9.8mm spine

Transcription

9.8mm spine

Darty plc Annual report 2014/15
Contents
Overview
01 Welcome
02 Highlights
03 Chairman’s statement
Strategic report
05 Our markets
06 Our business model
07 Strategy
09 Chief Executive’s review
17 Operating review
18 Financial review
21 Principal risks
23 Corporate responsibility
Directors’ report
28 Board of Directors
30 Directors’ report
Corporate governance
34 Corporate governance
40 Report on Directors’ remuneration
and related matters
52 Statement of Directors’ responsibilities
Financial statements and notes (IFRS)
53Independent auditors’ report
to the members of Darty plc
58 Group income statement
59Group statement of comprehensive income
60 Group statement of changes in equity
61 Group balance sheet
62 Group cash flow statement
63 Notes to the financial statements
Darty plc (UK GAAP)
110Independent auditors’ report
to the members of Darty plc
112 Company balance sheet
113 Notes to the Company
financial statements
Other information
119 Shareholder information
120 Group five-year summary
Certain statements made in this report are forward looking statements.
Such statements are based on current expectations and are subject to a
number of risks and uncertainties that could cause actual results to
differ materially from any expected future results in forward looking
statements. Unless otherwise required by applicable laws, regulations or
accounting standards, Darty plc does not undertake any obligation to
update or revise any forward looking statements, whether as a result of
new information, future developments or otherwise.
04
08
Successful franchise
operation
Darty brand
development
10
12
Online growth
Improved
customer offer
14
16
Strong kitchens offer
Expansion in
the Netherlands
26
Reducing
environmental impact
Overview
Welcome
The Darty Group is a multi-channel electrical retailer
trading from over 400 stores and websites.
We sell a full range of electrical products from major home and small domestic appliances
to all the latest vision and multimedia products. This is supported by our leading customer
service offer in-store, online, for home delivery and after-sales.
We operate as Darty and Mistergooddeal.com in France, Vanden Borre in Belgium and BCC
in the Netherlands.
France*
Revenue
(€m)
Revenue
growth
Retail profit
(¤m)
Number
of stores**
Selling space
sqm (000s)
Web sales
(% of total sales)
2,813.5
3.5%
70.0
265
322.7
17.4
Belgium and the Netherlands
Revenue
(¤m)
Revenue
growth
Retail profit
(¤m)
Number
of stores
Selling space
sqm (000s)
Web sales
(% of total sales)
698.6
1.7%
14.8
135
142.8
13.1
* Including Mistergooddeal.com
** Including 43 franchise stores
Darty plc Annual report 2014/15 01
Overview
Highlights
Delivering our strategic plan – ‘Nouvelle Confiance’
•Investment in our growth initiatives:
franchise stores opened in the year
•39
delivering strong sales uplifts;
22 per cent increase in web generated
•Over
sales in France following the acquisition of
Mistergooddeal.com, bringing web penetration
to over 17 per cent of product sales;
the kitchen offer into 16 further
•Expanded
stores to a total of 71 stores; and
•
Built on an improved performance at BCC
with the acquisition of 18 profitable stores to
become the leading multi-channel retailer in
the Netherlands.
outperformance in both France and
•Market
the Netherlands.
the elimination of losses in our
•Completed
non-core markets with the sale of our
shareholding in Datart in the Czech Republic
and Slovakia.
Board is recommending a final dividend of
•The
2.625 cents per share (2014: 2.625 cents) bringing
the total dividend for the year to 3.5 cents per
share (2014: 3.5 cents).
02 Darty plc Annual report 2014/15
Financial summary for the 12 months ended 30 April 2015
Group
Revenue
LfL sales
2014/15
2013/14 restated1
€3,512.1m
€3,404.4m
(1.6)%
1.9%
Retail profit2
€74.9.m
€85.5m
Operating profit
€60.3m
€53.4m
€51.3m
€72.1m
Adjusted PBT3
Profit/(loss) for the year
€13.8m
€(6.6)m
5.8 cents
6.5 cents
Basic EPS
2.7 cents
(0.6) cents
Net debt
€223.8m
€185.2m
Total dividend
3.5 cents
3.5 cents
Adjusted EPS3
1
2
3
Restated following the sale of Datart, now classified as discontinued operations,
the CVAE reclassification from operating profit to taxation and the legacy UK
retirement benefit scheme expenses from finance costs to operating profit.
Retail profit represents total operating profit before the share of joint venture and
associates’ interest and taxation, the movement in options and related charges over
non-controlling interests, gain on disposal of available-for-sale investments, legacy
UK retirement benefit scheme expenses, exceptional items and amortisation and
impairment of acquisition related intangible assets.
Excludes the share of joint venture and associates’ interest and taxation, the
movement in options and related charges over non-controlling interests, gain on
disposal of available-for-sale investments, legacy UK retirement benefit scheme
expenses, exceptional items, net interest on pension schemes and amortisation and
Overview
Chairman’s statement
We have delivered on our Nouvelle Confiance plan
and have a strong platform for the future.
We launched Nouvelle Confiance, our
three stage strategic plan to restore
shareholder value, nearly three years
ago and we have successfully executed
all the key components on schedule.
The first stage was to identify and
eliminate the losses at our non core
businesses in Italy, Spain, Turkey and the
Czech Republic and Slovakia to refocus
on our core markets in France, Belgium
and the Netherlands. This process
was completed in July 2014 with the
disposal of Datart in the Czech Republic
and Slovakia.
Having refocused the Group, we set out to
create value from our market leadership
position, drive greater efficiency and
reduce costs and we devised a four point
action plan (the ‘4Ds’) to:
•
•
Drive trading by delivering on promise
to customers;
Digitalise Darty by further enhancing
our multi-channel offer and leading
websites;
•
Develop our brand by improving our
product and market leading service
offerings as well as expanding our
customer base; and
•
Deliver cost efficiencies.
I am pleased with the continued success
we have had and a full account of our
activities and achievements can be
found in the Chief Executive’s review.
The third component of the plan was
to identify future growth opportunities.
We announced last year our initiatives
to expand the Darty portfolio through
a franchise operation, extend our ‘low
price’ offer through the acquisition of
Mistergooddeal.com and a progamme
to increase the number of stores in France
with the kitchen offer. We have been
busy implementing all three programmes
and I am pleased that during the last
year we opened 39 franchise stores,
integrated the Mistergooddeal.com
business into Darty France helping us
increase web generated sales by over
22 per cent and expanded the kitchen
offer by a further 16 stores to 71 stores.
We still have more to do to ensure
growth in shareholder value but we
have a strong platform for the future.
Given the progress we have made,
the Board is recommending a final
dividend of 2.625 cents per share,
bringing the total dividend for the year
to 3.5 cents per share, reflecting our
confidence in our ability to deliver
improved results in the medium term.
Dominic Platt, our Finance Director for
over five years, will be leaving the Group
on 30 June and I would like to thank
him for his valuable contribution to the
business and wish him every success
for the future. His successor Albin
Jacquemont joined the Group in March
and joins the Board as Finance Director
on 18 June. He is already making
a positive impact and I look forward to
working with him over the coming years.
Alan Parker CBE
Chairman
Finally I must thank all our colleagues
across the Group for their hard work
and loyalty, particularly in these difficult
trading times.
“Typically my sales are up by
50–75 per cent every month
so I am very pleased to have
joined the Darty store network.”
Successful franchise operation
Our franchise programme is proving extremely successful and popular with both
the franchisees and their customers.
The store owners are enjoying the benefit of the Darty brand with wider ranges,
access to the full Darty service offer and Darty.com.
We now have over 40 stores in operation and are on track for 100 by 2016/17.
Strategic report
Our markets
We are the third largest specialist
electricals retailer in Europe by sales.
As of 30 April 2015, we continue to hold
leading positions in the markets in which
we operate. In France, we are the market
leader, based on industry reports by
GfK, with a 14.7 per cent share of the
French electricals retail market, with an
additional 0.4 per cent share coming
from the acquisition of Mistergooddeal.
com. In Belgium we have 10 per cent
share of the electricals retail market
and in the Netherlands we have 5.6 per
cent share of the Dutch electricals retail
market. In the Netherlands following
the acquisition of 18 stores from a
competitor we are a leading multi-channel
electricals retailer in the market.
In terms of product categories our
brands tend to have a higher share
in major home and small domestic
appliances than vision, communication
and multi-media product ranges.
France
We believe that our leading brand
position in France, and in our other core
markets, results from a combination
of factors, including our reputation for
quality and convenience, the range and
diversity of our products and our
extensive network of stores situated in
high traffic areas and leading websites.
In France, our primary market, Darty is
the most widely recognised electricals
retail brand (Source: TNS Sofres,
March 2015). It also has a significantly
better image than its competitors for
its stores and sales staff, choice of
products and quality of service.
Our strong brand recognition and the fact
that consumers associate our brand with
choice, service and price competitiveness
are key drivers of consumer interest in
our products, visits to our stores and
websites and our ability to generate
high sales volumes and attractive
margins. Our strong brand recognition
also provides us with a solid platform
to further expand both our product
and service offering and our network
of stores and e-commerce platforms.
Belgium
Market size €17.7 billion
Netherlands
Market share %
2012/13
13.4
2013/14
14.3
2014/15
14.7
2012/13
9.9
2013/14
10.5
2014/15
10.0
2012/13
5.5
2013/14
5.2
2014/15
5.6
Strategic report
Our business model
We are the number one electricals retailer in France, the number two electricals retailer in Belgium and, following
our recent acquisition, we are a leading multi-channel player in the Netherlands, our core markets. We operate
under some of the most highly established brands in our sector. We display, sell, distribute and provide after-sales
support for a wide range of electrical products and associated accessories and services, from major home and small
domestic appliances to the latest vision and audio and telecommunication and multimedia products. We market
and distribute our products through our network of 400 stores and leading websites and mobile applications.
Business model
Strategy
2014/15 progress
Future opportunities
KPIs
Market leading
brands in our core
markets in France,
Belgium and the
Netherlands
Identify and
eliminate losses in
non-core businesses
and strengthen
leadership positions
in core markets
Completed the disposal of Datart in the
Czech Republic and Slovakia
Ongoing review of market
consolidation opportunities
Retail
profit ¤m
Acquired 18 profitable stores in Holland
Successfully opened 39 franchise stores
Further roll-out of the
Franchise model
Number of
franchise
stores
Unrivalled service
offer before, during
and after-sales
Drive trading by
further improving
our value added
service proposition
Trialled and rolled out the successful new
after-sales service initiative ‘Le Bouton’
Continue to assess
opportunities for extended
service offers
LFL sales
Fully integrated
multi-channel
platforms
comprising stores,
websites and mobile
applications
Digitalise Darty by
further enhancing
our websites
and driving web
generated sales
Expanded ‘Click and collect’ offer
Continue to exploit
opportunities from new
technology
Internet
sales
growth
Information screens introduced to
larger stores
Roll-out use of tablets
for staff and in-store WiFi
availability
Webgenerated
sales
Extensive offer of all
electrical products
and accessories with
all major brands
and own-label and
licensed ranges
Develop our brand
by improving our
product offerings
and expanding our
customer base
Integrated Mistergooddeal.com into
the main Darty operation
Further roll-out of the
kitchen offer
Number
of stores
with the
kitchen
offer
Cost effective
operations
Deliver cost
efficiencies by
implementing cost
saving initiatives
Completed ¤50 million cost saving
programme on schedule
Ongoing cost efficiency
with focus on after-sales
service
Retail
profit
margin
Launched same day delivery and after
sales service intervention
Programme to equip staff with
tablets and provide in-store WiFi
Rolled out the kitchen offer to a
further 16 stores
Market
share
A more detailed description of progress made during the year ended 30 April 2015 and our opportunities for growth can be found in the
Chief Executive’s review on pages 9 to 15.
Strategic report
Strategy
In December 2012, we launched our
‘Nouvelle Confiance’ strategic plan, the
principal components of which were to:
•
identify and eliminate losses at our
non-core businesses and refocus on
core markets;
•
•
create value from our market
leadership and efficiency savings; and
identify future growth opportunities.
Following our exit from our businesses
in the UK, Italy, Spain and Turkey, we
completed the elimination of losses in
our non-core markets with the disposal
of our majority shareholding in Datart
in the Czech Republic and Slovakia in
August 2014. We are now totally focused
on our core businesses in France,
Belgium and the Netherlands.
In February 2015, our business in
the Netherlands, BCC, completed the
acquisition of 18 profitable stores from
HiM Retail, strengthening its market
position. The stores geographically
complement the current portfolio and
bring the total number of BCC stores to
75, making it the leading multi-channel
electrical retailer in the market. Most
stores have now been rebranded to BCC
and are showing on average a 15 per cent
sales uplift.
The ‘4Ds’
In order to create value from our market
leadership, drive greater efficiency and
reduce costs, we developed a four-point
plan (‘4Ds’), focusing on our principal
business in France to:
Multi-channel retailing
1
Drive trading by delivering on our
promise to customers;
2
Digitalise Darty by further enhancing
our multi-channel offer and leading
websites;
3
Develop our brand by improving our
product and market-leading service
offerings as well as expanding our
customer base; and
4
Deliver cost efficiency by
implementing cost savings.
I WANT TO BUY A WASHING MACHINE
We want our customers to have a choice
of how to research, buy and receive the
products they want from our stores,
websites and mobile apps.
RESEARCH
E R T A DV I
C
IS
EC
O M PA R
A
W
AN
ONLINE
PC
TABLET
MOBILE
LI
DELIVERY
E
TA K
INSTORE
CE
LLATIO
STA
N
IN
P
AY
OLD AP
INSTORE
CO
LL
TS
CLICK AND
COLLECT
EC
I
N
Being a multi-channel retailer we
can reach more customers outside of
our stores and we make more efficient
use of the infrastructure of our stock,
warehousing and home delivery,
whatever the type of purchase.
IC
E
E
XP
ONLINE
PC
TABLET
MOBILE
N
STORE
PR
Delivery – Home delivery, collect
from our stores or collection points or
take away from the store on purchase.
R CHOIC
IDE
E
W
TO
EE
H
UC
S
Buy – online, in-store or on the phone
via our call centres.
O
Research – online from PCs, laptops,
tablets and mobile phones or in-store.
TIO N P O
“A new after-sales service
initiative ‘Le Bouton’ was
launched in October offering
customers immediate support
at the touch of a button.”
Darty brand development
This year we celebrated 40 years of the famous ‘Contrat de
Confiance’, Darty’s price, choice and service promise to its
customers. We took the opportunity to evolve this long heritage
for service and modernised the brand’s image in keeping with
the changing expectations of our customers and to raise our
awareness even further.
We have introduced a number of initiatives including instore
Wifi availability, a very contemporary and widespread marketing
campaign, a series of instore events and ‘Le Bouton’.
Strategic report
Chief Executive’s review
Across the Group we delivered on new initiatives to
improve our multi-channel proposition which led to
market share gains in France and the Netherlands.
The ‘4Ds’
1
Drive trading
In a market that saw a small decline in
France over the year we delivered further
market share gains, kept footfall stable
and improved our store conversion rate.
During the period Darty held a number of
events to drive trading. A successful
World Cup campaign helped deliver
strong vision sales during May and June
and the July Sale received a positive
response from customers. The ‘Back to
school’ campaign run from late August
through September, delivered sales below
expectation due to limited stock and the
January Sale was impacted by events in
Paris at the beginning of the month. We
supported these campaigns by weekly
monitoring of our instore and online
prices to confirm our competitiveness.
On a ‘service included’ basis we continue
to compare very favourably against all
store based retailers and all web pure
players and we have recovered our
number one position in the TNS Sofres
survey. In addition, during the year we
celebrated 40 years of ‘Contrat du
Confiance’, our price, choice and service
promise to our customers, and we took
the opportunity to simplify and modernise
the Contrat providing us with a unique
marketing platform.
As part of the Darty service offer,
delivery, installation and after-sales
service have historically been included
for free with the majority of product
purchases. A premium ‘paid for’ delivery
is now available for specific two hour time
slots from 7am to 9am, and 5pm to 9pm
and ‘Chronopost’ next day delivery if
ordered by 1pm for non-bulky items.
In March we enhanced the service offer
with ‘paid for’ same day delivery for large
appliances in the Paris and Lyon regions,
if ordered before 4pm and delivered by
9pm, and in Paris same day after-sales
service intervention if contacted by 4pm.
As a result we have regained the leading
position in home delivery and extended
our lead against all our competitors for
after-sales service (source: TNS survey).
After the end of the financial year we
launched a new Store card, ‘Carte de
credit connectée’, with the objective
of providing customers with greater
value beyond purely a financing
solution. For a ¤15 annual fee, which
is subsequently refunded in Darty
vouchers, customers receive a Visa
debit/credit card which is also a loyalty
card. Every time a customer uses the card
to complete three transactions worth
over ¤50 each at Darty they will be given
a ¤10 gift card. Additional benefits include
free subscription to ‘Le Bouton’, our
new 24/7 after-sales service initiative
launched last year, special offers on
products, VIP shopping evenings and
access to flexible financing offers and
free credit.
2
Digitalise Darty
As a successful multi-channel retailer,
we continue to develop a seamless
approach between our websites and
stores. During the period we continued
the programme of digitalising the
store network which includes free WiFi,
equipping sales staff with tablets to
demonstrate products and provide price
and availability and large display screens.
By the end of the financial year we had
digitalised 64 stores including two
franchises, with over 1200 tablets being
utilised by staff, and we had over 340
screens across 30 stores. Throughout
the year we saw an improvement in the
level of sales made utilising a tablet to
14 per cent of store sales, with the
best stores approaching 40 per cent.
We plan to digitalise a further 60 stores
during 2015/16.
Régis Schultz
Chief Executive
Visits to Darty.com grew over 22 per cent
for the year to over 160 million and
towards the end of the period the website
was refreshed to improve its look, feel
and content, making it more modern,
clear and user friendly.
“This year in France we
achieved a 22 per cent
uplift in web generated
sales bringing web
penetration to over
17 per cent of total
products sales.”
Online growth
We have successfully grown our online business with a 22 per cent
increase in web generated sales. The acquisition last year of
Mistergooddeal.com is enabling us to offer a wider choice of
price-entry products, attracting a more diverse customer base.
We have integrated the business into Darty, utilising our
infrastructure and creating greater cost efficiencies.
Strategic report
20
PER CENT
penetration of Click and collect
increased to 20 per cent of
total web sales.
During the year we saw significant
increases in penetration of our ‘Click and
collect’ service, where customers can
reserve online and collect an hour later
from their chosen store, or from a Click
and collect locker in certain high traffic
stores. Penetration of Click and collect
increased by 540 basis points to 20 per
cent of web sales, with penetration
reaching 30 per cent in the peak trading
month of December compared to just
over 20 per cent the prior year.
3
Develop our brand
Building on Darty’s long heritage for
service and its famous ‘Contrat de
Confiance’, a new initiative, ‘Le Bouton’,
was launched nationwide in October.
By pushing a dedicated wireless ‘button’
or via a mobile app, customers can make
direct contact with Darty’s market leading
after-sales service support, 24 hours a
day, seven days a week. We aim for a
service assistant to call the customer
back within two minutes to assess
and solve the problem either over the
phone or by a subsequent home visit.
The service is available for all electrical
products but for those not originally
bought from Darty or out of warranty
there is a charge for any repairs required.
The service is available for a small
monthly subscription of ¤3/month, or
¤8/month including multimedia products,
plus ¤25 for the wireless button. Over
35,000 buttons had been issued by the
end of the year, including six, 12 or 24
month subscription bundled with an
extended warranty purchase. Our
intention is to fully integrate the button
into the extended warranty offer.
As market leader in France we
continue to receive support from
leading manufacturers in gaining access
to exclusive products, with particular
emphasis on being ‘first to market’ for
new products. During the period this was
evidenced by significant sales of large
screen OLED and Ultra HD/4K televisions,
particularly ahead of the football World
Cup in May and June. Increasingly
connected products and dedicated areas
in-store and online are being introduced
into the offer for both the home and
health, such as connected security,
lighting, thermostats and fitness trackers.
As recognition for the recent progress
we have made with the brand, our net
promoter score increased over the second
half of the year. We also won a number
of awards during the year including one
from LSA for our ‘Click & Collect’ service,
the ‘Nuit des Rois’ digital marketing award
for ‘Le Bouton’ and the ‘IREF Satisfactions
Clients’ award for the electricals sector.
In addition, we have seen improving
colleague engagement through our
annual staff opinion survey.
“Over the last year in
France we have recorded
73 million visits to our
stores and over 165 million
visits to our websites.
Customer information
is gathered to provide
a database for more
specific and tailored
marketing purposes.”
Improved customer offer
We continually improve our offer to build customer loyalty and increase web
and store traffic to keep one step ahead of the competition with a seamless
approach between our websites and stores.
We are a true multi-channel retailer. Our customers can research for a product
online or in our stores; buy online, in-store or by phone; and then obtain their
product via either home delivery, collect from our stores or collection points
or takeaway from our stores on purchase.
Strategic report
We are focused on building on our achievements
to date by investing in our customer proposition,
reducing the cost base and delivering improved
profitability through our growth initiatives.
4
Deliver cost efficiency
Throughout the Group, we had targeted
annual gross cost savings over three
years of ¤50 million per annum by
2015/16, from delivering a more efficient
operating model, continuing to adapt our
cost structure and leveraging synergies
between our operating companies. To
accelerate the achievement of the savings
by 2014/15, a social plan was implemented
in France last year and proceeded as
planned. ¤30 million of benefits were
achieved over the prior two years with the
final benefit of ¤20 million achieved in full
this financial year. Total Group underlying
costs (excluding the Mistergooddeal.com
acquisition) were down over 2 per cent
(¤27 million) despite incremental costs
related to our increased store activity.
While this major programme has now
been completed, we continue to work
on all opportunities to improve cost
efficiency in the business, with a
particular focus in France in 2015/16 on
the after-sales service infrastructure and
increasing ‘Click and collect’ penetration
to further reduce home delivery costs.
We also continue to manage our freehold
property to ensure maximum value to the
Group. Following over ¤45 million of total
proceeds in the prior two years, ¤13.9 million
was delivered this financial year, with a
similar amount expected in 2015/16.
Growth initiatives
In 2013 we identified and introduced
initiatives to help secure our future
growth, including:
•
expanding the Darty portfolio into
smaller catchment areas with the
opening of franchise stores;
•
extending our low price/pay-as-you-go
services offer through the
Mistergooddeal.com channel; and
•
Franchise stores
Darty is the market leader in France
with 70 per cent of consumers within
a 30-minute drive time of a store.
The remaining 30 per cent of consumers
represent an opportunity to further
exploit the existing infrastructure of
our multi-channel offer. Typically
these consumers will reside in smaller
catchment areas, usually below 100,000
inhabitants where it is uneconomic to
open a typical Darty store. To address
these smaller catchment areas we
established a franchise operation
last financial year.
