utilised in period (183)

Additional provision in period 29

Unwinding of discount 142

At 28 June 2015 2,003

Provisions for liabilities and charges relate to onerous lease and dilapidation provisions. These provisions representoperating leases on properties no longer in use, until the end of their leases or until the Directors estimate theproperties can be sublet, as well as an estimate of dilapidations payable on leases held by the Group. This provisionis expected to be utilised within the next five years.

18. Deferred tax

2015£000

Acquisition of subsidiaries— PizzaExpress Group 114,095Acquisition of subsidiaries — PizzaExpress (Hong Kong) Limited 20Additional provision in period 1,317Foreign exchange movement (28)At28 June 2015 115,404

The deferred tax liability can be analysed as follows:

2015£000

Capital allowances in excess of depreciation 13,484Carried forward tax losses (1,080)Fair value of brand on consolidation 103,000

115,404

The Group expects to recover the deferred tax asset on tax losses within 12 months of the balance sheet date andthe remainder of the deferred tax liability after more than 12 months.

29


19. Financial risk management

The main financial risks associated with the Group have been identified as liquidity risk, interest rate risk, foreignexchange risk and credit risk. The Directors are responsible for managing these risks and the policies adopted areset out below.

Liquidity riskThe Group finances its operations through a mixture of equity (Company share capital, reserves and retainedearnings) and debt. The Group manages its liquidity risk by monitoring its existing facilities for both financialcovenant and funding headroom against forecast requirements based on short term and long term cash flowforecasts.

Maturity analysisThe following table sets out the contractual undiscounted maturities including estimated cash flows of the financialliabilities of the Group at 28 June 2015:

Loans and borrowingsTrade and other payables

I to 2

- 999,153 999,153-

- 92,721- 999,153 1,091,874

The £999,153,000 of loans and borrowings maturing in over 5 years are due for repayment as follows:

Total£000

August 2021August2022August 2024

Interest rate risk

465,000200,000334,153999,153

Interest rate risk reflects the Groups exposure to fluctuations in interest rates in the market. All of the financialliabilities of the Group are either non-interest bearing or charged at a fixed rate of interest.

The following table sets out the interest rate risk associated with the Group’s financial liabilities at 28 June 2015:

Loan notesLoan from parent companyTrade and other payables

Floating Non-interestFixed rate rate bearing

£000 £000 £000

665,000334,153

The financial assets of the Group amounting to £62,812,000 with the exception of cash and cash equivalentsamounting to £49,273,000 are all non-interest bearing.

At present the Group’s does not manage its interest rate risk through interest rate swap contracts or any otherderivatives.

Less than1 year

£000

91,49191,491

2to5 Over5years years£000 £000

years£000

1,2301,230

Total£000

Total£000

- 665,000- 334,153

91,8181,090,971

-- 91,818

999,153 - 91,818

30


19. Financial risk management (continued)

Foreign currency riskThe Group is exposed to changes in foreign currency rates. Foreign exchange risk arises from future commercialtransactions as the Group purchases certain goods from European suppliers. This is partially mitigated at the grouplevel by a subsidiary company generating income in Euros.

The Group has subsidiaries whose functional currency is not sterling and is therefore exposed to translation risk inrelation to these entities.

Where the Group expects to undertake a significant transaction in a foreign currency, foreign exchange forwardcontracts are utilised. As the Group expects to expand internationally and will be exposed to more foreign exchangerisk, it will develop a hedging strategy using derivatives to manage this risk.

Credit riskThe Groups credit risk predominantly arises from trade receivables and cash and cash equivalents.

Trade and other receivables comprise mainly card payments receivable, therefore credit risk is considered to below. Trade and other receivables also includes franchise and royalty fees due.

Credit risk also arises on cash and cash equivalents held with banks.

An analysis of the ageing of trade receivables is given below:

28 June2015£000

Current 5,606Less than 30 days 7130—60 daysMore than 60 days 10

5,687

As at28 June 2015, no trade or other receivables were impaired.