The independent owner invests to
refurbish their own store to a Darty
store, consistent in terms of both
branding and offer with the rest of
the store portfolio. We charge the
franchisee for the supply of product
ranges and provision of home delivery
and after-sales services. A franchise
fee is also charged for use of the brand
and marketing support.
70
PER CENT
of consumers are within
a 30-minute drive time
of a Darty store.
At the end of the financial year we
had opened 43 stores including four
overseas. Performance has been
encouraging with significant sales uplifts
and a net promoter score above the Darty
average. We expect to open around
25 additional stores in 2015/16, bringing
the total to around 70 stores.
a programme to increase the number of
stores in France with the kitchen offer.
“The service and quality of
Darty Kitchens is excellent.
The price is good and the
after-sales service and
installation is very efficient
and smooth.”
Strong kitchens offer
Thanks to improving the density of our merchandising in all other
product categories, we now offer our bespoke kitchen range and
service in over 70 stores, making sure we are capitalising on this
fast growing area of the market.
Our medium term aim for the offer to be in 120 stores, in all
catchments of over 200,000 inhabitants, is well on track.
Strategic report
Mistergooddeal.com
To increase Darty’s share of the fast
growing market for an entry price
offer, we acquired Mistergooddeal.com
towards the end of the last financial year.
Mistergooddeal.com is a leading French
electricals website, predominantly in
white goods at the price entry end of
the market, with no service included.
We have retained the brand name and
are extending the product offer with the
introduction of our own label brands.
Darty’s existing service infrastructure is
now being used to offer Mistergooddeal.
com customers additional services on a
pay-as-you-go basis, with home delivery
being offered from October and all
suitable Darty stores can now be used
as customer collection points.
Initial trading was weaker than expected
due to very competitive activity in the
entry price end of the market. With a new
management team in place from October
2014 we deepened and accelerated the
integration of the business into the main
Darty operation to help speed up and
deliver further cost savings. The head
office was integrated in January 2015
followed by the IT and warehousing in
April 2015. A new look website was
launched at the end of the year, on
Darty’s IT platform. We also made
changes to the product offer, exiting
non-core categories such as furniture and
extending small domestic appliance and
vision ranges. The retail loss for 2014/15
was ¤7.7 million but with the actions being
taken commercially and particularly on
the cost base, we expect to approach
breakeven for 2015/16.
Kitchens
Our kitchens business in France is an
example of our ability to continually
develop the Darty brand further, and
move into a new, related product area,
build a relevant market position and
drive profitability. The kitchen market
has solid fundamentals with the fitted
kitchen equipment rate in France being
only 62 per cent compared to a European
average of around 80 per cent and a
growing electricals built-in market. At the
same time, competitors are consolidating
and, as Darty builds scale, consumer
recognition of our kitchens offer is
consistently improving year-on-year.
As a result of increasing the density
of merchandising in other product
categories, we are now able to install
the kitchen offer in smaller stores in
the portfolio. We now have 71 stores with
the offer generating over €80 million of
revenue. Commercial initiatives during
the year included interest free credit
offers as well as a partnership with
house builder, Bouygues Immobilier for
customers to select a Darty kitchen to
be installed in their new property.
Given the acceleration of openings in
the year, the time to reach maturity and
pre-opening costs incurred ahead of the
initial customer orders, a loss was made
in 2014/15 of ¤4 million. At the end of the
period a new catalogue was launched in
print and online, featuring 32 different
kitchen models, supported by a TV
campaign from early May. With a further
13 stores planned to have the offer in
2015/16, together with changes to the
management team, infrastructure and
planned productivity improvements,
we expect to move to profitability in
the current financial year.
16
FURTHER STORES
expanded the kitchen offer into
16 further stores increasing the
total to 71 stores.
Outlook
Whilst we have started to see signs of
improvement in consumer confidence,
the product cycle will continue to have
an impact on our markets which are
expected to remain challenging. We are
focused on building on what we have
achieved through Nouvelle Confiance by
investing in our customer proposition in
all our businesses, reducing the cost base
and delivering improved profitability.
Régis Schultz
Chief Executive
“We now have 75 stores in the
BCC chain and have become a
leading multi-channel electrical
retailer in the market.”
Expansion in the Netherlands
Our business in the Netherlands, BCC, has seen much better results
recently and we have driven this further forward with the acquisition
of 18 profitable stores from a competitor.
All these stores geographically complement the existing portfolio.
They have already been refitted and branded as BCC and are
leveraging the existing store and after-sales service support
infrastructure in the Netherlands.
Strategic report
Operating review
18
NEW STORES
We acquired 18 profitable stores
in the Netherlands making us the
leading multi-channel retailer in
that market.
France
Total revenue was up 3.5 per cent
including Mistergooddeal.com and the
franchise business and the Darty brand
again outperformed the market for
the period. Like-for-like sales fell
2.0 per cent with trading up against
strong comparatives from the prior
year (like-for-like sales up 2.8 per cent),
particularly in the second half.
We saw continued strong growth in
communications and white goods were
also positive. The rate of decline in vision
slowed significantly, with growth in May
and June reflecting a successful football
World Cup campaign with strong sales of
new technologies (OLED and Ultra HD)
and large screen sizes. We saw a fall in
multimedia due to declining volumes and
average selling prices for tablets and a
poor digital camera market.
Overall web-generated sales continued
to grow, albeit in a slower market,
to over 15 per cent of total product
sales, and to over 17 per cent including
Mistergooddeal.com. Click and collect
at Darty.com was increasingly popular
with customers, rising over 40 per
cent to 20 per cent of web sales.
Underlying gross margin was down
around 90 basis points reflecting
competitive French market conditions not
fully offset by an improving product mix.
Overall gross margin for France was down
around 180 basis points after taking
account of the lower margin franchise and
Mistergooddeal.com operations which
had an impact on gross margin of
70 and 20 basis points, respectively.
Underlying total costs (excluding
Mistergooddeal.com) reduced by
¤25 million, 3 per cent, reflecting the
benefit of the cost programme
implemented last year. Total costs
were broadly flat.
from a competitor completed in February,
with the majority of stores converted to
BCC by the year end. The acquired stores
accounted for ¤8.0 million revenue in
2014/15 and are expected to contribute
around ¤45 million revenue in 2015/16.
Retail profit was ¤70.0 million compared
to ¤87.2 million in the prior year. This
included ¤7.7 million (2014: ¤0.9 million)
retail loss for Mistergooddeal.com, a loss
of around €4 million for the kitchen
business, and a break-even performance
from the franchise operation.
Earlier in the period Vanden Borre
focused trading on margin in a more
promotional market with, inevitably, some
impact on revenue against a strong
performance last year. The like-for-like
sales trend improved in the second half of
the year and web sales saw strong growth
following the introduction of ‘next’ and
‘same day’ delivery.
During the period five stores were opened,
six closed, five relocated, three extended
and three rightsized or refurbished. We
also opened 39 franchise stores and
added the kitchen offer to 16 additional
stores. Plans for 2015/16 are for six
relocations, five refurbishments and four
rightsizings. We expect to open around
25 more franchise stores and introduce
the kitchen offer to a further 13 stores.
At Vanden Borre in Belgium and BCC
in the Netherlands overall revenue was
up 1.7 per cent, and down 0.3 per cent
on a like-for-like basis. Web-generated
sales continued to grow strongly, up over
20 per cent, to over 13 per cent of total
product sales, with Click and collect
sales up 10 per cent to over 27 per cent
of web sales.
Overall gross margin saw a small
improvement of 20 basis points, with
total costs flat. Retail profit improved to
¤14.8 million compared to ¤9.3 million in
the prior year with a strong reduction in
losses at BCC, even after incurring some
acquired stores integration costs, and a
further growth in profits at Vanden Borre.
Excluding the acquired stores there
was one store closure at BCC and one
new store opening at Vanden Borre.
For 2015/16 we plan to close one store
at BCC and open one at Vanden Borre.
With a new local management team in
place, BCC saw a continued improvement
in performance, first seen at the end of
last year. We saw positive like-for-like
sales in store and particularly on the web,
market share gains in all major product
categories and an improved gross margin.
The acquisition of 18 profitable stores
Strategic report
Financial review
Group revenue, including Mistergooddeal.com
and the franchise operation, increased by
over three per cent to €3,512.1 million.
Revenue and retail profit
Group revenue at ¤3,512.1 million, was
up 3.2 per cent including Mistergooddeal.
com and the franchise stores. On a
like-for-like basis Group revenue was
down 1.6 per cent, with slower second
and third quarters against much stronger
comparatives from the prior year. In terms
of product categories we saw continued
strong growth in communications and
white goods was also positive. The rate
of decline in vision slowed significantly,
with growth in May and June reflecting
a successful football World Cup campaign
with strong sales of new technologies
(OLED and Ultra HD) and large screen
sizes. We saw a significant fall in
multimedia due to declining volumes
and average selling prices for tablets
and a poor digital camera market.
Our web-generated sales continued to
grow and including Mistergooddeal.com
were up over 22 per cent, now representing
over 16 per cent of total product sales.
Click and collect was increasingly
popular with customers and represented
over 24 per cent of all web sales.
Dominic Platt
Finance Director
Underlying gross margin declined by
around 80 basis points for the period
where we started to see some benefit
from an improving product mix, but was
insufficient to off-set ongoing product
category margin pressure in challenging
and promotional market conditions. After
taking into account the business mix effect
of the lower margin Mistergooddeal.com
and franchise operations, total gross
margin was down 150 basis points.
Underlying costs, excluding
Mistergooddeal.com, were down
¤27 million, over 2 per cent, reflecting
the benefits of our cost savings
programme in France. Total costs including
Mistergooddeal.com were broadly flat.
Group retail profit was ¤74.9 million
compared to ¤85.5 million for the same
period last year, including losses of
¤7.7 million from Mistergooddeal.com
(2014: Retail loss ¤0.9m), an improvement
in Belgium and the Netherlands from
¤9.3 million to ¤14.8 million and a
reduction in head office costs from
¤11.0 million to ¤9.9 million.
Exceptional items
Exceptional items totalled ¤13.7 million
(2014: ¤29.4 million). ¤14.5 million related
to property charges and impairment
costs in France, mainly as a result of a
programme to improve store portfolio
performance. ¤7.1 million related to
reorganisation costs associated with
integrating Mistergooddeal.com into the
Darty business (¤4.8 million) and other
reorganisation costs mainly relating to
the transfer of some head office functions
from London to Paris (¤2.3 million).
In addition, there was a ¤7.9 million
exceptional gain (¤6.4 million in France
and ¤1.5 million in Belgium and the
Netherlands) arising following the review
of absorption of distribution costs into
the carrying value of inventory.
Operating profit
Operating profit was ¤60.3 million (2014:
¤53.4 million) with reduced exceptional
charges off-setting a decline in retail profit.
Net finance costs
The net finance costs were ¤23.6 million
(2014: ¤13.4 million) excluding IAS 19
pension interest of ¤3.8 million (2014:
¤2.6 million). The net finance cost
increase reflects the full year impact of the
refinancing of the Group in February 2014.
Adjusted profit before tax
The adjusted profit before tax was
¤51.3 million (2014: ¤72.1 million).
Taxation
The effective tax rate for the
Continuing Group on adjusted profit
before exceptional items, including the
share of joint venture and associates’ tax
was 23.2 per cent (2014: 44.4 per cent)
and including the CVAE reclassification
of €10.7 million (2014: €11.1 million)
from operating profit to taxation was
39.3 per cent (2014: 52.6 per cent).
The decrease in tax rate from 2014 is
due primarily to lower French group
profits which being taxed at a higher rate
than the group tax rate has a beneficial
impact on the group tax rate. This impact
is partially offset by an improved
performance in the Netherlands
where tax credits are not currently
recognised on losses.
The Company has received a demand
from the French Tax Authority, claiming
up to €15.3 million in unpaid taxes and
penalties relating to the Group’s holding
company structure. Extensive
professional advice has been obtained
and the Company believes it has a very
strong defence and much of the claim is
without merit. A provision has been made
based on our best estimate of the
expected outcome.
Based on a total charge of €18.7 million
(2014: €27.4 million) the total tax rate
is 55.3 per cent (2014: 71.7 per cent) on
unadjusted profits, reflecting that tax
relief is not recognised on all exceptional
and other non-retail profit items. The
effective tax rate for the continuing Group
on adjusted profit before exceptional
items, including the share of joint venture
and associates’ tax is expected to be
mid 30s per cent in 2015/16 including
the CVAE charge of around €11 million.
Profit for the period
The profit for the period from continuing
operations increased to ¤15.1 million
(2014: ¤10.8 million). Loss for the period
from discontinued operations reduced
to €1.3 million (2014: loss ¤17.4 million).
Total profit for the period increased to
¤13.8 million (2014: loss ¤6.6 million).
Earnings per share
Adjusted earnings per share, excluding
the IAS 19 net interest on pension
schemes, was 5.8 cents (2014: 6.5 cents).
Continuing basic and diluted earnings
per share was 2.9 cents (2014: 2.1 cents).
Cash flow
Cash generated from operations was
€60.7 million (2014: €18.4 million)
principally as a result of a reduction in
cash outflows related to discontinued
operations. Net capital expenditure
was €36.8 million (2014: €32.2 million),
reflecting lower proceeds from property
disposals of €13.9 million (2014: €29.7
million). Proceeds from the sale of
operations relating to the sale of
Darty Turkey and Datart was €10.1 million.
Cash costs of acquisitions mainly for
stores at BCC in the Netherlands was
€9.8 million. Interest paid was €22.9
million (2014: €21.4 million) and tax paid
was €21.2 million (2014: €9.9 million)
reflecting phasing of payments in France.
The dividend payment remained
unchanged at 3.5 cents per share, but
the strengthening of sterling against
the euro for shareholders electing a
sterling dividend payment increased the
cash payment to €18.4 million (2014:
€18.0 million).
Net cash outflow from continuing
operations was €30.9 million (2014: net
cash inflow €18.0 million). Net cash outflow
from the discontinued operations was
€5.6 million (2014: €57.5 million). Total net
cash outflow was €36.5 million (2014:
€39.5 million).
Net debt
Closing net debt was ¤223.8 million
compared to ¤185.2 million on 30 April
2014. As at 30 April 2015, ¤57 million
was drawn under the Group’s committed
facilities (30 April 2014: ¤20 million)
in addition to the Group’s ¤250 million
High Yield Bond.
Retirement benefit obligations
The IAS 19 net pension liability was
¤103.4 million (2014: ¤104.6 million), split
¤38.2 million (2014: ¤60.1 million) in the
UK and €65.2 million (2014: ¤44.5 million)
in France. The movement in the UK net
liability benefitted from the performance
of the assets outstripping liabilities. The
deficit of the UK scheme in sterling was
£27.9 million.
Balance sheet
Following the disposal and closure of
discontinued operations from 2012
onwards including Comet, Darty Italy,
Darty Spain and Darty Turkey and
exceptional items from recent
restructuring, we have reported net
liabilities. At 30 April 2015 net liabilities
totalled ¤323.9 million (2014: ¤316.9
million). Under our accounting policies,
freehold property is carried at cost.
Our freehold property portfolio in
France, representing in the main around
one third of the store portfolio, has a
carrying value of ¤102 million, compared
with a market valuation of approximately
¤350 million. In addition we carry no
internally generated goodwill for our
market leading brands.
Dividends
The Board is recommending an
unchanged final dividend of 2.625 cents
per share. The ex-dividend date will
be 22 October 2015, the record date
will be 23 October 2015 and the payment
date will be 13 November 2015.
Financial presentation
Datart has been reclassified as a
discontinued operation following the
signature of a sale and purchase
agreement with SEW-1001 a.s. to sell
the Group’s 60 per cent shareholding on
22 July 2014. The prior year comparatives
have been restated accordingly.
Two accounting treatments are possible
for the business tax, CVAE (Cotisation sur
la Valeur Ajoutée des Entreprises) – either
as an operating expense or as income
tax. In line with the treatment adopted
by French retail listed peers the decision
has been taken to reclassify from an
operational expense in the retail profit of
the France reported segment, to income
tax. CVAE was ¤10.7 million for the year
ended 30 April 2015 (2014: ¤11.1 million).
In addition, having reviewed possible
treatments under IAS19 Revised,
retirement benefit scheme expenses of
¤1.3 million (2014: ¤1.4 million) relating
to the legacy UK pension scheme have
been reclassified from finance costs
to operating profit in line with most
common practice. These costs have
been reclassified as an operating cost,
outside of retail profit, as they relate
to Comet, a discontinued business.
The increase in the net liability in the
French schemes mainly reflects a fall
in corporate bond yields. The cash cost
of the UK scheme was ¤12.9 million and
the French scheme was ¤0.9 million.
Strategic report
Financial review
Key performance indicators
Definition/source
Sales:
Total revenue growth
2015: 3.2%
2014: 0.8%1
Like-for-like sales growth
Like-for-like sales are calculated based on stores that have been open for a full year
and the first full four weeks of trading have passed. Stores where retail space has
been added or where a complete format redesign (including addition of a mezzanine
floor) has taken place, which involves material capital expenditure are excluded
from like-for-like sales calculations. Sales through internet sites are included.
2015: (1.6)%
2014: 1.9%1
Internet sales growth
Percentage increase in web-generated sales.
2015: 22.2%
2014: 12.2%1
Multi-channel sales
Web-generated sales as a percentage of total product sales.
2015: 16.1%
2014: 14.3%1
Retail profit
Retail profit represents continuing Group total operating profit before the share
of joint venture and associates’ interest and taxation, movement in options and
related charges over non- controlling interests, impairment of available-for-sale
financial assets, exceptional costs and amortisation and impairment of acquisition
related intangible assets.
2015: €74.9m
2014: €85.5m1
Retail profit margin
Retail profit as a percentage of total revenue.
2015: 2.1%
2014: 2.5%1
Adjusted earnings per share
Excludes the effects of movement in options and related charges over
non-controlling interests, realised losses on available-for-sale financial assets,
exceptional costs, exceptional finance costs, tax effects of exceptional items,
discontinued operations and amortisation of acquisition related intangible assets.
2015: 5.8 cents
2014: 6.5 cents1
Free retail cash flow
Free cash flow is defined as cash generated from operations and net sale of business
operations and subsidiary less net capital expenditure and investments.
2015: €25.6m
2014: (€1.2)m
Non-financial:
Market share
Share of the total electricals market in each country (source: GfK).
France
2014: 14.3%
2015: 14.7%
Franchise stores
Number of Darty franchise stores.
2014: 4
2015: 43
Kitchens
Number of Darty stores with a kitchen offer.
2014: 55
2015: 71
Profitability:
Cash flow:
1
Performance
Belgium
Netherlands
2014: 10.5% 2014: 5.2%
2015: 10.0% 2015: 5.6%
Restated following the sale of Datart, now classified as discontinued operations, the CVAE reclassification from operating profit to taxation and the legacy UK retirement benefit
scheme expenses from finance costs to operating profit.
The Group manages its performance using these key performance indicators in place at a Group and business level.
Prior year KPIs have been restated for the new continuing Group to ensure like-for-like comparison.
The Group also has a set of non-financial KPIs; details of these are set out in the Corporate responsibility report on pages 23 to 27.
Dominic Platt
Finance Director
Strategic report
Principal risks
The taking of risk is an inherent part of doing business and the skill in business is to manage risk effectively.
The Board and senior management have invested time to identify and assess the key risks facing the business
and actively manages those risks. Risk management is performed from both a top-down and a bottom-up
perspective, ensuring that strategic and operational risks are appropriately addressed.
The principal risks and uncertainties to delivering our strategy are set out below together with an illustration of what actions are
being taken to mitigate the effect of those risks on the business and its customers.
Risk
Legislative and regulatory risks
The Group’s operations are subject to
extensive regulatory requirements,
particularly in relation to its buying
and selling products and after-sales
services, its advertising, marketing
and sales practices, its employment
and pensions policies and planning and
environmental issues. Changes in laws
and regulations and their enforcement
may adversely impact the Group’s
operations in terms of costs, changes to
business practices, and restrictions on
activities. The Group’s businesses may
also be adversely affected by changes
in tax laws and increasing reviews by tax
authorities of corporate tax plans.
Economic environment
The economic environment can
influence the level of consumer
expenditure on electrical goods in a
number of ways. It can also affect the
level of promotional activity in the
market, which impacts prices and
margins. Other economic factors that
may adversely affect sales include
interest rates, government economic
policy and levels of personal debt.
Deteriorating market conditions could
adversely impact profitability and cash
generation, and delay the delivery of
growth in our core businesses.
Actions taken
Actions to be taken
Potential changes to legislation and regulatory
requirements are monitored with the help of
external advisers, and the business model and
processes have been adapted to seek to
minimise the impact of these changes.
Briefing sessions for key executives
on the likely impact of legislative and
regulatory change so there is sufficient
time to develop action plans to mitigate
any adverse effects.
Have sought to ensure governmental and
regulatory bodies understand the impact of
current and proposed legislation on both the
business and its customers.
Continue to ensure legislators and
regulators are aware of the potential
impact of their policies.
Implemented packages for our customers,
providing them with a wider range of services,
not only repair services but also assistance in
usage such as our Pack Serenity multimedia
assistance service and ‘Le Bouton’.
Further development of additional
service packages for our customers.
The implementation of the ‘4Ds’ strategy has
improved store footfall. Launched initiatives
such as Darty Days, ‘Les Immediats’ and digital
stores to improve trading.
Continued roll-out of the ‘4Ds’ strategy.
Offset some of the adverse effects by trading
across a number of categories, as well as by
further introducing new channels such as
franchising.
Continued roll-out of the franchising
initiative.
Acquired Mistergooddeal.com to help
address the increased demand for lower
quartile products.
Review of the store portfolio with a view
to relocating poorly located stores.
Further integration of Mistergooddeal.
com into Darty France.
Seek solutions to ensure all businesses
are more profitable.
By taking corporate action, the losses incurred
in Italy, Spain, Turkey and the Czech Republic
and Slovakia have been eliminated. Losses in
the Netherlands have been reduced.
Completed a refinancing of the Group’s debt
facilities to secure long-term funding to support
our future growth plans.
Continued to explore ways to improve our
cash generation.
Organisational and business change
There are a large number of
initiatives across the Group following
implementation of the strategic review
that could disrupt the business. The
implementation of all of the initiatives
may be delayed or hindered by a complex
regulatory environment, social unrest
and project management issues.
Implemented improved change and project
management processes.
Improve prioritising of initiatives.
Improved internal communications.
Ongoing dialogue with employees and unions.
Strategic report
Principal risks
Risk
Actions taken
Actions to be taken
A number of IT projects are planned to
replace large legacy applications built
for individual operating companies. If not
properly planned and implemented, there
could be significant interruption to the
business and additional costs could arise.
IT Project Committee established.
Enhance change management to prepare
staff and processes for organisation and
systems changes.
The reliance on IT systems means the
business can be severely adversely
impacted if they fail.
Reviewed robustness of current protections
for customer personal data.
Continued monitoring and where
necessary, altering systems and
protections to meet changing threats.
Protected margins, as far as possible,
through buying arrangements and by
maintaining an efficient sourcing operation.
Continued development of additional
OEM, exclusive and licensed products.
Information technology
Plan put in place to prioritise removal of
old applications.
Tested recovery plans across our business.
Plans to improve emergency and
disaster recovery plans.
The increased use of online payments and
credit card payments has increased the
risk of the loss of personal data.
Profit and cash
The level of profit margin in electrical
retailing is significantly less than that
of many other retailers and is largely
determined by the market, consumer
demand, manufacturer supply, competition
and government regulations.
Industry practice has heightened the focus
on supplier relationships and potential
impact on financial reporting.
Reputational risks
The Group’s success is dependent,
in part, upon the strength of the
Group’s brands and their reputation.
The Group operates in an industry where
integrity, customer trust and confidence
are important and any adverse publicity
concerning corporate behaviour, policies
and strategies could damage that
customer trust and damage the Group’s
reputation and brands.
Pension scheme liabilities
Following the sale of Comet, the UK
defined benefit scheme for Comet
employees was retained by the Group.
There is a smaller defined benefit scheme
in France for senior Darty employees.
Both schemes are currently in deficit.
These deficits are volatile as a result of
changes in the assumptions regarding
life expectancy, discount rates (based
on gilt yields and company covenant),
inflation and future salary increases, risks
regarding the value of investments and
the returns derived from such investments.
Adverse movements in these assumptions
could increase the deficit, increasing the
funding requirement to the schemes
from the Group.
Reviews have been made regarding
revenue recognition and collectability
of supplier rebates.
Cost structures have been actively managed
in order to mitigate the impact of product
margin erosion and increased improvement
in working capital management.
Take legal action to protect our position
where necessary.
Cost mitigation plans will continue to
be implemented and focus on working
capital management.
A number of internal controls and
processes have been put in place to try
to limit the number and harmful effect
of such incidents.
Regular reviews of the likely threats to
reputation, together with monitoring
of the media, including social media.
A number of deficit mitigation measures
have been undertaken, and will be taken
in the future, to reduce both the size of
the deficit and its volatility.
Continue to examine strategies and
additional opportunities to mitigate
the deficit in both the UK and France.
Triennial valuation agreed in the UK.
Strategic report
Corporate responsibility
As a specialist electrical retailer Darty is well placed
to manage an effective approach to corporate
responsibility (CR) that is compatible with profitable
growth and enhances brand equity.
It has long been our belief that good CR
practice makes sound financial sense.
However, a ‘one size fits all’ approach is
not appropriate because of the different
sizes of our businesses. Therefore the
majority of our activities are locally
driven, reflecting customer demands and
market sensitivities. However, there is a
CR team comprising senior managers
from each of the businesses. Chaired by
the Company Secretary, the team meets
to share best practices and develop
practical performance measures that can
be adopted across the Group.
Our initiatives fall into four key areas:
Environment
Improving the Group’s use of energy,
the impact of our transport fleet and
our use of bulk materials such as paper
and packaging, by minimising waste,
increasing energy efficiency and reducing
our consumption of materials.
Supply chain
Improving labour, environmental and
social practices in the Group’s supply
chain as well as ensuring that our
suppliers and business partners are made
aware of our requirements and take all
reasonable steps to ensure they are met.
People
Providing a working environment that
is conducive to the recruitment and
retention of the widest possible range of
talented staff; and offering them a safe
and healthy place of work – we aim to be
recognised as a good employer seeking
to reward people fairly and to provide
equality of opportunity, personal
development and training.
Communities
Working for our customers and local
communities, contributing to community
activities in the areas we serve; and
supporting and encouraging staff fundraising
for appropriate charitable organisations.
This financial year, Darty France launched
a simulator for energy savings accessible
on the Darty.com site to allow customers
to estimate the energy consumption of
their devices and evaluate the savings
if they opt for their replacement.
Environment
As an electrical retailer we have a
relatively low direct environmental
impact, but we still seek to minimise
the environmental impact of all our
operations throughout the Group. We also
want to ensure that neither our products
nor our operations adversely affect the
health of our customers, our employees
or the community at large.
A major Group strength, with our significant
home delivery network, is our ability to
facilitate the recycling of large white goods,
helped by our efficient ‘reverse logistics’
capability. The ongoing rapid development
of new technology creates increasing high
levels of hazardous electronic and electrical
waste, which is the background for the
WEEE Directive. Its aim is to minimise the
impact of electrical and electronic equipment
on the environment when those products
eventually become waste. In order to sell
products within the EU manufacturers
must demonstrate compliance with the
regulations. This means that electrical
retailers must offer take back facilities
to cover all categories including smaller
appliances such as kettles and microwaves.
As one of Europe’s market leaders in
large white goods, we specialise in
offering our customers specific advice
on the energy efficiency of our ranges.
This enables them to make informed
buying decisions in terms of power
and water consumption. We also offer
practical advice in-store and on the web
on how to use the products in the most
efficient way and we help dispose of
them at the end of their lives.
This programme is tailored to each of our
markets and is currently in its most advanced
stages of implementation at Darty in France
and has been, in part, adopted across all
the Group. We were one of the first retailers
to test the energy efficiency of all televisions,
DVD players and computers that we sell
and then promote the better performing
products. Darty France has a dedicated
section on its website, Darty.com, on
environmental matters. Since September
2012, practical advice is given to customers
to help them calculate their energy and
water consumption on over 1,000 products
including refrigerators, washing machines,
dishwashers and TVs. This was extended to
tumble dryers and wine coolers during 2013.
The newer A++ brands use up to 44 per
cent less energy than products sold 10
years ago. While hand washing the dishes
can use up to 50 litres of water, a modern
dishwasher uses just 13 litres, and some
models use just six litres.
Darty France offers to take away two
items for recycling free of charge if it
makes a home delivery for large white
goods. The collected items are sorted
in 72 collection sites where they are
dismantled. In the 12 months to December
2014, Darty France collected 40,675
tonnes of product for recycling, the
equivalent of over 1.19 million appliances.
These were recycled into 21,182 tonnes
of scrap metal, 6,130 tonnes of plastic
and 3,100 tonnes of glass and similar
items and saved 26,405 tonnes of
CO2 emissions, and achieved a similar
performance in 2013.
Strategic report
All the stores in Darty France have
dedicated recycling bins with separate
compartments for mobile phones, small
appliances, batteries, and ink cartridges.
Darty France also collected 18 tonnes of
batteries, and 6 tonnes of ink cartridges.
With the ‘1 for 0’ scheme, Darty France
collects all materials, with or without
purchase from its stores or website.
Vanden Borre in Belgium recycles
55 per cent of the products it collects
when making a home delivery.
BCC received an eco-certificate for its
sustainability performance in the field
of waste management, reducing the
impact of its waste on the environment
by 46 per cent by reducing and
separating waste.
We believe that together this makes
us one of the leading recyclers of MDA
products in Europe; it sets us apart from
many pure web players in particular.
We also aim to reduce the amount of
packaging we use and ensure that it can
be recycled. We collect all waste packaging
when delivering a household appliance
unless the customer requests otherwise.
At Darty France, Vanden Borre and BCC
we have specialised equipment that
compresses all polystyrene packaging
collected from customers’ homes for
recycling or reuse as garden furniture.
At most of our operating companies,
packaging waste is also collected from
the warehouses and after-sales service
centres; annually we recycle over
40,000 tonnes of packaging waste.
We report our emissions data using an
operational control approach to define
our organisational boundary, which
meets the definitional requirements
of the regulations in respect of those
emissions for which we are responsible.
We have reported on all material emission
sources that we deem ourselves to be
responsible for. These sources align with
our operational control and financial
control boundaries. We do not have
responsibility for any emission sources
that are beyond the boundary of our
operational control. For example, business
travel, other than by car (including
commercial flights), are not within our
operational control and therefore are
not considered our responsibility.
Supply chain
Our customers expect us to have
procedures in place to ensure that the
products we sell have been ethically
produced and handled from the beginning
right through to the end of the supply
chain. Many of our electrical products
are sourced through major international
brands who have their own strong ethical
and environmental policies in place. We
do not have significant operations or
retail outlets in countries that present a
material risk from bribery or corruption,
poor labour standards or restrict civil
or political rights. However, some of
our suppliers do.
There has been continued external
attention and debate on the role of
business and human rights. We welcome
this focus as respect, fairness and
integrity are an important part of the
responsible way we run our business. We
are committed to doing things the right
way and this is reflected in our values and
our Code of Conduct, which is available on
our website. A respect for human rights
is implicit in our employment practices
and are within the high standards we
expect from our suppliers. We continue
to be guided by the International Labour
Organization (ILO) core conventions and
the recommendation of Professor John
Ruggie, the UN Special Representative
for human rights. In some areas, such
as the elimination of child labour,
our direct influence can be limited
and in these situations our focus on
partnerships is of critical importance.
We also work with our suppliers to
help them reduce their impact on the
environment and to manage the challenges
of sustainable growth. The Group
sources its own-label products principally
from factories based in China that are
committed to improving workers’ welfare
and reducing environmental impact.
Our audit procedures are benchmarked
against leading international test
houses, and are designed to ensure
proper environmental standards are
adhered to by our own-label suppliers
in our factories and additionally to
monitor the quality of our products.
We have an experienced quality team
based in China with expertise in quality
assurance to support our own branded
products. In 2014, we carried out new
qualification audits as well as two yearly
surveillance audits on the 195 factories
we use in South-East Asia. This is to
ensure that our suppliers meet the strict
social, environmental and supply chain
standards we require. In 2014, a total of
100 audits were undertaken. In addition,
the team carried out over 4,000 Final
Random inspections.
Before shipment of any OEM product
is allowed, the quality assurance
team evaluates the product with
comprehensive CE certification from
approved European Notified Bodies.
Any supplier who fails to meet our
quality standards is delisted.
In 2014, a new programme was launched,
to provide regular checking on the
soon-to-be effective safety standards
for our product range. This programme
allows Darty to be at the leading edge
in managing the impact in advance of any
new changes related to compliance and
testing concerns.
In addition, as a further environmental
measure we are consciously trying to
minimise the emissions from our transport
operations. We continue to modify our
logistics operation to achieve a more
efficient use of the transport fleet and
make use of satellite navigation systems
to improve their delivery schedules. This
not only reduces the distance the vans
and lorries travel but also provides our
customers with more predictable arrival
times. The Group is constantly exploring
new initiatives that make good CR sense
while benefiting the businesses. At Darty
France we have a programme of enhanced
driver training, with the aim of reducing
fuel consumption and CO2 emissions
by some 15 per cent. Further savings
have come from the introduction of new
delivery vehicles with Euro 5 engines and
‘Stop and Start’ technology. Increased
use of call centres and development of
a database on repairs that provides first
level resolution has led to less vehicle
journeys to customers’ homes, not
only improving our customer service,
but also reducing our CO2 emissions.
Table 1. Global GHG emissions data for Reporting Year
1st January 2014 – 31 December 2014
Methodology
Emissions from:
Tonnes of CO2e
Combustion of fuel & operation of facilities (Scope 1)
19,526
Electricity, heat, steam and cooling purchased for own use (Scope 2)
18,079
T&D losses from electricity (Scope 3)
1,130
Total
38,735
Intensity metric: tonnes CO2e / Million EUR revenue (€m)
11.38
Table 2. Year on Year Comparison
Emissions from:
Tonnes ofCO2e
2013*
2014
Scope 1
21,535
19,526
Scope 2
20,775
18,079
-13%
Scope 3
1,156
1,130
-2.2%
43,466
38,735
-11%
12.19
11.38
-6.6%
Total
Intensity metric: tonnes CO2e /
Million EUR revenue (€m)
We have reported on all of the emission sources required
under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013. These sources fall
within our consolidated financial statement. We do not
have responsibility for any emission sources that are not
included in our consolidated statement.
The method we have used to calculate GHG emissions is
the GHG Protocol Corporate Accounting and Reporting
Standard (revised edition), together with the latest
emission factors from recognised public sources
including, but not limited to, Defra, the International
Energy Agency, the US Energy Information Administration,
the US Environmental Protection Agency and the
Intergovernmental panel on Climate Change.
Percentage
change (%)
-9%
* 2013 emissions have been re-stated in light of more accurate consumption data.
People
As a specialist retailer committed to
the best customer service, one of our
key differentiators and strengths is our
people. We have over 12,600 employees
across Europe and Asia and we want
them all to have satisfying and rewarding
careers within the Group. By respecting
and valuing our employees we engage
their talents and abilities to the fullest
extent. We also realise that a well-trained
workforce is a key differentiator and we
therefore put great emphasis on our
training programmes to improve store
staff product knowledge. Darty France
has online modules for staff training and
is looking to expand them further to cover
home delivery and after-sales service.
A programme to refurbish staff break
rooms and ensure there is access to a
PC for training and personal use has been
completed in France.
Company directors*
Other senior managers**
All employees***
We now have platforms across the whole
Group for our employees’ opinions to be
heard and we value their input on how
the business is being run. The first ever
employee survey for all the companies
in the Group was undertaken in 2012
and all our employees now regularly
participate in an employee survey.
Our communication channels include
regular workers’ councils where issues
are discussed with representatives from
across the organisation. We also have
many other forums for discussion that
allow management to take a wide range
of viewpoints into account. We promote
the health, safety and welfare of both
colleagues and customers across all our
sites and we monitor and report to our
Director of Risk Management and Audit
on these issues. We have established a
written set of Operating Principles and a
Code of Conduct that outlines the ethical
Male
Female
8
2
4
1
6,988
3,475
standards we expect from all employees of
companies within the Group. This includes
both permanent and contract staff and any
external consultants or suppliers we retain.
Diversity
The table below provides a breakdown of
the gender of Directors and employees as
at 30 April 2015.
Our people are instrumental to our
success; we respect and value the
individuality and diversity that every
employee brings to the business.
We base our relationship with our
employees on respect for the dignity
of the individual and seek to create a
positive, open working environment
wherever we operate. As at 30 April
2015, 67 per cent of our workforce
were male and 33 per cent female.
In terms of the Group’s Board of
Directors, there were 10 Directors,
eight of whom were male and two
were female (see page 29 to view
biographies of the members of
the Board).
* Company directors consists of the Company’s Board, as detailed on pages 28 and 29.
** Other senior managers is as defined in The Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013, and includes: i) persons responsible in France for planning, directing or controlling the activities
of the Company, or a strategically significant part of the Company, other than Company directors; and ii) any other
Directors of undertakings included in the consolidated accounts.
*** In France.
“As an electrical retailer,
we have a relatively low
direct environmental
impact but we still seek to
minimise the environmental
impact of all our operations
throughout the Group.”
Reducing environmental impact
At Darty France, Vanden Borre and BCC we have specialised equipment that
compresses all polystyrene packaging collected from customers’ homes for
recycling or re-use as garden furniture.
Waste is also collected from the warehouses and after-sales service centres;
annually we recycle over 40,000 tonnes of packaging waste.
Strategic report
E
D
C
B
A
6,000
TRAINED
G
F
Through the ENVIE programme
over 6,000 previously long-term
unemployed have been trained in
the repair of electrical products.
12 months to
30 April 2015
12 months to
30 April 2014
12 months to
30 April 2013
Staff training days
25,035
24,420
27,892
Accidents/injuries
1,009
955
1,167
A-rated products sold
98.4%
98.2%
96.2%
Package waste recycled
(tonnes)
43,908
42,932
42,913
Continuing Group
Communities
As a Group, we are committed to
working with the many communities
we are represented in. We work in
partnership with outside organisations
to address a number of long-standing
social issues and we support a range of
different charities on a regional basis.
Darty France has a long-standing
reputation for helping the disadvantaged.
Through the ENVIE programme
(Enterprise Nouvelle Versl’Insertion
par L’Economie) over 6,000 previously
long-term unemployed have been trained
in the repair of electrical products. During
a two-year programme, trainees practise
on end-of-life products collected from
customers. Once repaired, these are then
sold from ENVIE stores at heavily
discounted prices. Darty France annually
donates ¤60,000 to Telemaque, which
promotes access to jobs for less
advantaged youths, and encourages
Darty employers to become tutors.
Vanden Borre and Darty France raise
funds for charities through the sale of toy
models of their after-sales service vans.
Performance criteria
1 The number of days spent on
staff training
As a specialist electrical retailer, it is
important that we create a working
environment that is conducive to the
recruitment and retention of talented
staff who have excellent customer
service skills and product knowledge.
2 The number of accidents
or injuries to staff
The provision of a safe and healthy
place of work for our staff is a primary
concern and key responsibility.
3 The percentage of energy
efficient A-rated products sold
Energy label ratings on fridge freezers
help our customers choose more
efficient models. A-rated products use
the least amount of energy thereby
benefiting both our customers and
the environment.
4 The number of tonnes of packaging
waste collected and recycled
Through our distribution channels
and warehouses we can efficiently
collect our own and customers’
waste for recycling.
By order of the Board
Simon Enoch
Secretary
17 June 2015
Registered office:
22-24 Ely Place
London EC1N 6TE
Directors’ report
Board of Directors
1
2
3
4
5
6
7
8
9
10
Simon Enoch
Secretary
Auditors
Registrars and transfer office
PricewaterhouseCoopers LLP Computershare Investor
Services PLC
Stockbrokers
The Pavilions
UBS
Bridgwater Road
Bristol BS99 6ZZ
Solicitors
Slaughter and May
Audit Committee
Alison Reed (Chairman)
Registered office
Antoine Metzger
22–24 Ely Place
Agnès Touraine
London EC1N 6TE
Remuneration Committee
Michel Léonard (Chairman)
Alan Parker CBE
Pascal Bazin
Nomination Committee
Alan Parker CBE (Chairman)
Michel Léonard
Régis Schultz
Dominic Platt
Alison Reed
Pascal Bazin
Carlo D’Asaro Biondo
Antoine Metzger
Agnès Touraine
1. Alan Parker CBE (68)
Chairman
Alan Parker was appointed Non-Executive
Chairman of Darty plc on 9 August 2012,
having served on the Board of Kesa
Electricals plc since 1 October 2010.
Alan is also Non-Executive Chairman of
Mothercare plc, Chairman of Park Resorts,
Non Executive Director of Restaurant
Brands International, President of the
British Hospitality Association and Board
member/investor of Winnow Solutions.
Alan was Chief Executive Officer of
Whitbread plc from 2004 and retired
in November 2010. During his tenure
as CEO he led a substantial increase in
shareholder value and created the UK’s
largest hospitality company expanding
Premier Inn in the UK and developing
the global Costa coffee brand. Prior to
joining Whitbread in 1992, Alan was based
in Brussels and Frankfurt as Holiday Inn
EMEA Managing Director. Alan has also
served on the Boards of Jumeirah Group
LLC, VisitBritain, and was on the Board of
Burger King Worldwide prior to its merger
with Tim Horton’s in December 2014
forming Restaurant Brands International.
2. Régis Schultz (46)
Chief Executive
Régis Schultz was appointed as Chief
Executive on 23 April 2013. He joined from
BUT, the French furniture and electrical
retailer, where he had been Chief Executive
since 2008. During his time at BUT Régis
led a major renewal of the product offer
and store formats, delivering both market
share and profit improvement in a difficult
trading environment. Prior to BUT he held
a number of senior positions at Kingfisher
plc, including Chief Operating Officer for
B&Q. He holds an MSc in Management,
from the Dauphine University, Paris.
3. Albin Jacquemont (50)
Finance Director (from 18 June 2015)
Albin Jacquemont joined the Group
from Carrefour in March 2015 and will be
appointed as Finance Director on 18 June
2015. He joined Carrefour in 1998 and was
appointed as Chief Financial Officer for
Carrefour France in November 2011. Prior
to this he held a number of senior roles
in Carrefour including Group Controller
and Consolidation Director and Chief
Financial Officer of Carrefour Poland. Prior
to Carrefour he held a number of finance
positions at Lyonnaise des Eaux, where he
joined from auditors Arthur Andersen.
4. Dominic Platt (45)
(Finance Director and
Managing Director International
until 18 June 2015)
Dominic Platt was appointed Finance
Director of Kesa Electricals on 4 January
2010. Between 4 January 2013 and 23
April 2013 he was acting Chief Executive.
He will leave the Board on 18 June 2015.
Dominic joined Cable and Wireless in 1991
and held increasingly senior roles including
Manager of Corporate Finance, CFO Japan
and Asia, Group Director of Internal Audit
and from 2005 Group Financial Controller.
He is a Fellow of the Chartered Institute of
Management Accountants and has an MA
in Classics from Cambridge University.
5. Pascal Bazin (58)
Non-Executive Director
Pascal Bazin was appointed as a
Non-Executive Director on 15 October
2012. He is a Non-Executive Director of
three private companies and was most
recently Chief Executive of Avis plc where
he oversaw a very successful turnaround
of the business. He left at the end of 2011
following the sale of the business to Avis
Budget Group Inc. Previously President of
Avis France, he managed the recovery of
the French business, regaining its marketleading position. Prior to this he spent
some 16 years at Yves Rocher in a variety
of international and technology roles,
and was at PPR for five years. Pascal is a
Graduate of the Ecole Polytechnique, Paris.
6. Carlo D’Asaro Biondo (50)
Carlo D’Asaro Biondo was appointed as
a Non-Executive Director on 30 October
2012. He is also President Southern and
Eastern Europe, Middle East and Africa
Operations for Google and has previously
served as Chief Executive of AOL Europe
and International Managing Director of the
media group, Lagardère. He is also a NonExecutive Director of Mantuan International
SA. He has a Doctorate in Economics from
the Universita La Sapienza in Rome.
7. Michel Léonard (64)
Senior Independent Director
Michel Léonard was appointed Senior
Independent Director on 8 August 2012,
having been a Non-Executive Director
since 8 February 2010. He is also Chairman
of the Remuneration Committee. Michel
joined the Bongrain Group in 1985 as
General Manager. He then moved on to
become Chairman of the Management
Board of Bongrain Europe until 2000 and
then lastly in 2000 became Chairman
of the Management Board of Bongrain
Group until 2003. From 2003 to 2009
he was Chairman of the Lactalis Group
Management Board. Michel is a graduate
of HEC School of Management, Paris.
8. Antoine Metzger (61)
Antoine Metzger was appointed as a
Non-Executive Director on 15 October 2012.
He is also a director of a non-listed company
in France. He retired as Deputy Chief
Executive at Vivarte, the French fashion
retailer in March 2013, having previously
served as Secretary General since joining in
2000. Prior to this he had various finance,
planning and legal roles at Rank Xerox,
and was CFO at La Redoute and Redcats.
Antoine is a graduate of the HEC
School of Management, Paris.
9. Alison Reed (58)
Alison Reed was appointed as a
Non-Executive Director on 8 February 2012
and is Chairman of the Audit Committee.