Capital managementThe Group’s policies seek to protect returns to shareholders by ensuring the Group will continue to trade profitablyin the foreseeable future. The Group also aims to optimise its capital structure of debt and equity so as to minimiseits cost of capital.

The capital of the Group as at 28 June 2015 is summarised as follows:

Total£000

Total borrowings 981,051Less cash and cash equivalents (49,273)Net debt 931,778Total equity (13,394)Total capital 918,384

The Group manages its capital with regard to the risks inherent in the business and the sector within which itoperates by monitoring its actual cash flows against debt maturities, financial covenants and the cash flowforecasts reviewed by the Directors.

31


20. Financial instruments

The following tables categorise the Group’s financial assets and liabilities included in the consolidated statementof financial position:

Loans andreceivables

Assets £000

Trade and other receivables 13,539Cash and cash equivalents 49,273

62,8 12

Other financialliabilities

at amortisedcost

Liabilities £000

Loans and borrowings 999,153Trade and other payables 91,818

1,090,971

No available for sale financial assets or derivatives at fair value were held at 28 June 2015.

Fair value estimationThe different levels of fair value have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, eitherdirectly (that is, as prices) or indirectly (that is, derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs)

The Group’s financial instruments are all measured at amortised cost. The fair value of these financial instrumentsis not considered to be materially different from their amortised cost value.

21. Pensions

The Group operates a defined contribution pension scheme and the pension costs charged to the incomestatement are the amounts paid by the Group to the scheme during the period.

The pension contribution recognised in the income statement during the period was £651,000. Contributionstotalling £44,000 were outstanding at period end and are shown in other creditors.

32


22. Share capital and share premium2015

£000Allotted and issued:50,100 Ordinary Shares of £1 each 50

50

The Company was incorporated on 4 July2014 with the issue of I Ordinary £1 share for total consideration of1.On 8 July 2014 a further 49,999 Ordinary £1 shares were issued for a total consideration of49,999. On 18August 2014 a further 1 Ordinary £1 shares was issued for total consideration of £4,450,000.

33

PizzaExpress Financing 1 plcNotes to the Consolidated Financial StatementsFor the period from 4 July2014 to 28 June 2015

23. Acquisitions

PizzaExpress Group (PizzaExpress Operations Limited, PizzaExpress (Franchises) Limited and PizzaExpressGreater China Limited)

On 18 August 2014, PizzaExpress Financing 2 plc (formerly Twinkle Pizza plc, a newly formed intermediate holdingcompany) acquired PizzaExpress Operations Limited (formerly Gondola Investments Limited), PizzaExpress(Franchises) Limited and PizzaExpress Greater China Limited. The total consideration paid to acquire thesebusinesses, including repayment of intercompany debt, amounted to £920,052,000 and the consideration paid isconsidered to be the fair value. The transaction is accounted for using the acquisition method of accounting.

Fair value£000

Intangible assets 516,489Property, plant and equipment 187,821Inventories 7,303Trade and other receivables 20,167Cash and cash equivalents 40,657Trade and other payables (364,787)Deferred tax liability (114,095)Provisions (2,015)

291,540

Satisfied by:Cash consideration 615,999Total purchase price 615,999

Goodwill arising on acquisition 324,459

Acquisition related costs of £9,329,000 have been charged to exceptional expenses in the consolidated incomestatement for the period ended 28 June 2015.

At the date of acquisition, intercompany borrowings of £304,053,000 became a third party creditor. This balance isrecognised in the trade and other payables balance above. Upon completion of the acquisition of the PizzaExpressGroup, the balance was repaid in full, as a condition of the purchase.

The financing of the acquisition was provided by:

- PizzaExpress Financing 2 plc (formerly Twinkle Pizza plc a newly formed intermediate holding company)issued £410 million aggregate principal amount of its 6.625% Senior Secured Notes due 2021 (the SeniorSecured Notes”) on 31 July 2014: and

- The Company issued £200 million aggregate principal amount of its 8.625% Senior Notes due 2022 (the“Senior Notes”).