Alison is a Non-Executive Director and
Deputy Chairman of British Airways Plc,
she is also a Non-Executive Director and
Chairman of the Audit Committee at
DRS Data and Research plc. Her previous
experience includes 21 years with
Marks & Spencer plc, ultimately as
Chief Financial Officer; Chief Financial
Officer of Standard Life plc with
responsibility for the flotation and a NonExecutive Director of HSBC Bank plc.
10. Agnès Touraine (60)
Agnès Touraine was appointed as a
Non-Executive Director on 30 October
2012. She is also the President of Act III
Consultants, having previously served
as Chief Executive of Vivendi Universal
Publishing and Games, Hachette
Consumer Group after having started
her career at McKinsey. She is also a
Non-Executive Director of Neopost SA
and Belgacom SA and is President of the
Institut Français des Administrateurs.
She has held Non-Executive Director
positions at ITV plc, Cable and Wireless
plc and Lastminute.com. Agnès Touraine
has an MBA from Columbia University, a
law degree from la Sorbonne University
and graduated from Science Po Paris.
Directors’ report
Directors’ report
The Directors present their Annual report together
with the Group audited financial statements for the
year ended 30 April 2015.
Principal activities
The Group is a multi-channel electrical
retailer that operates through the
following operating segments: France
(Darty and Mistergooddeal.com)
and Belgium (Vanden Borre) and
the Netherlands (BCC). The majority
shareholding in the operations of Datart
in Czech Republic and Slovakia was
sold on 7 August 2014 and it is now
treated as a discontinued operation.
Business model
Our business model revolves around
our strategy outlined in the Strategic
report on pages 5 to 7, focussing on
restoring profitability and establishing
the foundations for long-term success
and rebuilding shareholder value
for Darty, Vanden Borre and BCC.
Strategic report
In accordance with the new requirements
introduced by The Companies Act 2006
(Strategic Report and Directors’ Report)
Regulations 2013, which became effective
on 1 October 2013, the Directors have
included certain information required
for disclosure in other sections of the
Annual report. These sections include the
Chairman’s statement, Chief Executive’s
review, Operating review, Financial
review, Corporate responsibility report,
Corporate governance, Directors’
remuneration report and the Group
financial statements and should be read
in conjunction with this report and this
information is, accordingly, incorporated
into this report by reference.
A review of the development and
performance of the Group during the year,
its position at the year end, and the
outlook and its strategy are given in the
Chairman’s statement on page 3, the
Chief Executive’s review on pages 9 to 15,
the Financial review on pages 18 to 20
and the Operating review on page 17.
The Company has chosen, in accordance
with the Companies Act 2006 section
414C(11), to include the disclosure of likely
future developments in the Strategic
report on pages 5 to 27. Information on
environmental matters and disclosures
relating to diversity, gender and human
rights are contained in the Corporate
responsibility report on pages 23 to 27.
The key performance indicators (‘KPIs’)
and the Principal risks and uncertainties
contained therein, are incorporated into
this report by reference. Definitions of
the KPIs and the Group’s performance
against them are given on page 20.
The Principal risks and uncertainties
are set out on pages 21 and 22. Details of
the Company’s policy on addressing such
risks, along with information on the
Darty Risk Management Framework can
be found in the Corporate governance
report on pages 34 to 39.
Directors
The names and biographical details of
the Directors holding office at the date
of this report are shown on pages 28
and 29. Particulars of Directors’
emoluments and their interests in the
shares of the Group and its subsidiaries
are shown in the Report on Directors’
remuneration and related matters on
pages 40 to 51. There were no changes
in the Directors’ interests in shares
between the end of the financial year
and 17 June 2015.
At the forthcoming Annual General
Meeting and in accordance with Principle
B7.1 of the UK Governance Code all of the
Directors will be retiring and the
following, being eligible, are offering
themselves for re-election:
Profit and dividends
Group revenue was ¤3,512.1 million (2014:
¤3,404.4 million), with Group retail profit
of ¤74.9 million (2014: ¤85.5 million). The
profit before tax was ¤32.9 million (2014:
¤37.4 million).
Alan Parker
Régis Schultz
Pascal Bazin
Michel Léonard
Antoine Metzger
Alison Reed
Agnès Touraine
An interim dividend of 0.875 cents per
share was paid to the ordinary
shareholders of the Company on 1 April
2015 and, on 18 June 2015, the Directors
recommended the payment of a final
dividend of 2.625 cents (2014: 2.625
cents), giving a total dividend for the year
of 3.5 cents (2014: 3.5 cents).
Details of the terms of appointment of all
the Directors can be found in the Report
on Directors’ remuneration and related
matters on pages 40 to 51. The Board
strongly supports their re-election and
recommends that shareholders vote in
favour of the resolutions proposing their
re-election.
The final dividend, once approved, will
be paid to those persons on the Register
of Members at the close of business on
22 October 2015, and the payment date
will be 13 November 2015.
Details of all the Executive Directors’
service contracts are set out in the
Report on Directors’ remuneration and
related matters on pages 40 to 51. None
of the Non-Executive Directors has a
service contract.
Throughout the financial year, the Group
has maintained liability insurance for its
Directors and Officers against the costs of
defending themselves in civil proceedings
taken against them in that capacity and in
respect of damages resulting from the
unsuccessful defence of any proceedings.
To the extent permitted by UK law, the
Group has also provided an indemnity for
its Directors and Officers. Neither the
insurance nor the indemnity provides any
cover where the Director has acted
fraudulently or dishonestly.
Share capital and control
At 30 April 2015 there were 529,553,216
ordinary shares of 30 cents each in issue
together with rights under the Group’s
Long Term Incentive Plans for 7,650,326
ordinary shares of 30 cents. It is intended
to satisfy these rights through market
purchase, rather than issuing new shares.
Further details of the share capital are
given in note 27 to the financial
statements.
Holders of ordinary shares are entitled to
attend and speak at general meetings of
the Company, to appoint one or more
proxies and, if they are corporations,
corporate representatives to attend
general meetings and to exercise voting
rights. Holders of ordinary shares may
receive a dividend and on liquidation may
share in the assets of the Company.
Holders of ordinary shares are entitled to
receive the Company’s Annual report and
accounts. Subject to meeting certain
thresholds, holders of ordinary shares
may requisition a general meeting of the
Company or the proposal of resolutions
at Annual General Meetings.
Voting rights
On a show of hands at a general meeting
of the Company, every holder of ordinary
shares present in person or by proxy and
entitled to vote has one vote and on a poll
every member present in person or by
proxy and entitled to vote has one vote
for every ordinary share held. None of
the ordinary shares carries any special
rights with regard to control of the
Company. Electronic and paper proxy
appointments and voting instructions
must be received by the Group’s
registrars not later than (i) 48 hours
before a meeting or adjourned meeting,
or (ii) 24 hours before a poll is taken, if
the poll is not taken on the same day as
the meeting or adjourned meeting.
Restrictions on transfer of shares
There are some restrictions on the
transfer of shares in the Company, which
may from time to time be imposed by
laws and regulations (for example insider
trading laws). Pursuant to the Group’s
Code of Conduct, the Directors and
senior executives of the Group require
approval to deal in the Company’s shares.
Furthermore, where a person with at
least a 0.25 per cent interest in a class of
shares has been served with a disclosure
notice and has failed to provide the
Company with information concerning
interests in those shares, the Articles of
Association (‘the Articles’) provide that
the Company may refuse to register a
transfer of those shares.
The Group is not aware of any
agreements between shareholders that
may result in restrictions on the transfer
of shares or on voting rights.
The Company’s Articles of Association
give the Board the power to appoint
Directors, but also require Directors to
retire and submit themselves for election
at the first Annual General Meeting
following their appointment. A Director
who retires in this way is eligible for
election but is not taken into account
when deciding how many Directors
should retire by rotation at the Annual
General Meeting. The Articles themselves
may be amended by special resolution of
the shareholders.
The Board of Directors is responsible for
the management of the business of the
Group and may exercise all the powers of
the Group subject to the provisions of the
Company’s Memorandum of Association
and the Articles. The Articles contain
specific provisions and restrictions
regarding the Group’s power to borrow
money. Powers relating to the issuing and
buying back of shares are also included in
the Articles and shareholders are asked
to renew such authorities each year at
the Annual General Meeting. A copy of
the Articles is available on request from
the Company Secretary.
There are a number of agreements
that take effect, alter or terminate
upon a change of control of the
Group following a takeover, such as
commercial contracts, the Group bank
agreements, the High Yield Bond
and employees’ share plans. None of
these are deemed to be significant in
terms of their potential impact on the
business of the Group as a whole.
Pursuant to the Articles, at every Annual
General Meeting any Director who (i) has
been appointed by the Board since the
last Annual General Meeting, (ii) who held
office at the time of the two preceding
Annual General Meetings and who did not
retire at either of them, or (iii) who has
held office with the Company, other than
employment or executive office, for
a continuous period of nine years or more
at the date of the Meeting, shall retire
from office and may offer himself for
reappointment by the members.
From time to time a Director may retire
and offer himself for reappointment by
the shareholders to ensure orderly
succession.
Notwithstanding the Articles, in
accordance with Principle B7.1 of the UK
Corporate Governance Code 2014, all
Directors offer themselves for reelection at the Annual General Meeting.
Directors’ report
Directors’ report
Significant contracts
There are no parties with whom the
Group has contractual or other
arrangements that are essential to
the business of the Group.
Purchase of own shares
At the Annual General Meeting of the
Company held on 11 September 2014,
authority was given for the Company to
purchase, in the market, up to 52,955,321
ordinary shares of 30 cents each. The
Company did not use this authority to
make any purchases of its own shares
during the period. At the Annual General
Meeting to be held on 10 September 2015,
shareholders will be asked to give a
similar authority.
Substantial shareholding
As at 17 June 2015, the following
interests of more than 3 per cent
in the issued share capital of the
Company had been notified under Rule
5 of the Financial Services Authorities’
Disclosure and Transparency Rules:
Name
Number of
ordinary
shares
Percentage
of issued
share
capital
Knight Vinke
75,974,709
14.34%
Schroders plc
75,133,862
14.18%
Teacher
Retirement
System of Texas
56,630,915
10.69%
UBS Global
Asset
Management
52,038,134
9.83%
Standard Life
Investments
Limited
42,366,600
8.00%
Tameside MBC
25,208,851
4.76%
DNCA Finance
16,050,000
3.03%
Annual General Meeting
The 12th Annual General Meeting of
the Company will be held at 11.00 am
on Thursday, 10 September 2015 at
the Crowne Plaza, 19 New Bridge Street,
London EC4V 6DB.
Corporate responsibility and diversity
The Group has an Operating Principles
handbook which contains a Code of
Conduct that sets out the standards
of behaviour expected in the Group and
of all who work for the Group, in their
relationships with employees, customers,
suppliers, business partners, the
community (including the environment),
government and all other stakeholders in
the business.
Employment policies
At 30 April 2015, the number of
employees working for the Group in
Europe and Asia was 12,618. The Group
consists of a number of businesses
operating in different countries. While
employment practices may vary
between these businesses, the Group is,
nevertheless, committed to ensuring that:
•
all employees receive fair and equal
treatment irrespective of gender,
ethnic origin, age, nationality, marital
status, religion, sexuality or disability;
•
the working environment is conducive
to achievement and free from
harassment and intimidation;
•
disabled persons, whether registered
or not, have equal opportunities when
applying for vacancies, with due
regard to their aptitudes and abilities.
In addition to complying with
legislative requirements, procedures
ensure that disabled employees are
fairly treated and that their training
and career development needs are
carefully managed; and
•
the assessment of training needs and
the provision of appropriate training is
delivered to its employees.
Health and safety
Group companies have a responsibility
to ensure that all reasonable precautions
are taken to provide and maintain
working conditions, for employees and
visitors alike, which are safe, healthy
and in compliance with statutory
requirements and appropriate codes
of practice.
The Group’s companies pursue the
objective of minimising the instances
of occupational accidents and illnesses.
Examples of this are to be seen in the
employment of health and safety
advisers and in the establishment of
detailed policies and statements of
intent and training programmes for
employees. The Company Secretary
has the responsibility to ensure that the
Board is presented with a review detailing
how the Group overall complies with the
statutory requirements and appropriate
codes of practice.
Employee involvement
Group companies actively consult their
staff on matters of concern to them in
the context of their employment. In
Europe, where the largest number of
employees are, there is a formal
consultation process through workers’
councils. Consultation also takes place
through joint consultation committees.
Information on matters of concern
to employees including the
financial and economic factors
affecting the performance of
the Group is also disseminated
through conferences, meetings,
publications and electronic media.
More information on corporate
responsibility including greenhouse gas
emissions is set out on page 25.
The Group’s statement on corporate
governance can be found in the
Corporate governance section on pages
34 to 39. The Corporate governance
section forms part of this Directors’
report and is incorporated into it by
way of cross reference.
Directors’ disclosure of information
to auditors
The Directors believe that there is no
relevant audit information of which the
auditors are unaware and each Director
has taken all steps that they ought to
have taken as a Director to make
themself aware of any relevant audit
information and to establish that the
auditors are aware of that information.
Going concern
The Directors have performed a review of
revenue and profit forecasts, expected
cash flows, available borrowing facilities
and expected compliance with related
covenants. This has provided reasonable
expectation that the Darty Group has
adequate resources to continue in
operational existence for the next
financial year and the foreseeable future.
Following this review and a discussion
of a number of sensitivities that were
applied, the Audit Committee confirmed
it continues to be appropriate to follow
the Going Concern basis of accounting
in the financial statements.
Accordingly, the Directors continue to
adopt the going concern basis in
preparing the financial statements.
Fair, balanced and understandable
The Board received an early draft of
the Annual report and accounts as a
whole and discussed the tone, balance
and language of the document, taking
into account the recent changes in the
UK Corporate Governance Code and
the need for consistency between
the narrative sections and the financial
statements. The Board received
the work undertaken by the Audit
Committee including the auditors’ review.
The Board’s statement on the report is
outlined on page 36.
Auditors
Resolutions concerning the
reappointment of the auditors and
authorising the Directors to set their
remuneration will be proposed at the
Annual General Meeting.
PricewaterhouseCoopers LLP have been
the Company’s auditors since it listed on
the London Stock Exchange in July 2003.
Following its annual review, the Audit
Committee considers that the
relationship with the auditors is working
well and remains satisfied with their
effectiveness. Accordingly, it has not
considered it necessary to date to require
the firm to tender for the audit work. The
external auditors are required to rotate
the audit partners responsible for the
Group and subsidiary audits every five
years and the current lead audit partner
has been in place since September 2012.
There are no contractual obligations
restricting the Company’s choice of
external auditors.
By Order of the Board
Simon Enoch
Secretary
17 June 2015
Registered Office:
22-24 Ely Place
London EC1N 6TE
The Financial Conduct Authority (‘FCA’)
requires listed companies to disclose, in
relation to the UK Corporate Governance
Code 2014 (‘the Code’), how they have
applied its principles and whether they
have complied with its provisions
throughout the accounting year.
The Board of Darty plc supports the
principles of corporate governance
advocated by the Code and the Board
believes that it complies in full with the
terms of the Code.
Directors
The Board consists of a Chairman,
a Chief Executive plus one further
Executive Director and six Non- Executive
Directors. There is a clear division of
responsibilities between the Chairman
and Chief Executive.
All the Non-Executive Directors are
independent in character and judgement
and there are no relationships or
circumstances which could affect, or
appear to affect, a Director’s judgement.
Michel Léonard is the Senior Independent
Director. Alison Reed, an independent
Non-Executive Director and Chairman of
the Audit Committee, is a qualified
accountant. She is considered to have
recent and relevant financial experience.
The Board is aware of the other
commitments of its Directors and is
satisfied that these do not conflict with
their duties as Non-Executive Directors of
the Company. The Executive Directors do
not hold any Non-Executive Directorships
in other companies.
The Non-Executive Directors are
appointed for specified terms and the
details of their respective appointments
are set out in the Report on Directors’
remuneration and related matters on
page 44. Copies of their respective
letters of appointment or contracts are
available for inspection at the Company’s
registered office and will also be available
for inspection at the forthcoming Annual
General Meeting.
All Directors are subject to re-election by
shareholders at the first opportunity
after their appointment and thereafter in
accordance with Article 82 of the
Company’s Articles of Association. The
Directors are following the best practice
requirements of Principle B7.1 of the Code
and all will be retiring at the forthcoming
Annual General Meeting, and are offering
themselves for re-election.
The Chairman and Non-Executive
Directors meet as a group without the
Executive Directors present. The
Non-Executive Directors meet in the
absence of the Chairman if there are any
concerns, which the Chairman has failed
to resolve, or to consider his performance
or terms of appointment.
The role of the Chairman is to ensure that
the Board has full and timely access to all
relevant information. The Chairman leads
the Board and represents the Board to
the Chief Executive as necessary
between Board meetings.
The duties of the Board and its
committees are set out clearly in formal
terms of reference, copies of which are
available from www.dartygroup.com.
These are reviewed regularly, stating the
items specifically reserved for decisions
by the Board. The Board establishes
overall Group strategy, including new
activities and withdrawal from existing
activities. It approves the Group’s
commercial strategy and the operating
budget and monitors divisional
performance through the receipt of
monthly reports and management
accounts. The process for the approval of
acquisitions/divestments for the most
part is a matter reserved for the Board
save that it delegates to the Chief
Executive the responsibility for such
activities up to a specified level of
authority. Similarly, there are authority
levels covering capital expenditure, which
can be exercised by the Chief Executive.
Beyond these levels of authority, projects
are referred to the Board for approval.
Other matters reserved to the
Board include:
•
•
overview of financial control, audit and
risk management;
remuneration:
–– the Group’s framework of executive
remuneration and its cost in the
light of recommendations made by
the Remuneration Committee;
–– the remuneration of the
Non-Executive Directors;
•
senior management succession plans
and the overall direction of
management development;
•
•
•
pension schemes;
corporate responsibility; and
the appointment or removal of the
Company Secretary.
The Board is supplied in a timely manner
with information in a form and of a
quality appropriate to enable it to
discharge its duties. This includes
monthly management accounts
irrespective of whether or not a Board
meeting is scheduled. There is also a
procedure under which Directors, in
furtherance of their duties, are able to
take independent professional advice,
if necessary, at the Company’s expense.
The Company Secretary is responsible
for ensuring that Board procedures are
followed and all Directors have access to
his advice and services.
The Directors receive training as part of
their induction from the Company’s legal
advisers on the duties and responsibilities
of being Directors of a publicly limited
company. The training needs of the
Directors are periodically discussed at
Board meetings and briefings are given
by the Company Secretary on various
elements of corporate governance,
regulatory compliance and best practice.
In previous years the Board has
conducted its own evaluation exercise.
In September 2013 it engaged an
independent professional organisation
to undertake an evaluation process.
A further exercise was undertaken in
February 2015 which covered the Board,
as well as its principal committees and
the results have been considered by the
Board and the respective committees.
The Senior Independent Director, Michel
Léonard also met with the Non- Executive
Directors in the absence of the Chairman,
to assess the Chairman’s effectiveness.
Details of the Chairman’s professional
commitments are included in his
biography on page 29.
During the year ended 30 April 2015
the Board met 8 times. This is felt
adequate to enable effective running
of the Company. The attendance record
of individual Directors at Board and
Committee meetings is detailed above.
The Board has established a number
of committees, including Audit,
Remuneration, Nomination and
Disclosure Committees:
(a) Audit Committee
The Audit Committee consists of three
Non-Executive Directors, considered by
the Board to be independent. They are
Alison Reed (Chairman), Antoine Metzger
and Agnès Touraine. The Committee has
at least one member, Alison Reed, who
possesses recent and relevant financial
experience. It can be seen from the
Directors’ biographical details, appearing
on page 29, that the members of the
Committee bring to it a wide range of
experience from positions at the highest
level, both in the UK and France.
The Committee met five times in 2014/15.
Both the external auditors and the
Director of Risk Management and Audit
were present at the meetings and, in
addition, the Committee met the external
auditors without management present.
The external auditors are not present
when their performance and/or
remuneration is discussed. The Director
of Risk Management and Audit has the
right to request a meeting without other
management present, and he regularly
meets the Chairman of the Audit
Committee without management being
present. The Chief Executive and the
Finance Director attend meetings
as appropriate.
Board
meetings
(8)
Audit
meetings
(5)
Remuneration
meetings
(4)
Nomination
meetings
(1)
Disclosure
Committee
meetings
(4)
Alan Parker
8
N/A
4
1
4
Régis Schultz
8
N/A
N/A
1
4
Dominic Platt
8
N/A
N/A
1
4
Pascal Bazin
8
N/A
4
1
N/A
Carlo D’Asaro Biondo 8
N/A
N/A
1
N/A
Michel Léonard
8
N/A
4
1
N/A
Antoine Metzger
8
5
N/A
1
N/A
Alison Reed
8
5
N/A
1
N/A
Agnès Touraine
8
5
N/A
1
N/A
The Chairman of the Audit Committee
reports the outcome of meetings to the
Board and the Board receives the
minutes of all Audit Committee meetings.
•
to monitor and review the external
auditors’ independence, objectivity
and effectiveness, taking into account
UK professional and regulatory
requirements;
The main role and responsibilities are set
out in written terms of reference which
encompass those recommended by the
Combined Code, i.e.:
•
•
•
•
to monitor the integrity of the
financial statements of the Company,
reviewing significant financial
reporting issues and judgements
contained therein;
•
to review the financial reports for
publication and to ensure compliance
with all accounting policies and
standards;
•
to review the Company’s compliance
with legal and regulatory
requirements;
•
to review the Company’s internal
financial control and risk management
systems and to review risk exposures
and steps taken to monitor and
control them;
•
to monitor and review the
effectiveness of the Company’s
internal audit function;
•
to monitor the operation of formal
complaints procedures, including
whistleblowing;
to satisfy itself that the Company’s
code of conduct is being enforced; and
the removal and appointment of the
Group Director of Risk Management
and Internal Audit.
The Committee has an annual work plan.
This includes standing items that are
considered regularly, in addition to any
specific matters that need the
Committee’s attention and topical items
on which the Committee chooses to
focus. This year:
•
at its meetings in May, June
September and November the focus
was the review of the published
financial results, the Annual report
and other published financial
information. The Committee
considered the appropriateness of
the Group’s accounting policies,
critical accounting estimates and
key judgements;
to make recommendations to the
Board in relation to the appointment of
the external auditors and to approve
the remuneration and terms of
engagement of the external auditors;
•
•
•
The significant issues the Committee
considered in relation to the financial
statements for the year ended
30 April 2015 and that were closely
considered with the external
auditors were:
•
Group accounting policies, critical
accounting estimates and key
judgements
The Committee reviewed the accounting
policies and the disclosures in note 1 to
the consolidated financial statements
that relate to critical accounting
estimates and key judgements and
re-confirmed they remain appropriate.
a report from the Director of Audit
and Risk Management was presented
and discussed at each of the five
meetings, which highlighted any
significant risk and control issues;
The Committee monitored
management’s responsiveness to the
Internal Audit findings and
recommendations and ensured that
management took appropriate action
on the issues arising;
In addition, at the May 2014 meeting,
the Director of Audit and Risk
Management submitted the internal
audit plans for the coming year which
were discussed and approved. Key
areas of focus across the Internal
Audit Plan included privacy and
protection, including cyber security,
financial management and controls,
revenue assurance and the London
finance team transfer to France;
•
the external auditors presented
their Group audit plan, which was
considered and approved by the
Committee. The key areas of focus
set out in the Auditors report on pages
53 to 57 were discussed. These areas
of focus were again reviewed with the
external auditor at the time of their
review of the half year results and also
at the time of the consideration of the
financial statements for the year.