Upon acquisition the assets and liabilities of PizzaExpress Operations Limited (formerly Gondola InvestmentsLimited), PizzaExpress (Franchises) Limited and PizzaExpress Greater China Limited were fair valued, resulting infollowing adjustments:

(1) Brand value — recognition of the value of the PizzaExpress brand name and the related deferred tax impact.

The goodwill arising on the acquisition of the PizzaExpress business is attributable to the future anticipatedprofitability of the business, future opportunities in new markets, the knowledge and capabilities required tosuccessfully operate and expand a restaurant chain, the assembled workforce and the portfolio of leases held bythe acquired group. The goodwill is not deductible for tax purposes.

34

PizzaExpress Financing I plcNotes to the Consolidated Financial StatementsFor the period from 4 July 2014 to 28 June 2015

23. Acquisitions (continued)

PizzaExpress Group (PizzaExpress Operations Limited, PizzaExpress (Franchises) Limited and PizzaExpressGreater China Limited) (continued)

The revenue included in the consolidated statement of comprehensive income since 18 August2014 contributedby the acquired PizzaExpress Group was £367,891 ,000.The Group also contributed profit of £48,881,000 overthe same period.

Had the acquired PizzaExpress Group been consolidated from 4 July 2014 the consolidated statement of incomewould show pro-forma revenue of £424,638,000 and a loss of £5,529,000.

Jordana Restaurants LLC (PizzaExpress UAE)

On 7 May 2015, PizzaExpress International Holdings Limited, (a wholly owned subsidiary) acquired 49% of theissued share capital of Jordana Restaurants LLC, equating to a beneficial interest of 100%, for a purchase price of£4,357,000m. Jordana Restaurants LLC operated seven restaurants in the United Arab Emirates at time ofacquisition, which were previously operated under a franchise agreement with PizzaExpress (Franchises) Limited.Accordingly, from the date of acquisition the results of this entity have been consolidated.

The total consideration paid to acquire these businesses amounted to £4,357,000 and the consideration paid isconsidered to be the fair value. The transaction is accounted for using the acquisition method of accounting.

Fair value£000

Property, plant and equipment 914Inventories 100Trade and other receivables 715Cash and cash equivalents 120Trade and other payables (1,148)

701

Satisfied by:Cash consideration 4,257Contingent consideration 100Total purchase price 4,357


Acquisition related costs of £226,000 have been charged to exceptional expenses in the consolidated incomestatement for the period ended 28 June 2015.

The financing of the acquisition was provided by cash generated by the operations of the Group.

Upon acquisition the assets and liabilities of Jordana Restaurants LLC (PizzaExpress UAE) were recognised atfair value, resulting in adjustments for receivables and payables to the previous owners that were waived as partof the acquisition.

The goodwill arising on the acquisition of Jordana Restaurants LLC (PizzaExpress UAE) is attributable to the futureanticipated profitability of the business. The goodwill is not deductible for tax purposes.

Had Jordana Restaurants LLC been consolidated from 4 July 2014 the consolidated statement of income wouldshow pro-forma revenue of £377,736,000 and a loss of £1 6,196,000.

35


23. Acquisitions (continued)

PizzaExress (Hong Kong) Limited

On 12 May 2015, PizzaExpress Group Limited entered into a sale and purchase agreement with The Greater ChinaRestaurant Company Limited to acquire all of the issued share capital of PizzaExpress (Hong Kong) Limited, acompany incorporated in Hong Kong, and its subsidiaries, for a purchase price of £64,262,000. The acquisitioncompleted on 10 June 2015. At the date of acquisition, the acquired companies operated 27 restaurants in Chinawhich were previously operated under a franchise agreement with PizzaExpress (Franchises) Limited.