There was a detailed review of the
external auditors’ effectiveness at the
September 2014 meeting, which took
into account feedback from the
Committee and various stakeholders
across the business. The external
auditors work was rated as meeting or
exceeding expectations;
•
presentations were made to the
Committee on the subject of risk, its
identification, management and
control. Darty’s risk management
processes have been in place
throughout the period under review.
The risks that are considered material
are regularly reviewed by the
Executive Committee and by the Board.
These included the risks set out in
Principal Risks on pages 21 and 22.
The Committee also received and
discussed specific risk presentations
on key business areas. The Committee
also considers any whistleblowing
reports regarding accounting,
internal accounting controls or
auditing matters;
as a matter of routine, the Committee
was presented with information
on material litigation involving
Group companies;
Carrying value of leasehold
properties in France
The Audit Committee considered the
carrying value of leasehold properties in
France in light of their size and the
trading performance of the business in
recent years. The Committee reviewed
the store by store impairment analysis
prepared by management and the trading
forecasts supporting the assessment and
concluded that these net assets were
held at an appropriate value.
Revenue and rebate recognition
The Audit Committee is aware of the
heightened concern regarding revenue
recognition and rebates. It has reviewed
the controls over revenue and rebates
with senior management to ensure the
appropriateness of the revenue
recognition and its collectability.
Going concern
The Directors have performed a review of
revenue and profit forecasts, expected
cash flows, available borrowing facilities
and expected compliance with related
covenants. This has provided reasonable
expectation that the Darty Group has
adequate resources to continue in
operational existence for the next
financial year and the foreseeable future.
Following this review and a discussion
of a number of sensitivities that were
applied, the Committee confirmed it
continues to be appropriate to follow
the Going concern basis of accounting
in the financial statements.
Accordingly, the Directors continue to
adopt the going concern basis in
preparing the financial statements.
Retirement benefits
The Committee reviewed the
assumptions underlying the IAS19
accounting valuation of the pension
liabilities in the financial statements and
considered the financial assumptions
including the discount rate, price
inflation and the rate of increase in
pensions and salaries as disclosed in
note 32 of the financial statements.
Tax
Following a number of tax audits in
France, extensive professional advice
has been taken and reviewed by the
Committee which concluded that the
Group has a very strong defence and
many of the claims are without merit.
Provisions have been made based on the
best estimate of the expected outcome.
As noted above, one of the duties of the
Audit Committee is to make
recommendations to the Board in relation
to the appointment of the external
auditors. The Committee, in assessing
whether to recommend the auditors for
reappointment, takes a number of factors
into account. These include:
•
audit scope, planning and the quality
of reports provided to the Audit
Committee and the Board and the
quality of advice given;
•
the level of understanding
demonstrated of the Group’s business
and industry;
•
the objectivity of the auditors’ views
on the controls around the Group and
their ability to coordinate a global
audit working to tight deadlines; and
•
monitoring of non-audit services.
The Committee has put in place
safeguards to ensure that the
independence of the audit is not
compromised and the auditors are
restricted in their ability to perform any
non-audit activities. Arrangements are in
place for the auditors to report to the
Committee on actions they take
to comply with the professional and
regulatory requirements and best
practice designed to ensure their
independence from the Company.
The Committee reviews its performance
annually through questionnaires, the
results of which show the Committee
continues to work effectively.
(b) Remuneration Committee
The Remuneration Committee consists
exclusively of Non-Executive Directors
considered by the Board to be
independent: Michel Léonard (Chairman)
Alan Parker and Pascal Bazin. The
Committee’s responsibilities include
setting remuneration policy, ensuring
that the remuneration and terms of
service of the Executive Directors are
appropriate and that Directors are fairly
rewarded for their individual contribution
to the Company’s overall performance.
It also ensures that the allocation of
shares under the Group’s share schemes
are on a fair and equitable basis and in
accordance with agreed performance
criteria. The application of corporate
governance principles in relation to
Directors’ remuneration is described in
the Report on Directors’ remuneration
and related matters on pages 40 to 51.
(c) Nomination Committee
The members of the Nomination
Committee are Alan Parker (Chairman),
Pascal Bazin, Carlo D’Asaro Biondo,
Antoine Metzger, Michel Léonard,
Dominic Platt, Alison Reed, Régis Schultz
and Agnès Touraine. The Committee is
chaired by the Senior Independent
Director on any matter concerning the
Chairmanship of the Company.
The Nomination Committee has written
terms of reference covering the authority
delegated to it by the Board. These
include the following duties:
•
to review regularly the Board
performance, including structure, size,
composition and diversity and make
recommendations to the Board with
regard to any adjustments that are
deemed necessary;
•
Board appointments and removals are
matters reserved for the Board. It is
the responsibility of the Nomination
Committee to identify and nominate
candidates for the approval of the
Board, to fill Board vacancies as and
when they arise and to review
succession plans for both Board and
senior executive positions; and
•
setting policy for granting of
service agreements (including
mitigation policy).
(d) Disclosure Committee
The members of the Disclosure
Committee are Dominic Platt (Chairman),
Régis Schultz and Alan Parker. The
Committee’s responsibilities include the
establishment and maintenance
of disclosures controls and processes for
the appropriateness of disclosures made
by the Group and for compliance with the
Group’s share trading rules.
Share capital and control
The disclosures required under DTR
7.2.6 are to be found on page 32 of the
Directors’ report.
Relations with shareholders
The Company recognises the importance
of communicating with its shareholders
and does this through its Annual and
Interim reports and at the Annual
General Meeting. Although it does not
have precise rules covering meetings with
institutional shareholders, it is always
ready to enter into a dialogue with
investors, and meetings take place
frequently.
The Board believes that good
communication with shareholders is
important. The Chairman has had a
number of meetings with the Company’s
institutional Investors, and there are
programmes for the Chief Executive and
Finance Director to meet the Company’s
institutional investors in the UK and
Europe and presentations are made on
the operating and financial performance
of the Group and its longer-term strategy.
Roadshows are held in the UK and Europe
immediately after the presentation of the
full-year and interim results. If it is not
possible to arrange face-to-face
meetings, meetings are held by telephone
conference. The presentations made to
representatives of the investment
community following the announcement
of the full-year and interim results are
available online at www.dartygroup.com
as is a web cast of the result’s
presentations.
The Non-Executive Directors are given
regular updates as to the views of
institutional shareholders and the Senior
Independent Director, Michel Léonard,
is available to meet institutional
shareholders should there be unresolved
matters that shareholders believe should
be brought to his attention.
The principal communication with
private investors is through the Annual
report, the half-year management
statements and the Annual General
Meeting. A presentation is made at the
Annual General Meeting to facilitate
greater awareness of the Group’s
activities. Shareholders are given the
opportunity to ask questions of the
Board and the Chairman of each Board
committee at the meeting and meet the
Directors informally after the meeting.
Separate resolutions are proposed for
each item of business and the ‘for’,
‘against’ and ‘abstention’ proxy votes
cast in respect of each resolution
proposed at the meeting are counted
and announced after the shareholders
present have voted on each resolution.
Notice of the Annual General Meeting is
posted to shareholders with the Annual
report at least 20 working days before
the date of the Annual General Meeting.
Financial and other information including
the terms of reference for the Board and
Board committees are available from
the Company’s registered office and are
also available on the Company’s website
www.dartygroup.com.
Accountability, risk management
and internal control
It is a requirement of the Code that
the Board should present a balanced
and understandable assessment of
the Company’s position and prospects.
In this context, reference should be
made to the Statement of Directors’
responsibilities on page 52, which
includes a statement of compliance
with the Code regarding the Group’s
status as a going concern, and to the
Auditors’ report on page 53, which
includes a statement by the auditors
about their reporting responsibilities.
The Board recognises that its
responsibility to present a balanced
and understandable assessment
extends to interim and other pricesensitive public reports and reports
to regulators as well as information
required to be presented by law.
The Group has a thorough assurance
process in place in respect of the
preparation, verification and approval of
periodic financial reports. This process
includes:
Qualified, professional employees
The involvement of qualified, professional
employees with an appropriate level of
experience (both in Group finance and
throughout the business).
Comprehensive review
Comprehensive review and, where
appropriate, challenge by key internal
Group functions.
Transparent process
A transparent process to ensure full
disclosure of information to the external
auditors. Engagement of a professional
and experienced firm of external
auditors.
Oversight
Oversight by the Group’s Audit
Committee, involving (among other
duties):
•
a detailed review of key financial
reporting judgements which have
been discussed by management;
•
review and, where appropriate,
challenge on matters including:
–– the consistency of, and any changes
to, significant accounting policies
and practices during the year;
–– significant adjustments resulting
from an external audit;
–– the going concern assumption; and
–– the Company’s statement on
internal control systems, prior to
endorsement by the Board.
In addition to the above process, and
the review by the Audit Committee as to
the preparation, internal verification and
approval process for the Annual report
and accounts, the Committee has the
opportunity to direct questions to the
Chief Executive on the overall messages
and tone of his review and the Annual
report. The Committee has also
considered other information regarding
the Group’s performance presented
to the Board during the period. After
debate and consideration of all the
relevant information the Committee
felt able to provide comfort to the Board
that the Annual report and accounts,
taken as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s performance,
business model and strategy.
Internal control
The Board has overall responsibility for
the Group’s system of internal control
and for reviewing its effectiveness
and confirms that such reviews have
taken place regularly throughout the
year ended 30 April 2015 and up to the
date of this report, as set out on pages
38 and 39. Such a system is designed
to manage rather than eliminate the
risk of failure to achieve business
objectives and can provide reasonable,
but not absolute, assurance against
material misstatement or loss. The
Board has reviewed the effectiveness
of the key procedures that have been
established to provide internal control.
In line with publication of guidance for
Directors on internal control in the
Combined Code, the Board confirms that
there is an ongoing process for
identifying, evaluating and managing
the significant risks faced by the Group.
These include those relating to social,
environmental and ethical matters.
The process is reviewed by the Audit
Committee, which reports its findings for
consideration by the Board, and is in
accordance with the Code and the
Turnbull Committee guidance.
The four key procedures operated
throughout the year:
1 Risk assessment:
the Group sets out its objectives
clearly as part of its medium-term
planning process. These objectives are
then incorporated as part of the
budgeting and planning cycle and are
supported by the use of both financial
and non-financial key performance
indicators;
•
•
the operating companies make
presentations on risk whose reports
are incorporated in the Risk
assessment reviewed by the Group
Audit Committee, which reports to the
Group Board on the risks and any
weaknesses facing the businesses;
•
the detailed assessment of strategic
risks is delegated to the Chief
Executive. This review is carried out as
part of the annual budgeting and the
monthly reporting and reforecasting
cycles; and
•
the Audit Committee has delegated
responsibility for considering
operational, financial and compliance
risks on a regular basis and receives
reports on the controls over these
risks. This includes risks arising from
social, environmental and ethical
matters.
2 Control environment
and control activities:
the Group consists of a number of
operating companies, each with its
own management and control
structures;
•
•
the Group has established procedures
for delegated authority, which ensure
that decisions that are significant,
either because of the value or the
impact on other parts of the Group,
are taken at an appropriate level;
•
•
•
•
•
•
•
the Group has implemented
appropriate strategies to deal with
each significant risk that has been
identified. These strategies include not
only internal controls but also other
approaches such as insurance, joint
ventures and treasury activities; and
the operating companies work within
a framework of policies and procedures
laid down in organisation and authority
manuals, and personnel are required
to comply with these procedures.
Policies and procedures cover key
issues such as authorisation levels,
segregation of duties, compliance
with legislation and physical and
data security. The Group has also
established a whistleblowing policy.
3 Information and communication:
the Group has a comprehensive
system of budgetary control including
monthly performance reviews for each
major business and division. These
reviews are at a detailed level within
the operating companies and at a
higher level for the Group Board;
•
•
on a monthly basis, the achievement
of business objectives, both financial
and non-financial, is assessed using
a range of key performance indicators.
These indicators are reviewed to
ensure that they remain relevant
and reliable; and
•
there are clear procedures in the
major operating companies for
employees to report suspected
improprieties.
4Monitoring:
The effective application of internal
control within the Group is monitored
by the Audit Committee, Chief Executive
(and business heads of the other
operating companies as appropriate),
and internal audit and risk management.
The Audit Committee, which in respect
of the Group:
•
monitors the integrity of the
financial statements and any formal
announcements relating to the
financial performance;
reviews internal financial controls and
systems, and other internal control
and risk management systems through
reports from the internal and external
auditors on any material control
weaknesses;
reviews risk management
processes; and
monitors and reviews the
effectiveness of the internal audit
function and the function’s work plans.
The Chief Executive and, where
appropriate, the business heads of the
other operating companies, who:
•
maintain systems that continually
identify and evaluate significant risks
resulting from their strategies and
that apply to their areas of the
business;
•
review and monitor the effectiveness
of internal control systems through an
operating Company Audit Committee
and reports from internal and external
audit functions;
•
have responsibility for identification
and evaluation of significant risks to
their business area, together with the
design of mitigating controls;
•
report on any control weaknesses or
breakdowns that could be material to
the Group; and
•
certify with the Finance Director for
the operating company that all
necessary information has been
provided to the auditors.
The internal audit and risk management
function, which:
•
works with the operating companies
to develop, improve and embed risk
management tools and processes into
their business operations;
•
oversees the operation of the
individual operating business’
Audit Committee;
ensures that business risks
are identified, managed and
regularly reviewed at all levels of
the Group and that Directors are
periodically appraised of the key
risks in accordance with the
Turnbull guidance;
provides the Board and the Group
Audit Committee with assurance
on the control environment across
the Group;
•
ensures that the operating companies
have appropriate organisation and
processes to carry out regular reviews
of their internal controls; and
•
monitors adherence to the Group’s
key policies and principles.
While management at each operating
business has responsibility for the
identification and evaluation of
significant risks applicable to their
business and any mitigating actions to
be taken, Group executive management
reviews, identifies and evaluates the risks
that are significant at Group level as well
as the mitigating actions against those
risks. These are then considered by the
Board. The type of risks identified include
strategic risk, external factors (such as
the competitive environment and
regulations) change management
programmes, health and safety, retention
of key management and macro market
risks. The internal audit plans are
designed to address the controls and
actions in relation to each business’s
significant identified risks. Where
appropriate the risk management process
will include the use of insurance.
The Directors can confirm that they
review the effectiveness of this system of
internal control, and that it accords with
the guidance of the Turnbull Committee
on internal control.
The Board’s review of the system of
internal controls has not identified any
significant failings or weaknesses,
and therefore no remedial actions
are required.
Report on Directors’ remuneration
and related matters
Dear shareholder
Introduction
On behalf of the Board, I am pleased to
present the Directors’ remuneration
report for the year ended 30 April 2015.
You will see that, following this
introductory statement, we have set
out in full the policy report which was
approved by a binding shareholder
vote at the 2014 AGM and to which no
changes have been made, followed by
our annual report on remuneration
which is subject to an advisory vote
at our 2015 AGM. I hope that you find
the layout of the remuneration report
clear and transparent and that we
can rely on your continued support
for our remuneration policy and its
implementation during the year.
Context for executive remuneration
This year has primarily been focused
on implementing and monitoring the
effectiveness of the changes made last
year and our remuneration principles
remain unchanged. The intention of the
principles, which were used to guide the
content of the policy report, is to ensure
that remuneration arrangements are
aligned to and support the delivery of
the Group’s business strategy to turn the
business around and return to growth in
order to create value for shareholders.
Darty’s aim is to attract and retain a
high calibre of person as appropriate to
the specific role. This central aim remains
the same whether we are talking about
senior executives or colleagues wherever
they work in our business.
Major decisions on and changes to
Directors’ remuneration during the year
As stated above, this year has primarily
been a year of implementing the changes
agreed last year.
2014/15 Remuneration outcomes
2014/15 was a challenging year for the
business and this has been reflected
through the remuneration received by
the Executive Directors.
The CEO’s salary was not increased for
the coming year.
Under the annual bonus scheme the
profit targets were not met but strong
performance in respect of some of
our strategic objectives led to a small
proportion of the bonus being paid.
The CEO received a bonus of 35 per cent
of salary and the CFO a bonus of
33.16 per cent of salary. Half of which
will be deferred into Darty shares for a
period of three years.
The operation of the bonus remains
unchanged, with 50 per cent of any
bonus earned now being deferred for
a period of three years.
The changes we made last year to
simplify the performance period and
introduce an additional holding period
for the LTIP were implemented during
the year.
Awards were made subject to EPS
and free cash flow targets as these
are considered to remain the most
appropriate measures of long-term
performance aligned to shareholder
value creation.
Performance is measured over a threeyear period, and awards are subject to an
additional two-year holding period and
will vest five years after the initial award
is made as opposed to vesting 50 per
cent after three years and 50 per cent
after four years. This change was phased
in with half of the awards made in 2014
being subject to a one-year additional
holding period and the other half the full
two-year holding period. The awards
made in the coming financial year will
have the full two-year holding period.
The LTIP awards made in June 2012 did
not meet the performance targets set
and so awards lapsed in full.
Director departures
Dominic Platt will leave the Board on
18 June 2015 and Albin Jacquemont will
replace him as Group Finance Director
from this date. The termination
arrangements for Dominic Platt are in
line with the terms of his contract, our
Remuneration Policy and mitigation
principles have been applied.
Further details of all Directors’
departures are provided in the annual
report on remuneration. We look forward
to receiving your support at our
forthcoming AGM.
Michel Léonard
Chairman, Remuneration Committee
17 June 2015
The report complies with the provisions
of the Companies Act 2006 and Schedule
8 of the Large and Medium-Sized
Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013.
The report has been prepared in line
with the recommendations of the UK
Corporate Governance Code and the
requirements of the UKLA Listing Rules.
Remuneration policy report
This section of the report sets out the remuneration policy for Executive Directors and Non-Executive Directors, which
shareholders approved at the 2014 AGM on 11 September 2014, and is effective for three years from then.
The table below summarises the main components of the remuneration policy.
Element
Base salary
and fees
Purpose and
link to strategy
Operation
(including maximum levels)
Framework used to assess performance
and provision for the recovery of sums paid
To provide an appropriate
level of fixed cash income to
attract and retain executives
who can deliver the
Company’s strategy
Salaries and fees are normally reviewed annually, with Not applicable, although performance in role will
be taken into account in determining any salary
changes effective from 1 May
increases
Salary and fee levels are set taking into account a
number of relevant factors which include:
scale and responsibility of the role
• the
skills and experience of the individual
• the
increases awarded across the Group
• salary
as a whole
practice in companies of a similar
• competitive
size and complexity
To avoid setting expectations of Executive Directors
and other employees, no maximum salary or fee is set
under the remuneration policy. However, any increase
will normally be broadly in line with increases
awarded across the Group as a whole
Higher increases may be made in certain
circumstances, which may include:
increase in the size or scope of the role
• anor responsibilities
in the size or complexity of the Group
• anan increase
to reflect the individual’s development
• andincrease
performance in role
Benefits
To provide a competitive
fixed remuneration package
to attract and retain
executives who can deliver
the Company’s strategy
Executive Directors may receive benefits including
but not limited to: a company car (or cash equivalent),
travel allowance, private medical and dental
insurance, travel accident policy, life assurance and
long-term disability benefit dependent upon the
locations in which the executives are employed and
provide services
Not applicable
No other benefits are currently provided. However,
where appropriate other benefits may be provided to
take account of individual circumstances, such as but
not limited to: international allowances, relocation
expense, housing allowance and education support
Provision for
retirement
To provide executives
with a competitive fixed
remuneration package to
attract and retain executives
who can deliver the
Company’s strategy
The Company may make a payment into a defined
contribution pension plan and/or make a cash
allowance payment set as a percentage of salary
which will not exceed 20 per cent of salary
Not applicable
Annual
Bonus Plan
To reward the delivery of
the business strategy on an
annual basis
Maximum bonus opportunity of 150 per cent of annual
salary plus fee. Current opportunities are 125 per cent
of salary and fees for the Chief Executive and 100 per
cent of salary for the Finance Director
Bonuses are based on a combination of stretching
annual financial performance measures and role
specific strategic objectives, with the majority of the
bonus assessed against the financial performance
metrics
Rewards annual performance
against key financial and
Performance is measured over a single financial year
individual objectives which
with payout levels determined by the Committee
are directly linked to the
following the year end
Group’s strategic plan
Half of any bonus earned will be paid in cash
The remaining half will be compulsorily deferred for
three years and the value received after three years
will reflect the change in the value of Darty plc shares
over that period
For target performance up to 65 per cent of the
maximum bonus may be paid
Deferred bonuses are subject to malus and may
be reduced at the discretion of the Committee in
the event of material misstatement of financial
results, reputational damage to the Group, or gross
misconduct of the individual
The Committee may adjust the bonus payout, either up
or down, should the formulaic outcome be considered
not to reflect underlying business performance
and related matters
Element
LTIP
Purpose and
link to strategy
Operation
To reward the delivery of the
Company’s strategy over the
longer term
The current maximum face value of annual awards
is 100 per cent of annual salary plus fee. The plan
rules provide for awards of up to 150 per cent of
annual salary plus fee to be made in exceptional
circumstances
Vesting of the LTIP is subject to continued
employment and the achievement of stretching
earnings per share (EPS) and free cash flow growth
targets at the end of a three-year performance
period
Rewards strong business
performance and sustained
increase in shareholder value Awards are made on an annual basis either in the
form of nil-cost options or conditional shares with
Supports retention and
performance assessed over a period of at least
promotes share ownership
three years. Following the end of the performance
period awards will be required to be held for up to an
additional two-year period before they are released
to executives
For awards made in 2014 and onwards, 50 per cent
of the award will be released one year after the end
of the performance period and 50 per cent two years
after the end of the performance period
For awards made in 2013 and prior years before the
adoption of this policy, awards will vest 50 per cent
after three years and 50 per cent after four years
None of the award will vest if the minimum
performance threshold is not reached
For threshold performance up to 25 per cent of the
award will vest. The vesting level will increase on
a sliding scale from this threshold to 100 per cent
vesting for stretch levels of performance
Further details, including the performance targets
attached to the LTIP award made each year, will be
disclosed in the annual report on remuneration
LTIP awards are subject to malus and may be
reduced at the discretion of the Committee in
the event of material misstatement of financial
results, reputational damage to the Group, or gross
misconduct of the individual
The Committee has discretion to adjust the formulaic
LTIP outcomes to improve the alignment of pay with
value creation for shareholders to ensure the outcome
is a fair reflection of the performance of the Company
Shareholding
requirement
To provide alignment
between Executive Directors
and shareholders
The Chief Executive must build up and hold a
minimum shareholding of 150 per cent of salary and
the Finance Director 100 per cent of base salary.
Executives have up to five years from the date of
their appointment to the Board to build up their
shareholding
Not applicable
Legacy plans
Upon his appointment, the CEO was granted a one-off share award to compensate him for remuneration foregone at his previous
employer. Details of this award are provided below:
Element
One-off
share award
Purpose and
link to strategy
Operation
To compensate for
remuneration foregone at
previous employer
One-off award of shares with a face value of 100 per
cent of salary which will vest on 19 June 2016 subject
to the achievement of performance conditions
The award is subject to the following absolute share
price performance targets to be achieved based on
the average of the 28 day trading price immediate
prior to 19 June 2016:
= 30 per cent of award vesting
• 70p
• 150p = 100 per cent of award vesting
Notes to the policy table
Performance measure selection and approach to target setting
The performance metrics that are used to assess performance under the annual bonus are selected by the Remuneration
Committee each year to incentivise the delivery of financial performance and key role specific strategic objectives. Profit is
typically used as the measure of financial performance as this key underlying measure of financial success for the business on an
annual basis.
The Committee regularly reviews the LTIP performance measures to ensure they are aligned with the Company’s long-term
strategy and shareholders’ interests. The current measures of EPS growth and FCF have been selected as EPS growth focuses
executives on real profit growth, which is strongly aligned with value creation and FCF focuses on ensuring the Company has the
cash available to pursue opportunities that enhance shareholder value.
Targets for both the annual bonus and LTIP are reviewed annually against a number of internal and external reference points. They
are set on a sliding scale at levels the Committee considers to be appropriately stretching for the level of award delivered.
Remuneration policy for employees
The remuneration policy for Executive Directors in general is more heavily weighted towards variable pay than for other employees
as not all employees participate in an annual bonus plan and LTIP awards are only made to the most senior individuals in the Group.
However, the process or reviewing salaries and Directors’ fees is applied on a consistent basis across the Group and the key
principles of providing remuneration that is appropriate to attract, retain, motivate and reward employees to deliver the Group’s
strategic plan without paying more than is necessary applies to all employees as well as Executive Directors.
Remuneration scenarios for Executive Directors
The charts below show how the composition of Executive Directors’ remuneration packages as set out in the policy table may vary
based on the following three performance scenarios:
Performance scenario
Basis of valuation
Minimum performance (below threshold)
Fixed pay only – base salary, Directors’ fee, benefits and pension
Target performance
Fixed pay, plus bonus at target performance and 25 per cent vesting under the LTIP
Maximum performance (all performance conditions met)
Fixed pay, plus maximum bonus and full vesting under the LTIP
€2,500,000
LTIs
Annual bonus
€2,000,000
Fixed
29%
€1,500,000
11%
31%
37%
€1,000,000
37%
12%
28%
30%
€500,000
100%
52%
34%
100%
Target
Maximum
Minimum
60%
39%
Target
Maximum
0
Minimum
Chief Executive Officer
Notes:
1 Fixed remuneration comprises
of base salary, benefits and
pension contributions.
2 At target performance it is
assumed that 80 per cent of
salary is earned for the Chief
Executive and 60 per cent
of salary for the Finance Director.
3 At target performance it is
assumed that 25 per cent
of the maximum LTIP award vests.
4 Excludes the benefit of the
one-off phantom share award
with a face value of £500,000.
Chief Finance Officer
Remuneration policy for Non-Executive Directors
The Chairman and Non-Executive Directors do not have service contracts and their appointment may be terminated at any time
without compensation. Non-Executive Directors are appointed for specified terms of three years and their appointments are
reviewed at the end of each three-year term.
and related matters
Details of the policy on fees paid to our Non-Executive Directors are set out in the table below:
Component and objective
Approach
Fees
To attract and retain Non-Executive Directors of the highest calibre with
broad commercial experience relevant to the Company
The Board determines the fees paid to Non-Executive Directors under
a policy that seeks to recognise the time commitment, responsibility
and technical skills required to make a valuable contribution to an
effective Board
The fees paid are reviewed on an annual basis and set at a level to attract
individuals with the necessary experience and ability to make a significant
contribution to the Group’s activities, while also reflecting the time
commitment and responsibility of the role. Each Non-Executive Director
is also entitled to reimbursement of necessary travel and other expenses
Non-Executive Directors do not participate in any share scheme or annual
bonus scheme and are not eligible to join the Group’s pension schemes
The current fee levels for the Non-Executive Directors is as follows:
= £200,000 per annum
• Chairman
Director base fee = £40,500 per annum
• Non-Executive
fee for Audit Committee Chairman = £6,250 per annum
• Additional
fee for Remuneration Committee Chairman = £6,250
• Additional
per annum
In exceptional circumstances where Non-Executive Directors are required
to commit a significant amount of time above their normal duties additional
fees may be paid
Recruitment policy
When determining the remuneration
package for a new Executive Director, the
Committee will take into account all
relevant factors based on the
circumstances at that time. This may
include factors such as the calibre of the
individual, market practice in the
candidate’s current location or locations
and scope of the role to which they are
being appointed.
Committee will take into account all
relevant factors, which may include: the
form and time horizon of awards, any
performance conditions attaching to the
awards and the likelihood of awards
vesting. The Committee will typically seek
to ‘buyout’ awards on a comparable basis
to those which have been forfeited with
the intention that the value awarded
would be no higher than the expected
value of the forfeited arrangements.
Typically, the package will be aligned with
the Company’s remuneration policy set
out above. However, should there be a
commercial rationale for doing so the
Remuneration Committee has the
discretion to include any other
remuneration elements that are not
included in the ongoing remuneration
policy, subject to the overall limit on
variable remuneration set out below. The
Committee does not intend to use this
discretion to make non-performancerelated incentive payments and is always
mindful of the need to pay no more than
is necessary.
The maximum level of variable
remuneration that may be granted to a
new Executive Director on appointment
(excluding any ‘buyout’ of forfeited
awards discussed above) will be 300 per
cent of salary as set out in the policy
table for current Executive Directors.
To help facilitate the appointment of an
individual the Remuneration Committee
may need to make awards to ‘buyout’ an
external candidate’s remuneration
arrangements, which are forfeited as a
result of leaving their previous employer
or appointment. In doing so, the
Where an individual is promoted to an
Executive Director position from within
the Company, remuneration
commitments made prior to the
appointment as Director will continue on
their original terms, provided such
commitment was not made in
contemplation of such individual being
appointed as an Executive Director.
The remuneration package for a newly
appointed Non-Executive Director would
be in line with the structure set out in the
policy table for Non-Executive Directors.
Service contracts and exit
payment policy
The current CEO has a service contract
and a letter of appointment under which
employment can be terminated either by
the CEO or the Company giving 12 months’
notice. The current CFO has a service
contract under which employment can be
terminated by the Company giving 12
months’ notice or the CFO six months’
notice. For any new Executive Directors
the Board’s policy is for service contracts
to have a 12-month notice period for both
the Company and the executive.
The Company may elect to terminate
Executive Directors’ service contracts by
making payments in lieu of notice that
will not exceed 12 months’ salary and
benefits, which can also include, but not
limited to, pension, outplacement,
settlement agreement, non-complete
agreements and legal fees. The Company
may at its discretion reduce the payment
to take into account the receipt of a lump
sum and mitigation.
Unless an executive is terminated for
cause, a payment may be made in respect
of their bonus opportunity on a pro-rated
basis, taking into account employment law
in non-UK jurisdictions where relevant to
the individual, the proportion of the
financial year for which they were employed
and subject to the performance achieved.
The table below provides a summary of how awards under the LTIP are typically treated in specific circumstances, with the final
treatment remaining subject to the Committee’s discretion as provided under the rules of the plan:
Reason for cessation of employment
Default treatment
Termination for cause
Awards lapse upon cessation of employment
‘Good leaver’ which includes: death, ill-health, injury, disability or any other
reason as determined by the Committee
If an individual leaves during the performance period awards the level of
award to be received will be determined at the end of the performance
period subject to the achievement of the performance conditions and
pro-rated for time served. Awards will then be released at the normal
release date
If an individual leaves after the end of the performance period but before
the release date the level of award determined at the end of the performance
period will be released at the normal release date
In the case of death, the Committee may deem the performance period to
end at an earlier date and awards released immediately
Change of control
Statement of consideration of
shareholder views
The Remuneration Committee considers
shareholder feedback received in relation
to the Annual General Meeting each year
and guidance from shareholder
representative bodies more generally.
This feedback, plus any additional
feedback received from time to time, is
then considered as part of the Company’s
annual review of remuneration.
Consideration of conditions elsewhere in
the Company
The Committee does not consult with
employees specifically on executive
remuneration policy. However, when
reviewing or amending remuneration
arrangements the Committee considers
pay practices across the Company,
including the salary increases applying
across the rest of the business in the
relevant market. The Committee also
takes into account the impact on the
behaviour of employees more widely and
the views of all relevant stakeholders.
Awards will vest upon the change of control subject to performance
at that time and pro-rated for time served unless the Committee
determines otherwise
Payments in relation to existing
remuneration arrangements
The Remuneration Committee reserves
the right to make any remuneration
payments and payments for loss of office
(including exercising any discretions
available to it in connection with such
payments) notwithstanding that they are
not in line with the policy set out above
where the terms of the payment were
agreed:
•
•
before the policy came into effect or
at a time when the relevant individual
was not a Director of the Company
and, in the opinion of the Committee,
the payment was not in consideration
for the individual becoming a Director
of the Company.
For these purposes ‘payments’ includes
the Committee satisfying awards of
variable remuneration and, in relation to
an award over shares, the terms of the
payment are ‘agreed’ at the time the
award is granted.
Annual report on remuneration Role and
operation of the Remuneration
Committee
The Remuneration Committee decides
both the structure and level of Executive
Directors’ pay and the remuneration of
the Chairman. The remuneration of
Non-Executive Directors is a matter
reserved for the Chairman and the
Executive Directors and no Director is
involved in setting their own
remuneration. The full terms of reference
can be found on the Company’s website
www.dartygroup.com.
The following Directors were members of
the Committee during the year:
•
•
•
Alan Parker
Michel Léonard (Chairman)
Pascal Bazin
Remuneration decisions are made on the
advice of or proposals prepared by the
Remuneration Committee and the
Company. The Chief Executive is invited
to attend meetings of the Committee
when appropriate.
and related matters
The Company Secretary is the Secretary to the Committee. In addition, in making its decisions, the Committee has had access to
the relevant external advisers appointed by the Remuneration Committee and the Company.
Deloitte LLP was formally appointed by the Remuneration Committee as its independent external adviser in September 2012. The
total fees paid to Deloitte in respect of services to the Committee were ¤44,500. Deloitte LLP has not provided any other services
to the Company in financial year 2015. Deloitte are a founding member of the Remuneration Consultants Group and are signatories
to the Code of Conduct in relation to Executive Remuneration Consulting in the UK. The Remuneration Committee, following its
annual review, is satisfied that Deloitte LLP has been independent and objective when providing their advice during the year.
Total remuneration (audited)
The table below sets out a single figure for the total remuneration earned by each Executive Director during the year to 30 April
2014 and for the prior year:
Salary and fees
(¤)
2015
2014
Executive
Taxable benefis
(¤)
2015
2014
Bonus
(¤)**
2015
2014
LTIP
(¤)
2015
2014
Pension
contributions (¤)
2015
2014
Total
(¤)
2015
2014
Régis
Schultz
653,069
594,248
26,187
29,344
242,923
694,732
0
0
82,057
59,425
1,004,236
1,377,749
Dominic
Platt
556,685*
519,095*
29,847
27,417
163,486
285,102
0
0
0
0
750,018
831,614
* These amounts includes a salary supplement in 2015 of ¤92,781 (2014: €90,643) in lieu of a pension contribution.
** 50 per cent of this amount was deferred in shares for a three year period.
Base salary and Directors’ fee
As Chief Executive Régis Schultz received a base salary and fees totalling £507,500 (€653,069), for the year. Dominic Platt
received a base salary of £360,500 and had no increase from last year. The euro increase reflects the change in £/€ exchange
rate. Régis Schultz did not receive an increase in salary from 1 May 2015.
Taxable benefits
The Executive Directors received taxable benefits during the period, including a car allowance, private medical insurance and
life insurance.
Provision for retirement
The Company made payments of 20 per cent of salary (capped at £60,000 for the CEO) to the executives during the year.
Payments are made into a defined contribution plan up to £50,000 with any additional amount paid as a cash supplement.
As Dominic Platt has reached his lifetime allowance, he received a cash supplement of 20 per cent of salary.
Annual bonus in respect of 2014/2015 performance
The bonus for financial year 2015 was based on profit before tax, and role-specific strategic objectives that are closely aligned to
the achievement of the corporate plan as set out in the table below. Bonuses are also subject to an underpin related to return on
capital employed and free cash flow which were met.
Summary of bonus earned
Régis Schultz
Performance measure
Adjusted PBT
% base
salary
Min
performance
Target
performance
Max
performance
Payout
(% salary)
85%
0%
Mistergooddeal.com integration
5%
0%
Franchise/Kitchen Corner rollout
5%
5%
Improve BCC profitability
5%
5%
Improve Customer satisfaction score
12.5%
12.5%
Improve Employee satisfaction score
12.5%
12.5%
125.0%
35.0%
Total
Dominic Platt
Performance measure
% base
Min
salary performance
Adjusted PBT
Target
performance
Max
performance
Payout
(% salary)
40%
0%
BCC profitability
10%
10%
Vanden Borre profitability
10%
6.5%
Improve average DSO/DPO
20%
10%
London transition
10%
0%
Improve Employee satisfaction score
Total
10%
6.66%
100%
33.16%
Deferral of bonus
50 per cent of bonuses from 2014 and 2015 are deferred into shares.
Executive
2015
2014
Régis Schultz
123,350
370,010
Dominic Platt
85,013
175,203
LTIP
The LTIP awards made in June 2012 did not vest as the performance targets were not met.
Single total figure of remuneration for Non-Executive Directors
The table below sets out in a single figure the total remuneration for the Non-Executive Directors for the financial year:
12 months
to 30 April
2015
12 months
to 30 April
2014
€257,367
¤237,699
€52,117
¤48,134
€52,117
¤48,134
Eric Knight*
€20,133
¤48,134
Michel Léonard
€60,160
¤55,562
Antoine Metzger
€52,117
¤48,134
€60,160
¤55,562
€52,117
¤48,134
Director
Alan Parker
Pascal Bazin
Alison Reed
Agnès Touraine
* Mr Knight resigned as a Director on 18 September 2014
The Directors received no increase in their fees. The change reflects the movement in the £/€ exchange rate.
LTIP awards made in financial year 2015 (audited)
LTIP awards were made in September 2014 to both Executive Directors. Awards were made in the form of conditional shares,
subject to performance over three consecutive financial years. Awards will vest 50 per cent three years following the date of grant
and 50 per cent four years following the date of grant.
Director
Award
date
Face value
(% salary)
Number
of shares
Performance
period ends
Vesting date
Régis Schultz
15.09.2014
100%
648,004
30.04.17
50% on 15.09.2017
50% on 15.09.2018
Dominic Platt
15.09.2014
80%
373,769
30.04.17
50% on 15.09.2017
50% on 15.09.2018
The awards are subject to the following performance measures and targets:
Measure
Weighting
Year 3 targets
EPS
70%
Min = 8.52 cents
Max = 14.06 cents
Free cash flow
30%
Min = ¤84.6m
Max = ¤139.7m
and related matters
For achieving the minimum target 0 per cent of the awards will vest, with straight-line vesting between the minimum and maximum
performance targets.
Payments to past Directors (audited)
There were no payments made to past Directors during the year.
Payments for loss of office (audited)
On his departure from the Group on 30 June 2015 and in line with his contract of employment it has been agreed that Dominic
Platt will receive a lump sum, including Statutory Redundancy Pay of £113,237.50. Between the date of his departure and his
commencing full time employment, until April 2016 he will receive a monthly gross sum of £37,745.83. He will be considered as a
good leaver under the Long Term Incentive Plan and Group Bonus arrangements.
Statement of Directors’ shareholding and share interests (audited)
Outstanding interests under share schemes
The table below provides details of Directors’ interests in outstanding share awards:
Name
Date of grant
At start
of year
Granted
during
the year
Vested
during
the year
Lapsed
during
the year
At end of
the year
Vesting date
Lapse date
24/06/2012
161,034
0
0
0
161,034
24/06/2015
21/12/2015
17/09/2013
316,333
0
0
0
316,333
50% – 16/09/2016
50% – 16/09/2017
50% – 16/03/2017
50% – 16/03/2018
15/09/14
0
373,769
0
0
373,769
50% – 15/09/2017
50% – 15/09/2018
50% – 16/03/2018
50% – 16/03/2019
19/06/2013
775,193*
0
0
0
775,193
19/06/2016
19/12/2016
17/09/2013
666,666
0
0
0
666,666
50% – 16/09/2016
50% – 16/09/2017
50% – 16/03/2017
50% – 16/03/2018
15/09/14
0
648,004
0
0
648,004
50% – 15/09/2017
50% – 15/09/2018
50% – 16/03/2018
50% – 16/03/2019
Dominic Platt
Régis Schultz
* One-off share award.
As part of the terms of his appointment, the Chief Executive received a one-off phantom share award equivalent to 100 per cent
of his total salary and fees (i.e. a face value of £500,000) in recognition of remuneration foregone as a result of leaving his
previous employer.
This award vests after a period of three years, subject to the achievement of the following share price targets and continued
employment:
%
of award vesting
Share price target
70p
30%
150p
100%
The award will vest on a straight-line basis between 70p and 150p.
Notes
Awards made in June 2012
First year award
Target
Actual
Conditional vesting
EPS
7.4 cents per share
2.5 cents per share
0%
FCF
¤85.9m
¤39.4m
0%
Second year award
Target
Actual
Conditional vesting
EPS
12.2 cents per share
6.4 cents per share
0%
FCF
¤114.0m
¤85.4m
0%
Third year award
Target
Actual
Conditional vesting
EPS
15.8 cents per share
5.8 cents per share
0%
FCF
¤120.0m
¤70.0m
0%
Awards made in September 2013
First year award
Minimum Target
Actual
Conditional vesting
EPS
4.8 cents per share
6.4 cents per share
Yes
FCF
¤69.3m
¤85.4m
Yes
Second year award
Target
Actual
Conditional vesting
EPS
5.3 cents per share
5.8 cents per share
38.85%
FCF
¤77.25m
¤70.0m
0%
Weighting
Year 3 targets
Award made in September 2014
Measure
EPS
70%
Min = 8.52cents To be measured on the
Max = 14.06 cents
2016/17 results
Free cash flow
30%
Min = ¤84.6m To be measured on the
Max = ¤139.7m
2016/17 results
Shareholding guidelines
Shareholding guidelines are in place that encourage Executive Directors to build up a holding in Darty plc shares based on a
percentage of base salary over a period of five years. The table below provides details of these guidelines and executives’
current holdings in respect of the guidelines, taking into account LTIP and deferred shares.
Guideline
% of salary held at
30 April 2015
Régis Schultz
150% of salary
50.0%
Dominic Platt
100% of salary
6.2%
Director
Directors’ interests
The beneficial interests of the Directors, which include holdings by their spouses or other related parties, together with
non-beneficial interests in the ordinary shares of the Company, are shown in the table below.
Director
30 April
2015
30 April
2014
Régis Schultz
339,000
339,000
Dominic Platt
30,000
30,000
459,000
459,000
Pascal Bazin
25,000
25,000
25,000
25,000
Michel Léonard
30,000
30,000
Antoine Metzger
25,000
25,000
Alan Parker
Alison Reed
20,000
20,000
Agnès Touraine
40,000
40,000
and related matters
Review of past performance
Historical TSR performance
The following performance graph shows the Total Shareholder Return (‘TSR’) for Darty versus the FTSE 350 General Retailer Index
for the period 30 April 2009 to 30 April 2015. The Committee believes that the FTSE 350 General Retailer Index is an objective
comparator group for measuring the Company’s TSR and provides a transparent and accessible method of gauging performance.
TSR
(rebased to 100)
FTSE 350 General Retailers
Darty
300
250
200
150
100
50
0
Apr 09
Apr 10
Apr 11
Apr 12
Apr 13
Apr 14
Apr 15
CEO single figure of remuneration
The table below shows the total remuneration figure for the CEO over the same six-year period. The total remuneration figure
includes the annual bonus and LTIP awards that vested based on performance in those years. The annual bonus and LTIP
percentages show the payout for each year as a percentage of the maximum.
Single total figure
Annual bonus (%)
LTIP vesting (%)
2010
2011
2012
2013
Thierry
FalquePierrotin
Thierry
FalquePierrotin
Thierry
FalquePierrotin
Thierry
FalquePierrotin
Dominic
Platt*
¤2,381,978 ¤1,468,774 ¤1,936,906
2014
2015
Régis
Schultz**
Régis
Schultz
Régis
Schultz
¤770,489
¤277,627
¤13,898
¤1,377,749
¤1,004,236
95%
15%
0%
0%
57%
0%
91%
35%
–
–
100%
0%
0%
0%
0%
0%
* Single figure represents payments made in respect of the four-month period in which Dominic Platt was acting CEO. It is based on salary paid during this period
and the total value of benefits, pension and bonus paid in respect of the year on a pro-rated basis.
** Single figure represents payments made while CEO during the year from 23 April 2013 to 30 April 2013.
Percentage change in remuneration for the CEO in comparison to other employees
The table below shows the percentage change in salary, benefits and bonus earned between 30 April 2014 and 30 April 2015 for the
CEO compared to the average percentage change of all French employees as this population represents the majority of the workforce.
Salary
Benefits
Bonus
CEO
1.5%
(17.6)%
(67.7)%
All employee average
1.5%
0%
(4)%
2014
¤m
2015
¤m
%
Change
586.2
585.5
(0.1)
18.0
18.4
2.2
Relative importance of spend on pay
The table below shows the total pay for all employees compared to other key financial indicators.
Total employee expenditure
Shareholder distributions (dividends and share buy backs)
The increase in dividends is caused by the £/€ exchange rate.
Shareholder voting
At the AGM in September 2014, the Directors’ remuneration report received the following votes from shareholders:
Number of
votes for
cast
of votes
votes cast
Votes for
311,056,130
92.92%
Votes against
23,715,980
7.08%
Total votes cast (excluding withheld votes)
334,772,110
100.00%
Votes withheld
87,202,839
%
Remuneration policy for financial year 2015/16
The following provides details of how the remuneration policy will be implemented in financial year 2015/16.