The total consideration paid to acquire these businesses amounted to £64,262,000 and the consideration paid isconsidered to be the fair value. The transaction is accounted for using the acquisition method of accounting.

Fair value£000

Property, plant and equipment 9,906Inventories 583Trade and other receivables 6,108Cash and cash equivalents 2,710Trade and other payables (4,627)

14,680

Satisfied by:Cash consideration payable on acquisition 52,519Cash consideration accrued at period end 2,727Deferred consideration payable June 2016 7,979Deferred consideration payable June 2017 1,037Total purchase price 64,262


Acquisition related costs of £415,000 have been charged to exceptional expenses in the consolidated incomestatement for the period ended 28 June 2015.

The financing of the acquisition was provided by PizzaExpress Financing 2 plc issuing, on 2 June 2015, £55 million6.625% Senior Secured Notes due 2021.

Upon acquisition of the assets and liabilities of PizzaExpress (Hong Kong) Limited there were two fair valueadjustments, both to bring the book value of the assets and liabilities in line with Group accounting policies.

The goodwill arising on the acquisition of PizzaExpress (Hong Kong) Limited is attributable to the future anticipatedprofitability of the business. The goodwill is not deductible for tax purposes.

Had PizzaExpress (Hong Kong) Limited and its subsidiaries been consolidated from 4 July 2014 the consolidatedstatement of income would show pro4orma revenue of £406,948,000 and a loss of £15,584,249.

36


24. Contingent liabilities

On 31 July 2014, various subsidiaries in the Group became guarantors to Senior Secured Notes and SeniorNotes issued by by the Company’s and its subsidiary PizzaExpress Financing 2 Limited respectively. FurtherSenior Secured Notes were issued by PizzaExpress Financing 2 Limited on 2 June 2015, for which subsidiarieshave also provided a guarantee. These guarantees are over substantially all of the assets held by the Group.

The amounts outstanding at the balance sheet date in relation to these notes were £477,517,000 for the SeniorSecured Notes and £207,007,000 for the Senior Notes, including accrued interest.

On 31 July 2014 various subsidiaries also became a potential guarantor to a Revolving Credit Facility (the RCF’)made available to PizzaExpress Financing 2 Limited, who may request that any of its subsidiaries become aguarantor to the facility. The RCF is currently not drawn down.

25. Operating lease arrangements

The Group leases restaurants, offices and warehouses under non-cancellable operating lease agreements. Thelease terms are generally between 15 and 25 years, and the majority of lease agreements are renewable at theend of the lease period at market rate. At 28 June 2015, the total future value of the Group’s minimum leasepayments under non-cancellable operating lease were due as follows:

Lessee2015£000

Land and buildingsNot later than one year 42,155Later than one year and no later than five years 152,523Later than five years 286,338

481,016

Lessor2015£000

Land and buildingsNot later than one year 1,835Later than one year and no later than five years 2,975Later than five years 2,627

7,437

37


26. Related party transactions

During the period a loan was received from PizzaExpress Group Holdings Limited, the parent entity of PizzaExpressFinancing 1 plc, of307,617,000. This loan accrues interest ata compound fixed rate of 10% per annum and is duefor repayment at the maturity date in August 2024. Interest of £26,536,000 was accrued against the loan during theperiod. Interest shall accrue and be aggregated with the principal balance until such time that the loan is repaid.

During the period a loan of £225,000 to R Hodgson, a director of the Company, was transferred from a previousgroup company. Two additional loans of £497,000 and £100,000 were then made, taking the total loan value atperiod end to £825,000. This value is disclosed within other debtors in the accounts. No interest is accrued on theloan which is repayable on demand.

Amounts paid to Key Management Personnel, aside from those members of Key Management Personnel that werealso Directors during the period, totalled £902000 and contributions to defined benefit pension schemes in relationto these individuals were £28,000.