Base salary and fees
Executive Directors’ base salaries and fees with effect from 1 May 2015 are as follows:
Current
2014
%
change
Régis Schultz
£507,500
£507,500
0
Dominic Platt
£360,500 £360,500
0
Taxable benefits, pension and bonus
These will be paid in line with the remuneration policy.
LTIP awards
Awards will be made in line with the remuneration policy for the LTIP. The performance measures and targets for awards to be
made in September 2015 are detailed below:
Weighting
Threshold vesting
(25% of the award)
Maximum vesting
(100% of the award)
EPS
70%
10% growth p.a.
30% growth p.a.
Free cash flow
30%
10% growth p.a.
30% growth p.a.
Measure
Performance will be assessed over three financial years but awards will not be released to participants until 50 per cent four years
following the date of grant and 50 per cent five years following the date of grant.
It should be noted that the stretch of these targets has been set in the context of the Company being in a turnaround phase and
their appropriateness will be reviewed again next year.
Non-Executive Directors’ fees
For 2015 these will be as set out in the policy report.
Annual Bonus 2015/16
Awards will be made in line with the remuneration policy for the annual bonus. Régis Schultz has a maximum opportunity of
125 per cent of salary and Albin Jacquemont will normally have a maximum opportunity of 100 per cent of salary. Albin’s
opportunity for 2015/16 has been increased on a pro-rated basis to reflect the fact he joined the Company 2 months prior to the start
of the financial year and did not receive any bonus for this period. As a result his maximum annual bonus opportunity for 2015/16 will
be 117 per cent of base salary.
The proportion of the bonus that will be subject to PBT performance will remain the same as in 2014/15 (75 per cent of the
maximum opportunity). The remainder of the bonus will be subject to a range of individual and strategic objectives.
By Order of the Board
Simon Enoch
Secretary
17 June 2015
Registered Office:
22-24 Ely Place
London EC1N 6TE
Statement of Directors’ responsibilities
Directors’ responsibilities
The Directors are responsible for
preparing the Annual report, the
Directors’ remuneration report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the
Directors have prepared the Group
International Financial Reporting
Standards (IFRSs) as adopted by the
European Union, and the parent Company
United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards and applicable
law). In preparing the Group financial
statements, the Directors have also
elected to comply with IFRSs, issued by
the International Accounting Standards
Board (IASB). Under company law the
Directors must not approve the financial
statements unless they are satisfied that
they give a true and fair view of the state
of affairs of the Group and the Company
and of the profit of the Group for that
period. In preparing these financial
statements, the Directors are required to:
The Directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Company and the
Group and enable them to ensure that
the financial statements and the
Directors’ remuneration report comply
with the Companies Act 2006 and, as
regards the Group financial statements,
Article 4 of the IAS Regulation. They are
also responsible for safeguarding the
assets of the Company and the Group
and hence for taking reasonable steps
for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the
maintenance and integrity of the
Company’s website. Legislation
in the United Kingdom governing the
preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
Each of the Directors, whose names
and functions are listed in the Directors
and advisers section, pages 28 and 29
confirm that, to the best of their
knowledge:
•
•
•
•
•
select suitable accounting policies and
then apply them consistently;
make judgements and accounting
estimates that are reasonable and
prudent;
state whether IFRSs as adopted by the
European Union and IFRSs issued by
IASB and applicable UK Accounting
Standards have been followed, subject
to any material departures disclosed
and explained in the Group and Parent
Company financial statements
respectively; and
•
prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
the Group financial statements, which
have been prepared in accordance
with IFRSs as adopted by the EU, give
a true and fair view of the assets,
liabilities, financial position and profit
of the Group, and
the Directors’ report contained on
pages 30 to 33 includes a fair review
of the development and performance
of the business and the position of the
Group, together with a description of
the principal risks and uncertainties
that it faces.
In accordance with Section 418,
Directors’ reports shall include a
statement, in the case of each Director
in office at the date the Directors’
report is approved, that:
(a)so far as the Director is aware,
there is no relevant audit information
of which the Company’s auditors
are unaware; and
(b)they have taken all the steps
that they ought to have taken
as a Director in order to make
themself aware of any relevant
audit information and to establish
that the Company’s auditors are
aware of that information.
The Directors consider that the Annual
report and accounts, taken as a whole, is
fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Company’s
performance, business model and
strategy.
Independent auditors’ report to the members of Darty plc
Report on the group financial statements
Our opinion
In our opinion, Darty plc’s group financial statements (the ‘financial statements’):
•
•
•
give a true and fair view of the state of the group’s affairs as at 30 April 2015 and of its profit and cash flows for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the
European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
What we have audited
Darty plc’s financial statements comprise:
•
•
•
•
•
the Group balance sheet as at 30 April 2015;
the Group income statement and statement of comprehensive income for the year then ended;
the Group cash flow statement for the year then ended;
the Group statement of changes in equity for the year then ended; and
the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the Annual report, rather than in the notes to the financial
statements. These are cross-referenced from the financial statements and are identified as audited.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and IFRSs
as adopted by the European Union.
Our audit approach
Overview
Materiality
Audit scope
Area of focus
•
•
•
•
•
•
•
•
Overall group materiality: €3.7 million which represents 5% of Group retail profit.
We conducted audit procedures in France, Belgium, the Netherlands and at the UK head office. The
locations where we performed audit work accounted for 100% (2014: 100%) of group revenues and 100%
(2014: 100%) of group retail profit.
Carrying value of leasehold properties in France
Going concern – compliance with debt covenants
Inventory valuation
Accounting for supplier rebate arrangements
Estimation of tax provisions
Defined benefit pension plan liabilities
The scope of our audit and our areas of focus
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (‘ISAs (UK & Ireland)’).
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we
also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by
the directors that represented a risk of material misstatement due to fraud.
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and effort,
are identified as ‘areas of focus’ in the table below. We have also set out how we tailored our audit to address these specific areas
in order to provide an opinion on the financial statements as a whole, and any comments we make on the results of our procedures
should be read in this context. This is not a complete list of all risks identified by our audit.
continued
Area of focus
Carrying value of leasehold properties in France
Refer to page 36 for the Audit Committee Report and Note 1 (Accounting
policies), Note 11 (Exceptional items) and Note 13 (Property, plant and
equipment) to the financial statements.
We included the carrying values of assets related to leasehold property in
France as a significant risk principally due to the magnitude of the balance
(€184.4 million as at 30 April 2015) and the continued economic uncertainty
in France. The socioeconomic conditions are changing consumption
patterns in the electricals market, as well as increasing pressure on
margins, resulting in the risk that the value of the assets may be impaired.
Management has impaired the carrying value of these assets by €11.2
million in the year and there is a risk that this impairment charge could be
over or understated.
How our audit addressed the area of focus
We assessed the exercise carried out by management to determine whether
impairment reviews were required at the individual store level, including
confirmation of the appropriateness of management’s defined cashgenerating units (CGUs). From this assessment and comparison to other
retailers, we confirmed that it is appropriate to carry out the reviews at the
individual store level.
We assessed the impairment models prepared by management and
challenged the data used in the models and assumptions, including forecasts
and projections, remaining sceptical of explanations and obtaining evidence
for key assumptions. The inputs into the model are consistent with the
Group’s Board approved budget and forecasts and we have obtained
corroborating evidence for the key assumptions used.
We concluded, based on our understanding of the Group, that the models
used are appropriate and we verified the accuracy of the calculations within
them.
We reviewed management’s sensitivity analysis and considered further
realistic sensitivity to key assumptions and underlying cash flows.
We were satisfied no further impairments were required.
Going concern – compliance with debt covenants
policies) and Note 2 (Financial risk management) to the financial statements.
We evaluated management’s going concern assessment including the latest
profit forecast, projected future cash flows and projected bank covenants for
the period of 24 months from April 2015.
We focused on the Directors’ conclusion that it is appropriate to adopt
the going concern basis in preparing the financial statements because the
performance of the business has been lower than budgeted, resulting in a
reduction in the headroom against the debt covenants.
We tested the assumptions used in the forecasts and the covenant
calculations, including challenging and performing sensitivity analyses on the
key assumptions used in the profit and cash forecasts.
The Group has €242 million of revolving credit facilities. The Group’s
debt covenants relate to maintaining a certain level of net debt and interest
cover compared to earnings before interest, tax, depreciation and
amortisation and maintaining a ratio of earnings before depreciation
and rent to rent and interest. Compliance with these covenants is thus
driven largely by business performance.
We also considered the likelihood of a covenant breach taking into account
the effect of a change in the assumptions, available mitigating factors and
results of sensitivity analyses.
We discussed with the Directors the actions that they considered they could
take to alter the timing and/or amount of future cash flows and used our
knowledge of the business to consider the feasibility and likely impact of the
Directors’ intentions.
Our conclusion on going concern is set out below.
Inventory valuation
policies) and Note 16 (Inventories) to the financial statements.
Inventory is the largest asset on the group’s balance sheet (€457 million
as at 30 April 2015). The ongoing economic situation within the electricals
market continues to create competition due to the pressures on pricing.
This could result in an increased level of inventory identified for markdown
within the Group. As such there is a risk that the realisable value of
inventory will be lower than its recorded cost.
We tested the valuation of inventory through a combination of testing the
systems and cost inputs that drive the valuation and then assessing the
judgements that have been made by management to adjust that valuation,
such as inventory provisions.
We evaluated the relevant IT systems and tested the controls over the
inventory valuation process including the ageing of inventory. We concluded
that we could place reliance on the inventory controls for the purposes of
our audit.
We compared the purchase price for a sample of inventory items within cost
of sales to a sample of supplier invoices and also compared this to the latest
sales price of the inventory to ensure that the inventory is recorded at the
lower of cost and net realisable value. All items could be agreed to underlying
supporting documentation and were appropriately valued at the lower of cost
and net realisable value.
We compared a sample of the other cost adjustments, for example the
inclusion of warehouse costs, included within the inventory valuation back
to supporting documentation and verified these costs were allowable under
accounting standards. From the testing performed no exceptions were noted.
We also assessed the reasonableness of the judgements involved in the yearend mark down provisions applied to the year-end inventory valuation. This
was achieved through comparing the provisions against the prior year and
assessing the provision against the ageing of inventory by category,
as well as our knowledge of the business. We deemed the judgements
involved appropriate.
Area of focus
Accounting for supplier rebate arrangements
policies) to the financial statements.
The Group receives rebates from its suppliers and this remains an area of
focus due to the quantum of income recorded under these arrangements
and its significance in relation to the result for the period. It is also an area
of heightened focus in light of recent market announcements. The amount
to be recognised in the income statement for elements of rebate income
requires management to apply judgement based on the contractual terms
in place with suppliers and estimates of amounts the Group is entitled to
where transactions span the financial year end.
The Group negotiates and agrees the contracts with suppliers, and then has
to determine income to be recorded based on interim payments received
during the year and estimates provided by suppliers for amounts due at the
year end. The key judgement that we therefore focus on in the calculation of
the Group’s rebates from suppliers is the amount to be accrued at the year
end, based on volume estimates.
Estimation of tax provisions
policies), Note 7 (Continuing Group Income tax expense) and Note 24
(Provisions) to the financial statements.
As a result of ongoing tax audits in France, there has been an increase in
potential tax exposure and therefore judgement involved in determining the
level of provisions required.
How our audit addressed the area of focus
We read a sample of contractual agreements with the suppliers to understand
the rebate mechanisms in place and assessed whether rebates received, and
receivable, by the Group have been accounted for in the correct financial
period and in accordance with the specific terms of these agreements. From
inspection of a sample of these agreements we determined that the terms
and conditions had been appropriately considered in the calculations of
rebates receivable.
For a sample, we vouched the actual cash rebates received during the year
and compared against the prior year estimate to assess the accuracy of the
estimation process. We determined that the level of current period receipts
supported the assumptions around collectability of prior period rebates
receivable.
We tested the year-end supplier rebate calculations and compared these
against the contractual agreements as well as against the prior year to
understand the movement year on year. We did not identify any significant
differences between the re-calculations we performed and the amounts
recognised.
We performed detailed testing of the Group tax charge and provision
calculations. We tested the rates applied to calculation provisions by
comparing to publicly available information.
We reviewed external evidence, where possible, to support management’s
position regarding certain exposures. We utilised local tax experts in France
and challenged the level of provisions against the total potential exposures.
We found that the judgements made by management were consistent with
our views and the audit evidence we had obtained.
Defined benefit pension plan liabilities
policies) and Note 32 (Retirement benefits) to the financial statements.
We focused on this area because of the impact of the defined benefit
pension plan liability to the overall balance sheet and judgements inherent
in the actual assumptions involved in the valuation. The net pension
liability at 30 April 2015 was €103.4 million (2014: €104.6 million). The
Group’s pension liabilities continue to be sensitive to changes in actuarial
assumptions, which require significant judgement and technical expertise.
We reviewed the pension assumptions, including discount rates, salary
increases, inflation, and mortality, utilising our specialist knowledge of
pensions. We considered and challenged the reasonableness of the actuarial
assumptions comparing the discount and inflation rates used to our internally
developed benchmark ranges, finding them to be within an acceptable range.
We confirmed that the valuation methods had been consistently applied
against the prior year.
We obtained confirmations of plan assets from third parties and found them
to be in agreement with the underlying records.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the geographic structure of the group, the accounting processes and controls, and the
industry in which the group operates.
The group is structured across two geographic segments, being: France; and Belgium (New Vanden Borre) and the Netherlands
(BCC). The group financial statements are a consolidation of reporting units that make up these two segments.
The group’s accounting process is structured around a local finance function in each of the territories in which the group operates.
At a group level, a separate finance team consolidates the reporting packs of France, Belgium, the Netherlands, the central
functions and discontinued operations.
In our view, due to their significance and/or risk characteristics, the businesses in France and Belgium required an audit of their
complete financial information. We used component auditors from PwC and non-PwC firms who are familiar with the local laws and
regulations in each of the identified territories to perform this work.
Specific audit procedures were also performed in the Netherlands based on the areas of risk identified at this location.
Where the work was performed by component auditors, we determined the level of involvement we needed to have to be able to
conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the group financial
statements as a whole. The group engagement team visited France and New Vanden Borre head offices given the significance of
these locations to the group and attended clearance meetings between local management and the component auditors, either in
person or by call.
The group consolidation, financial statement disclosures and a number of complex items were audited by the group engagement
team at the UK head office. These included pensions, tax and share-based payments.
Taken together, the territories and functions where we performed our audit work accounted for 100 per cent of group revenues and
100 per cent of group retail profit.
continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality
€3.7 million (2014: €4.1 million).
How we determined it
5% of Group retail profit. Retail profit is defined as ‘total operating profit before the
share of joint venture and associates’ interest and taxation, movement in options and
related charges over non-controlling interests, gain on disposal of available-for-sale
investments, legacy UK retirement benefit scheme expenses, exceptional items and
amortisation and impairment of acquisition related intangible assets’.
Rationale for benchmark applied
We believe that retail profit is a key indicator for the Group as it excludes exceptional
items and therefore relates solely to the trading performance of the ongoing business
and is a measure used by the shareholders.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €200,000
(2014: €200,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Going concern
Under the Listing Rules we are required to review the directors’ statement, set out on page 36, in relation to going concern.
We have nothing to report having performed our review.
As noted in the directors’ statement, the directors have concluded that it is appropriate to prepare the financial statements using
the going concern basis of accounting. The going concern basis presumes that the group has adequate resources to remain in
operation, and that the directors intend it to do so, for at least one year from the date the financial statements were signed. As
part of our audit we have concluded that the directors’ use of the going concern basis is appropriate.
However, because not all future events or conditions can be predicted, these statements are not a guarantee as to the group’s
ability to continue as a going concern.
Other required reporting
Consistency of other information
Companies Act 2006 opinion
In our opinion, the information given in the Strategic Report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
ISAs (UK & Ireland) reporting
Under ISAs (UK & Ireland) we are required to report to you if, in our opinion:
•
information in the Annual Report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the
group acquired in the course of performing our audit; or
• otherwise misleading.
We have no exceptions to report arising
from this responsibility.
•
the statement given by the directors on page 52, in accordance with provision C.1.1 of the UK Corporate
Governance Code (‘the Code’), that they consider the Annual Report taken as a whole to be fair,
balanced and understandable and provides the information necessary for members to assess the
group’s performance, business model and strategy is materially inconsistent with our knowledge of
the group acquired in the course of performing our audit.
•
the section of the Annual Report on pages 35 and 36, as required by provision C.3.8 of the Code,
describing the work of the Audit Committee does not appropriately address matters communicated
by us to the Audit Committee.
Adequacy of 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. 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.
Corporate governance statement
Under the Listing Rules we are required to review the part of the Corporate Governance Statement relating to the company’s
compliance with nine provisions of the UK Corporate Governance Code. We have nothing to report having performed our review.
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 52, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs
(UK & Ireland). Those standards require us to comply 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 in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is 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
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of:
•
•
•
whether the accounting policies are appropriate to the group’s circumstances and have 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 consider necessary to provide a
reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive
procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent
material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the company financial statements of Darty plc for the year ended 30 April 2015 and on the
information in the Directors’ Remuneration Report that is described as having been audited.
John Ellis (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
17 June 2015
Group income statement
for the year ended 30 April 2015
2015
Revenue
Group operating profit
Share of post tax profit in joint venture and associates
€m
3
3
14
3,512.1
58.9
1.4
3,404.4
51.0
2.4
60.3
53.4
Total operating profit
Analysed as:
Retail profit a)
Share of joint venture and associates’ interest and taxation
Movement in options and related charges over non-controlling interests
Gain on disposal of available-for-sale investments
Legacy UK retirement benefit scheme expenses
Exceptional items
Amortisation and impairment of acquisition related intangible assets
2014
restated(b)
€m
Note
4
14
2
3
11
74.9
(0.9)
–
1.4
(1.3)
(13.7)
(0.1)
85.5
(0.8)
(3.2)
2.7
(1.4)
(29.4)
–
3
60.3
53.4
Finance costs
5
(27.4)
(16.0)
32.9
37.4
7
(17.8)
(26.6)
10
15.1
(1.3)
10.8
(17.4)
Profit before income tax
Taxation
Profit for the year from continuing operations
Loss for the year from discontinued operations
13.8
(6.6)
Profit/(loss) attributable to:
– Owners of the parent
– Non-controlling interests
14.2
(0.4)
(3.4)
(3.2)
13.8
(6.6)
2.9
(0.2)
2.1
(2.7)
2.7
(0.6)
Earnings/(losses) per share – basic and diluted (cents)
Continuing operations
Discontinued operations
Total earnings/(losses) per share
9
Notes
a) Retail profit represents total operating profit before the share of joint venture and associates’ interest and taxation, movement in options and related charges over
non-controlling interests, gain on disposal of available-for-sale investments, legacy UK retirement benefit scheme expenses, exceptional items and amortisation and
b) Restated following the sale of Datart, now classified as discontinued operations, the CVAE reclassification from operating profit to taxation (note 7) and the legacy
UK retirement benefit scheme expenses reclassification from finance costs to operating costs (note 5).
c) The notes on pages 63 to 109 form part of these financial statements.
Group statement of comprehensive income
2015
Note
Profit for the financial year – continuing operations
Loss for the financial year – discontinued operations
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurements of post employment benefit obligations
Tax on other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or loss:
Exchange differences
Fair value gains/(losses) on cash flow hedges
€m
2014
restated(a)
€m
4
15.1
(1.3)
10.8
(17.4)
32
(0.2)
6.7
(25.3)
(1.1)
6.5
(26.4)
(6.4)
0.3
(0.1)
(2.3)
(0.3)
0.1
(6.2)
(2.5)
Other comprehensive income/(expense) for the year
0.3
(28.9)
Total comprehensive income/(expense) for the year
14.1
(35.5)
Attributable to:
– Owners of the parent
– Non-controlling interests
14.8
(0.7)
(34.5)
(1.0)
Total comprehensive income/(expense) for the year
14.1
(35.5)
Notes
a) Restated following the sale of Datart, now classified as discontinued operations, and the CVAE reclassification from operating profit to taxation (note 7).
b) The notes on pages 63 to 109 form part of these financial statements.
Group statement of changes in equity
Share
capital
€m
At 1 May 2014
Demerger and Translation
other reserves
reserve
€m
€m
Total
Accumulated shareholders’
losses
deficit
€m
€m
Non-controlling
interests
€m
Total
deficit
€m
158.9
971.6
14.2
(1,452.0)
(307.3)
(9.6) (316.9)
Profit for the period from continuing operations
Loss for the period from discontinued operations
–
–
–
–
–
–
15.0
(0.8)
15.0
(0.8)
Other comprehensive income/(expense):
Remeasurements of post employment benefit obligations (note 32)
–
–
–
–
–
–
(0.2)
6.7
(0.2)
6.7
–
–
(0.2)
6.7
–
–
–
6.5
6.5
–
6.5
0.1
(0.5)
15.1
(1.3)
Fair value gains/(losses) on cash flow hedges
–
–
–
–
0.3
(0.1)
(6.1)
–
–
–
–
–
(6.1)
0.3
(0.1)
(0.3)
–
–
(6.4)
0.3
(0.1)
Total comprehensive income/(expense) for the period
–
–
0.2
0.2
(6.1)
(6.1)
–
20.7
(5.9)
14.8
(0.3)
(0.7)
(6.2)
14.1
Transactions with owners:
Dividends (note 8)
Employee share schemes
Sale of Company with non-controlling interest
Re-purchase of non-controlling interest
–
–
–
–
–
–
–
–
–
–
–
–
(18.4)
0.4
(2.8)
(9.6)
(18.4)
0.4
(2.8)
(9.6)
(0.6)
–
0.3
9.6
(19.0)
0.4
(2.5)
–
158.9
971.8
8.1
(1,461.7)
(322.9)
At 30 April 2015
Share
capital
Demerger and Translation
other reserves
reserve
(1.0) (323.9)
Total
Total
Accumulated shareholders’ Non-controlling
interests
deficit
losses
deficit
(a)
(a)
restated(a)
restated
restated
€m
€m
€m
€m
€m
€m
€m
At 1 May 2013
158.9
Prior year adjustment in respect of CVAE reclassification (note 7)
–
At 1 May 2013 restated
158.9
971.8
–
971.8
18.7
–
18.7
(1,401.3)
(1.0)
(1,402.3)
(251.9)
(1.0)
(252.9)
(10.9) (262.8)
–
(1.0)
(10.9) (263.8)
Profit for the period from continuing operations
Loss for the period from discontinued operations
–
–
–
–
–
–
10.8
(14.2)
10.8
(14.2)
Other comprehensive income/(expense):
Remeasurements of post employment benefit obligations (note 32)
–
–
–
–
–
–
(25.3)
(1.1)
(25.3)
(1.1)
–
–
(25.3)
(1.1)
–
–
–
(26.4)
(26.4)
–
(26.4)
Fair value losses on cash flow hedges
–
(3.2)
10.8
(17.4)
–
–
–
–
(0.3)
0.1
(4.5)
–
–
–
–
–
(4.5)
(0.3)
0.1
2.2
–
–
(2.3)
(0.3)
0.1
–
(0.2)
(4.5)
–
(4.7)
2.2
(2.5)
Total comprehensive income/(expense) for the period
–
(0.2)
(4.5)
Transactions with owners:
Dividends (note 8)
Re-purchase of non-controlling interest
–
–
–
–
–
–
158.9
971.6
At 30 April 2014
(29.8)
(34.5)
(1.0)
(35.5)
–
–
–
(18.0)
0.4
(2.3)
(18.0)
0.4
(2.3)
–
–
2.3
(18.0)
0.4
–
14.2
(1,452.0)
(307.3)
(9.6) (316.9)
Notes
a) Restated following the sale of Datart, now classified as discontinued operations, and the CVAE reclassification from operating profit to taxation (note 7).