27. Parent and ultimate parent undertakings

PizzaExpress Financing 1 plc, was incorporated on 4 July 2014 and is wholly owned by PizzaExpress GroupHoldings Limited, a company registered in the UK.

The directors consider Crystal Bright Developments Limited, a company registered in the British Virgin Islands, tobe the ultimate parent company, and private equity firm Hony Capital to be the ultimate controlling party.

38

-

PizzaExpress Financing 1 plcCompany Statement of Financial PositionAs at 28 June 2015

Note 2015£000

AssetsFixed assetsInvestments in subsidiaries 3 4,500

Current assetsTrade and other receivables (of which £529,241,000 due in more than one year) 4 536,835Cash and cash equivalents 5 1

536,836

Total assets 541,336

LiabilitiesNon-current liabilitiesBorrowings 6 (527,548)

Current liabilitiesTrade and other payables 7 (8,179)

Total liabilities (535,727)

Net liabilities 5,609

EquityShare capital 8 50Share premium 8 4,450Retained loss 1,108Total equity 5,609

The notes on pages 41 to 45 form part of these Financial Statements.

The financial statements on pages 39 to 45 were authorised for issue by the Board of Directors on 26 October 2015and were signed on its behalf.

A Pelling1orDirector

39

Comprehensive incomeResult for the period

Transactions with ownersProceeds from the issue of shares 50 4,450

1,108 1,108

- 4,500

At 28 June 2015 50 4,450 1,108 5,609

The notes on pages 41 to 45 form part of these Financial Statements.

PizzaExpress Financing 1 plcCompany Statement of Changes in EquityFor the period from 4 July2014 to 28 June 2015

Share Share Retained Totalcapital premium earnings equity

£000 £000 £000 £000

40

PizzaExpress Financing 1 plcNotes to the Financial StatementsFor the period from 4 July 2014 to 28 June 2015

1. General information

PizzaExpress Financing 1 plc is a limited company domiciled and incorporated in the United Kingdom. TheCompany’s registered office is Hunton House, Highbridge Estate, Oxford Road, Uxbridge, Middlesex, UnitedKingdom, UB8 1LX.

The Company is a financing company for an international chain of pizza restaurants

2. Summary of significant accounting policies

Basis of preparationThe financial statements have been prepared in accordance with Financial Reporting Standard 101 (FRS 101”).The financial statements have been prepared on the historical cost basis, except for the fair valuation of assetsand liabilities of the subsidiary companies acquired during the period.

The principal accounting policies are outlined below.

Disclosure exemptions adoptedIn the preparation of the Company only financial statements of PizzaExpress Financing 1 plc, the followingdisclosure exemptions have been adopted:

• The requirements of IFRS 7 Financial Instruments: Disclosures• Paragraph 79(a)(iv) of lAS 1:• Paragraph 73( e) of lAS 16 Property, Plant and Equipment;• The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and

134-136 of lAS 1 Presentation of Financial Statements• The requirements of lAS 7 Statement of Cash Flows• The requirements of paragraphs 30 and 31 of lAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors• The requirements of paragraph 17 of lAS 24 Related Party Disclosures• The requirements in lAS 24 Related Party Disclosures to disclose related party transactions entered into

between two or more members of a group, provided that any subsidiary which is a party to thetransaction is wholly owned by such a member.

• The requirements of paragraphs 134(d)-134(f) and 135(c )-135(e ) of lAS 36 Impairment of Assets.

The above disclosures, where applicable, are included within the consolidated financial statements

Critical accounting estimates and areas of judgmentManagement have not applied any significant estimates orjudgements in the preparation of the Company financialstatements.

Company statement of comprehensive IncomeAs permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement ofComprehensive Income. The Company’s result for the financial period was £1,108,000 and its othercomprehensive income was £1,108,000.

InvestmentsThe value of the investment in each subsidiary held by the Company is recorded at cost less any impairment in theCompany’s balance sheet.

41

PizzaExpress Financing 1 plcNotes to the Financial StatementsFor the period from 4 July 2014 to 28 June 2015

Financial instrumentsFinancial assets and financial liabilities are recognised when the Company has become a party to the contractualprovisions of the instrument.

Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost, less anyprovision for impairment. A provision for impairment is established when the carrying value of the receivableexceeds the present value of the future cash flows discounted using the original effective interest rate. The carryingvalue of the receivable is reduced and any impairment loss is recognised in the Consolidated Statement ofComprehensive Income.

BorrowingsBorrowings are initially stated at the fair value of consideration received after deduction of issue costs and includingany premium received on issue. The issue costs and interest payable on borrowings are charged to the profit andloss account over the term of the borrowings using the effective rate of interest, or over a shorter period where it ismore likely than not that the lender will require earlier repayment or where the borrower intends or is required toredeem early. Facility fees on revolving credit facilities are included within prepayments and amortised over theterm of the facility.

Trade payablesTrade payables are not interest bearing and are recognised initially at fair value and subsequently measured atamorlised cost.

42

PizzaExpress Financing 1 plcNotes to the Company Financial StatementsFor the period from 4 July 2014 to 28 June 2015

3. Investments in subsidiaries

Company

£000CostAdditions in period 4500At 28 June 2015 4,500

Net book valueAt 28 June 2015 4,500

Name of subsidiary Country of Shares Principal activityincorporation held %

PizzaExpress Financing 2 plc* United Kingdom 100% FinancingPizzaExpress Group Limited United Kingdom 100% Holding CompanyPizzaExpress International Holdings Limited United Kingdom 100% Holding CompanyPizzaExpress (Franchises) Limited United Kingdom 100% International FranchisesPizzaExpress Operations Limited United Kingdom 100% Holding CompanyPizzaExpress (Wholesale) Limited United Kingdom 100% DistributionPizzaExpress Merchandising Limited United Kingdom 100% Branded SalesPizzaExpress UAE Holdings Limited United Kingdom 100% Holding CompanyPizzaExpress Limited United Kingdom 100% Holding CompanyAl Rollo Limited United Kingdom 100% RestaurantsPizzaExpress (Jersey) Limited Jersey 100% RestaurantsAgenbite Limited Eire 100% RestaurantsBookcash Trading Limited United Kingdom 100% RestaurantsPizzaExpress Greater China Limited Hong Kong 100% Holding CompanyRoll&Shake Limited United Kingdom 100% RestaurantsPizzaExpress Beijing Limited China 100% RestaurantsPizzaExpress (Restaurants) Limited United Kingdom 100% RestaurantsJordana Restaurants LLC UAE 49% RestaurantsPizzaExpress (Hong Kong) Limited Hong Kong 100% RestaurantsPizzaExpress China Limited Hong Kong 100% Holding CompanyPizzaExpress Shanghai Limited China 100% RestaurantsPizzaExpress PRD Limited Hong Kong 100% Holding CompanyPizzaExpress (Shenzen) Limited China 100% RestaurantsPandoraExpress 1 Limited United Kingdom 100% DormantPandoraExpress 2 Limited United Kingdom 100% Non tradingPandoraExpress 3 Limited United Kingdom 100% Non tradingPandoraExpress 4 Limited United Kingdom 100% Non tradingPandoraExpress 5 Limited United Kingdom 100% Non tradingPandoraExpress 6 Limited United Kingdom 100% DormantPandoraExpress 7 Limited United Kingdom 100% Non tradingRiposte Limited United Kingdom 100% Non tradingSpeed 3969 Limited United Kingdom 100% DormantWayracer Limited United Kingdom 100% DormantThe Gourmet Pizza Company Limited United Kingdom 100% DormantHalfcity Limited United Kingdom 100% DormantPizzaExpress West Limited Jersey 100% DormantSeptember 1993 Limited United Kingdom 100% DormantPizzaExpress (Soho) Limited United Kingdom 100% Dormant

*Direct shareholdings

43

PizzaExpress Financing 1 plcNotes to the Company Financial StatementsFor the period from 4 July 2014 to 28 June 2015

4. Trade and other receivables

2015£000

Amounts falling due within one yearAmounts due from Group undertakings 7,594

Amounts falling due in more than one yearAmounts due from Group undertakings 529,241

Amounts due from Group undertakings are due from a subsidiary company. £301,617,000 of the amounts due accrueinterest at a compound fixed rate of 10% per annum, with the principal and accrued interest being repayable on 18August 2024. £200,000,000 of the amount due accrue interest at a rate of 8,625% per annum, with interest beingrepayable every six months. The principal is repayable on 18 August 2022.

5. Cash and cash equivalents

2015£000

Cash and cash equivalents 1

6. Borrowings

2015£000

Senior Notes 193,395Loan from parent company 334,153

527,548

Senior Notes

The Senior Notes of200,000,000 carry interest ata fixed rate of 8.625% and are due for repayment at the maturitydate in August 2022. The notes were issued on 31 July 2014.

Debt issue costs of £7,180,000 have been capitalised and offset against the loan note principal balance. The issuecosts are being amortised over the term to maturity and at 28 June 2015, unamortised issue costs amounted to£6,605,000.

Loan from parent company

The loan from parent of £307,617,000 accrues interest at a compound fixed rate of 10% per annum and is due forrepayment at the maturity date in August 2024. Interest of £26,536,000 was accrued against the loan during theperiod. Interest shall accwe and be aggregated with the principal balance until such time that the loan is repaid.

44

PizzaLxpress Financing 1 plcNotes to the Company Financial StatementsForthe period from 4 July 2014 to 28 June 2015

7. Trade and other payables

2015£000

Amounts due from Group undertakings 1,168Accruals 7,011

8,179

8. Share capital and share premium2015

£000Allotted and issued:50,100 Ordinary Shares of £1 each 50

50

The Company was incorporated on 4 July 2014 with the issue of 1 Ordinary £1 share for total consideration of1.On 8 July 2014 a further 49,999 Ordinary £1 shares were issued fora total consideration of £49,999. On 18August 2014 a further 1 Ordinary £1 shares was issued for total consideration of £4,450,000.

9. Contingent liabilities

The Company did not have any contingent liabilities at 28 June 2015.

10. Related party transactions

During the period a loan was received from PizzaExpress Group Holdings Limited, the Company’s parent, of£307,617,000. This accrues interest at a compound fixed rate of 10% per annum and is due for repayment at thematurity date in August 2024. Interest of £26,536,000 was accwed against the loan during the period. Interest shallaccrue and be aggregated with the principal balance until such time that the loan is repaid.

During the period the Company made two loans to its direct subsidiary PizzaExpress Financing 2 plc, as follows:

• A loan of £301 ,61 7,000 which accrues interest at a compound fixed rate of 10% per annum and is due forrepayment at the maturity date in August 2024. Interest of £26,237,000 was accrued against the loanduring the period. Interest shall accrue and be aggregated with the principal balance until such time thatthe loan is repaid.

• A loan of £200,000,000 which accrues interest at a rate of 8,625% per annum, with interest beingrepayable every six months. The principal is repayable on 18 August 2022. Interest of £16,275,000 wasaccrued in the year and payments of interest of £8,673,000 were received.

11. Parent and ultimate parent undertakings

PizzaExpress Financing I plc, was incorporated on 4 July 2014 and is wholly owned by PizzaExpress GroupHoldings Limited, a company registered in the UK.

The directors consider Crystal Bright Developments Limited, a company registered in the British Virgin Islands, tobe the ultimate parent company, and private equity firm Hony Capital to be the ultimate controlling party.

45

PizzaExpress Financing I plc Annual Report and...

Documents

Transcript of PizzaExpress Financing I plc Annual Report and...