The demerger reserve represents a reserve created on demerger and is non-distributable. Other reserves comprise a reserve
arising from the first time adoption of IAS 39 in February 2006, a redenomination reserve created upon the redenomination
of ordinary shares in September 2010 and the hedging reserve comprising the fair value movements on forward foreign
exchange contracts.
Group balance sheet
As at 30 April 2015
2015
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Available-for-sale financial assets
Other receivables
Deferred income tax assets
16
17
19
Total current assets
21
25
20
23
24
Total current liabilities
Non-current liabilities
Borrowings
Other payables
Deferred income tax liabilities
Retirement benefits
Provisions
68.6
321.2
15.1
1.0
9.7
–
64.3
343.9
15.3
–
11.2
0.3
62.8
369.0
23.9
–
15.3
1.4
415.6
435.0
472.4
456.8
218.3
9.6
86.9
474.2
221.5
4.2
75.5
477.9
197.2
15.4
68.0
12
13
14
15
18
26
Total assets
Liabilities
Current liabilities
Borrowings
Income tax liabilities
Trade and other payables
Derivative financial instruments
Provisions
2013
restated(a)
€m
€m
Total non-current assets
Current assets
Inventories
Trade and other receivables
Income tax receivable
Cash and cash equivalents
2014
restated(a)
€m
Note
21
22
26
32
24
771.6
775.4
758.5
1,187.2
1,210.4
1,230.9
(11.1)
(15.9)
(837.0)
–
(1.8)
(1.5)
(11.4)
(887.4)
(0.3)
(3.7)
(0.3)
(7.5)
(884.0)
–
(14.6)
(865.8)
(904.3)
(906.4)
(297.7)
(223.0)
(20.4)
(103.4)
(0.8)
(259.2)
(227.1)
(30.7)
(104.6)
(1.4)
(218.3)
(241.8)
(42.8)
(84.8)
(0.6)
Total non-current liabilities
(645.3)
(623.0)
(588.3)
Total liabilities
(1,511.1)
(1,527.3)
(1,494.7)
Net liabilities
(323.9)
(316.9)
(263.8)
158.9
979.9
(1,461.7)
158.9
985.8
(1,452.0)
158.9
990.5
(1,402.3)
(322.9)
(307.3)
(252.9)
(1.0)
(9.6)
(10.9)
(323.9)
(316.9)
(263.8)
Equity attributable to owners of the parent
Share capital
Other reserves
Accumulated losses
Total shareholders’ deficit
Non-controlling interests
Total equity
27
Notes
a) Restated following the CVAE reclassification from operating profit to taxation (note 7).
The financial statements on pages 58 to 109 were authorised for issue and approved by the Board of Directors on 17 June 2015 and
signed on its behalf by
Régis Schultz
Director
Dominic Platt
Director
Company registration number: 4232413
Group cash flow statement
2015
Note
Cash flows from operating activities
Cash generated from operations
Interest paid
Tax paid
28
Net cash from/(used in) operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Sale of discontinued operations, including cash and overdrafts disposed
Sale of business operation, including cash and overdrafts disposed
Sale of available-for-sale investments
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Dividends received from associates/joint ventures
35
10
13
12
14
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Dividends paid to shareholders
Dividends paid to non-controlling interests
29
29
8
Net cash from financing activities
Net increase in cash, cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts at start of year
Effects of exchange rate changes
29
29
Cash, cash equivalents and bank overdrafts at end of year
19
€m
2014
restated(a)
€m
60.7
(22.9)
(21.2)
18.4
(21.4)
(9.9)
16.6
(12.9)
(9.8)
10.1
–
1.4
(40.2)
13.9
(10.5)
1.0
5.4
2.6
1.9
2.7
(48.5)
29.7
(13.4)
11.0
(34.1)
(8.6)
49.8
–
(18.4)
(0.6)
390.0
(340.0)
(18.0)
–
30.8
32.0
13.3
10.5
74.0
(0.6)
67.7
(4.2)
86.7
74.0
Notes
a) Restated following the CVAE reclassification from operating profit to taxation (note 7) and the legacy UK retirement benefit scheme expenses reclassification from
finance costs to operating profit (note 5).
Notes to the financial statements
1 Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied in the years presented, unless otherwise stated.
The principal entities included in the consolidated financial statement are shown in note 37. The financial information set out on
pages 58 to 109 comprises the consolidated financial statements of Darty plc for the year ended 30 April 2015 prepared in
accordance with the accounting policies set out below. Darty plc (the Company) is incorporated in Great Britain and registered in
England and Wales. Its registered office is 22-24 Ely Place, London, EC1N 6TE.
Basis of preparation
These consolidated financial statements have been prepared in accordance with EU endorsed International Financial Reporting
Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (‘IFRS IC’) and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared
under the historical cost convention as modified by the revaluation of foreign currency swaps, forward foreign currency contracts,
available-for-sale financial assets, financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss and also on a going concern basis.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements,
are disclosed in this note.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company, its subsidiary undertakings, joint
ventures and associated undertakings. All significant consolidated subsidiary companies have a 30 April accounting year end.
Consolidation
(a) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The cost of an acquisition is measured
as the fair value of the settlement including assets, equity instruments and liabilities incurred or assumed at the date of exchange.
Acquisition-related costs are expensed as incurred. Identifiable assets and liabilities acquired and contingent liabilities assumed in
a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any noncontrolling interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the
difference is recognised directly in the income statement. The Group recognises any non-controlling interest in the acquiree on an
acquisition-by-acquistion basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised
amounts of acquiree’s identifiable net assets.
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from
non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Inter-company transactions including income, expenses, balances and unrealised gains on transactions between Group companies are
eliminated on consolidation. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred.
(b) Associates and joint ventures
Associates are all operations over which the Group has the ability to exercise significant influence but not control, generally
accompanying a shareholding of between 20 per cent and 50 per cent of the voting rights. Joint ventures are all operations over
which the Group exercises joint control with partners.
Investments in associates and joint ventures are accounted for by the equity method. Under the equity method, the investment is
initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss
of the investee after the date of acquisition. The Group’s investment in associates and joint ventures includes goodwill (net of any
accumulated impairment loss) identified on acquisition.
The Group’s share of its associate’s and joint venture’s post-acquisition profits or losses are recognised in the income statement, its
share of post-acquisition valuation movements are adjusted against the carrying amount of the investment and its share of
post-acquisition movements in reserves are recognised in reserves. When the Group’s share of losses in an associate or a joint
venture equals or exceeds its interest in the associate or joint venture, including any other unsecured receivables, the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate or joint venture.
Notes to the financial statements continued
1 Accounting policies continued
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the
Group’s interest in the associates and joint ventures. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s undertakings are measured using the currency of the primary
economic environment in which the undertaking operates (‘the functional currency’). The consolidated financial statements are
presented in Euros, which is the majority of the subsidiaries’ functional currency and the Group’s presentational currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income
statement within finance income or costs. All other foreign exchange gains and losses are presented in the income statement within
operating profit, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are analysed
between translation differences resulting from changes in the amortised cost of the security, and other changes in the carrying
amount of the security. Translation differences are recognised in profit or loss, and other changes in carrying amount are
recognised in other comprehensive income. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are
recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as
equities classified as available-for-sale are included in the fair value reserve in other comprehensive income.
(c) Group companies
The results and financial position of all the Group operations that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(ii) Income and expenses for each income statement are translated at average exchange rates; and
(iii) Resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings
and other currency instruments designated as hedges of such investments are taken to equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
When a foreign operation is sold, exchange differences are recycled to the income statement as part of the gain or loss on sale.
Use of adjusted measures
Darty plc believes that retail profit, adjusted profit before tax, EBITDA and adjusted earnings per share provide additional useful
information on underlying trends and business performance to shareholders. Each is defined below:
•
Retail profit represents total operating profit before the share of joint venture and associate’s interest and taxation, movement
in options and related charges over non-controlling interests, gain on disposal of available-for-sale investments, legacy UK
retirement benefit scheme expenses, exceptional items and amortisation and impairment of acquisition related intangible
assets.
•
•
•
EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and
equipment and intangible assets including write-offs.
Adjusted profit before tax represents retail profit less finance costs excluding net interest on pension schemes.
Adjusted earnings per share exclude the effects of discontinued operations, movement in options and related charges over
non-controlling interests, gain on disposal of available-for-sale investments, legacy UK retirement benefit scheme expenses,
exceptional items, amortisation and impairment of acquisition related intangible assets, net interest on pension schemes and
tax effects of exceptional and other non-retail profit items. A reconciliation of adjusted earnings per share to basic earnings per
share is provided in note 9, ‘Earnings per share’.
A reconciliation from retail profit to GAAP measurement of profit is provided in the Group Income Statement. A reconciliation from
EBITDA to GAAP measurement of profit is provided in note 4, ‘Segmental analysis’.
These measures are used by the Group for internal performance analysis and incentive compensation arrangements for employees.
These terms are not defined by IFRS and may therefore not be comparable with similarly titled profit measures reported by other
companies. They are not intended to be a substitute for, or superior to, GAAP measurements of profit.
Exceptional items
The Group defines exceptional items as those non-recurring items which by their nature or size would distort the comparability of
the Group’s result from year to year. Exceptional items mainly relate to costs associated with a material restructuring (i.e.
termination payments, onerous lease charges, asset impairments and other write offs) or a material change to accounting
estimates which would distort the underlying result.
Segmental information
The Group bases its internal reporting systems on certain reportable segments. These segments are used by the chief operating
decision maker, identified as the Group Chief Executive, for assessing performance and allocating resources.
The reportable segments are as follows:
•
•
France (Darty and Mistergooddeal.com)
Belgium and the Netherlands (Vanden Borre and BCC)
Sales between segments are carried out at arm’s length.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the fair value of consideration over the fair value of the Group’s share of the net identifiable
assets, liabilities, contingent liabilities and fair value of non-controlling interests of the acquired subsidiary or associate at the date
of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is
included in the carrying value of investments in associates and is tested for impairment as part of the overall balance. Separately
recognised goodwill is tested at least annually for impairment or more frequently if events or changes in circumstances indicate a
potential impairment and carried at cost less impairment losses. Impairment losses on goodwill are not reversed. Gains and losses
on the disposal of an operation include the carrying amount of any goodwill relating to the operation sold.
Goodwill is allocated to cash-generating units (‘CGUs’) for the purpose of impairment testing. Each of those CGUs represents a
separate autonomous unit within the Group, where the management of the unit has independent control and responsibility for
managing the cash flow of that unit. In practice these are deemed to be each retail chain of stores acquired.
(b) Other intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment.
(i) Software
Software costs are costs that are directly associated with the development of identifiable and unique software products controlled
by the Group. Where it is probable that they will generate economic benefits exceeding costs beyond one year, they are recognised
as intangible assets. Costs that do not meet the recognition criteria are expensed as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as
intangible assets when the following criteria are met:
•
•
•
•
•
•
it is technically feasible to complete the software product so that it will be available for use;
management intends to complete the software product and use or sell it;
there is an ability to use or sell the software product;
it can be demonstrated how the software product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use or sell the software product
are available; and
the expenditure attributable to the software product during its development can be reliably measured.
Direct costs include the software development, employee costs and an appropriate portion of relevant overheads. Acquired
computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software.
These costs are amortised on a straight-line basis over their estimated useful lives (two to five years).
(ii) Leasehold rights
Amounts paid in order to gain access to certain leasehold premises or a right to trade from a site are recognised as intangible
assets. The value in use of these items is calculated using growth rates and discount factors considered appropriate for the
relevant CGUs. These costs are amortised to their residual value (value in use) over their estimated useful lives (15 to 20 years) on a
straight line basis. If the value in use calculated is greater than carrying value no amortisation charge is recognised.
Property, plant and equipment
Land and buildings comprise mainly retail outlets, warehouses and offices. Fixtures, fittings and equipment comprise tenants’
fixtures and improvements, computers and electronic equipment and motor cars and commercial vehicles. All property, plant and
equipment is stated at historic cost less accumulated depreciation and impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Assets in the course of construction represent the cost of purchasing, constructing and installing property, plant and equipment
ahead of their productive use. They are not depreciated until they are brought into use and transferred to an appropriate and
permanent category of property, plant and equipment on completion of construction, unless there are circumstances indicating an
impairment of the asset, where provision is made immediately.
Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate. These costs are
included in the carrying amounts only when it is probable that future economic benefits associated with an asset will flow to the
Group, the cost of the asset can be measured reliably, the asset’s useful life exceeds one full accounting period and costs exceed
€1,000 (or equivalent). All other repairs and maintenance costs are charged to the income statement during the financial period in
which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost less
estimated residual value over their estimated useful lives. The depreciation periods of the principal categories are as follows:
Land and buildings
Freehold buildings
Long leasehold buildings
Short leasehold buildings
Tenants’ fixtures and improvements
20 years to residual value
20 years or remaining lease term if shorter
over the remaining period of the lease
between five and 20 years
Fixtures, fittings and equipment
Computers and electronic equipment Motor cars and commercial vehicles between two and four years
between two and five years
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount. When properties are sold the difference between the sale proceeds and net book value is recognised in the
income statement.
Impairment of assets
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable, or that the asset’s use may not generate an economic
benefit greater than their carrying value. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (as CGUs). For property, plant and equipment and intangible assets, other than goodwill, the CGU is deemed to be each
trading store. The discount rate applied is based upon the Group’s weighted average cost of capital with appropriate adjustments
for the risks associated with the relevant business.
Any impairment charge is recognised in the income statement in the year in which it occurs. Non-financial assets other than
goodwill that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. Where an
impairment loss, other than an impairment loss on goodwill, subsequently reverses due to a change in the original estimate, the
carrying amount of the asset is increased to the revised estimate of its recoverable amount.
Financial instruments
Financial assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and
available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines
the classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss held for trading: A financial asset is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are categorised as held for trading unless they are designated as
hedges and the hedge is effective for accounting purposes. Assets in this category are classified as current assets.
Financial instruments designated at fair value through profit or loss upon initial recognition: these include financial assets that are
not held for trading purposes, which may be sold, managed and their performance evaluated on a fair value basis in accordance
with the Company’s investment and risk strategy.
Realised and unrealised gains and losses arising from changes in the fair value of financial assets through the income statement
are included in finance costs/income in the income statement in the period in which they arise.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, where they
are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash
equivalents’ in the balance sheet. They are initially recognised at fair value and subsequently carried at amortised cost.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless management intends to dispose of the investment within 12
months of the balance sheet date.
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial
assets is impaired.
Financial liabilities
(a) Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit or loss held for trading: A financial liability is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are also categorised as held for trading unless they are
designated as hedges, and the hedge is effective for accounting purposes. Liabilities in this category are classified as current
liabilities.
Financial instruments designated at fair value through profit or loss upon initial recognition: these include financial liabilities that
are not held for trading purposes, which may be sold, are managed and their performance evaluated on a fair basis in accordance
with the Company’s investment and risk strategy.
(b) Financial liabilities at amortised cost
Interest-bearing bank loans and overdrafts are initially recorded at fair value, net of attributable transaction costs. Subsequent to
initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in the income statement over the period of the borrowings on an effective interest basis.
Trade payables are non-interest bearing and are stated at amortised cost.
Derivative financial instruments
All derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured at their fair value at each balance sheet date. All derivatives are categorised as investments held for trading
(a sub-category of financial assets at fair value through the income statement) unless they are designated as cash flow hedges.
As such they are valued at each balance sheet date and variances in value are charged in full to the income statement.
Derivatives designated as cash flow hedges are tested for their hedge effectiveness on a periodic basis. Should these derivatives
fail the requirements of this test they are immediately reclassified as investments held for trading and treated accordingly. To the
extent that these derivatives are demonstrated to be an effective hedge, movements in value are accumulated in equity reserves
(net of deferred tax) and are recycled against the benefit or charge made to the income statement when the hedged transaction is
settled. To the extent that these derivatives are ineffective as a hedge, any variance in value is charged directly to the income
statement.
The Group documents at the inception of the transaction outline the relationship between hedging instruments and hedged items,
as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its
assessment, both at hedge inception and on an on-going basis, of whether the derivatives that are used in hedging transactions are
highly effective in offsetting changes in fair values or cash flows of hedged items.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and available-for-sale
securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by
the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current offer price.
The fair value of financial instruments that are not traded in an active market (for example over the counter derivatives) is
determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market
conditions existing at each balance sheet date.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The
value of inventory includes the purchase price, costs associated with bringing the inventory to its present location and condition,
being the supply chain costs (including transport costs to warehouses, logistics costs within the warehouses and transportation
costs to retail stores) and applicable trade discounts, rebates and other subsidies. Net realisable value represents the estimated
selling price in the ordinary course of business, less costs estimated to realise the sale of relevant inventory. Provisions have been
made, if necessary, for slow moving, obsolete and defective inventories.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. When a trade
receivable is uncollectible it is written off to the income statement. Subsequent recoveries of amounts previously written off are
credited against ‘selling expenses’ in the income statement.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts for which a right of set off exists. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet, but included within cash and cash equivalents for the purpose of the cash
flow statement.
Share capital
The Group only has one class of shares, ordinary shares, which are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the
cost of acquisition as part of the purchase consideration.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method where appropriate. Trade payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. They are classified as current liabilities if payment is due within 12 months of the
balance sheet date.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the effective interest method. For liabilities at amortised cost, the
carrying value approximates to fair value as the impact of discounting using market interest rates at the end of the reporting
period is insignificant.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the balance sheet date.
Current and deferred income tax
Current income tax is the expected income tax payable on the taxable income for the year. The current income tax charge is
calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the
Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full using the liability method on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is provided on temporary
differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the
reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in
the foreseeable future. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Recognition of deferred income tax assets takes into account IAS12 recognition criteria using the Group’s judgement on the
probability of future taxable profits being available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.
Employee benefits
(a) Retirement benefits
The Group operates retirement benefit arrangements most notably in the UK and France, which are supplemental to contributions
paid to mandatory state funded schemes. Company sponsored schemes are generally funded through payments to insurance
companies or trustee administered funds, as determined by periodic actuarial calculations or local legislation. The Group has both
defined benefit and defined contribution plans.
A defined contribution plan is a retirement benefit under which the Group pays fixed contributions into a separate entity. The Group
has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees
the benefits relating to employee service in the current and prior periods. A defined benefit plan is a retirement benefit that is not
a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on
retirement, usually dependent on one or more factors such as age, years of service and salary.
For defined benefit plans the liability recognised in the balance sheet is the present value of the defined benefit obligation at the
balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries
using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid, and that have terms to maturity approximating to the terms of the related retirement benefit liability.
Remeasurements arising from experience adjustments and changes in actuarial assumptions are recognised immediately in the
statement of comprehensive income. Past-service costs are recognised immediately in the income statement. Scheme expenses
relating to the legacy UK pension scheme have been charged to the income statement as part of operating costs.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in the future payments is available.
(b) Share-based compensation
The Group operates equity settled, share-based compensation plans. The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense. The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options
that are expected to vest. At each balance sheet date, the Group revises its estimates of the number of options that are expected to
vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment
to equity.
(c) Termination benefits
Termination benefits are payable if employment is terminated before the normal retirement date, or whenever an employee
accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably
committed either to terminating the employment of current employees according to a detailed formal plan, without possibility of
withdrawal, or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due
more than 12 months after the balance sheet date are discounted to present value.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely
than not that an outflow of resources will be required to settle the obligation. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as
interest expense. Provisions are discounted where the time value of money is considered material.
If the Group has a contract that is onerous the present obligation under the contract is recognised and measured as a provision.
The provision is the lower of the cost of exiting the contract and the cost of fulfilling the obligation.
A warranty provision estimates the future costs of warranty repairs that will be carried out on products already sold. This provision
looks forward to periods over which the warranties will expire, and is calculated on a consistent basis year on year.
Restructuring provisions, comprising lease termination penalties and employee termination payments, are only recognised when
plans are sufficiently detailed and well advanced, and where appropriate communication to those affected has been undertaken on
or before the balance sheet date. Provisions are not recognised for future operating losses.
A provision is recognised when there is a present constructive obligation to meet the costs of restructure. This arises when there is
a detailed formal plan for the restructuring, identifying at least the business or part of the business concerned, principal locations
affected and the location, function and approximate number of employees to be compensated for terminating their services.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services, net of value-added
tax, rebates and discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. The amount of
revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases
its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each
arrangement.
Revenues from sales of goods are recognised at the point of sale of a product to the customer or upon delivery to the customer,
whichever is later. Retail sales are usually settled in cash or by credit or payment card.
Certain companies within the Group sell products with a right of return. Accumulated experience is used to estimate and provide
for the value of such returns at the time of sale.
Darty has the right to charge the franchisee an up-front fee to establish the necessary links (which are mainly IT related) to the
Darty infrastructure. These fees are accounted for when the store opens. On an ongoing basis, the franchisee will pay a licence
fee for the use of the brand which is accrued as the rights are used. In addition the franchisee will purchase inventories and
compensate Darty for related logistics costs and after-sales service cover for each product sale. Inventory sales are recognised
when the title passes net of the anticipated cost of services for each product sold.
Revenues from services are recognised in the accounting period in which the services are rendered, by reference to completion of
the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Royalty and franchise revenue is recognised on an accruals basis in accordance with the substance of the relevant agreements.
The Group sells extended warranty and service contracts. Where the Group has responsibility for fulfilling obligations under these
contracts, the Group recognises the corresponding revenue over the period for which cover is provided, excluding any free period
of manufacturer’s warranty. Direct costs associated with the sale of the warranty are also deferred and charged over the period for
which the cover is provided.
Where the Group sells an extended warranty or service contract and a third party insurance company has responsibility for
contractual obligations, commission revenue for the insured warranty contract is recognised at the time of sale. Where part of the
obligation under these contracts is re-insured by the Group, the revenue relating to the re-insurance is recognised over the period
of risk, excluding any period of manufacturer’s warranty.
If an extended warranty is sold by a franchisee, Darty will provide all after-sales support and so bear the risk and reward relating to
that warranty. As with other extended warranty sales, the corresponding revenue and the direct extended warranty selling cost
(i.e. the franchisee commission) is spread over the period of risk.
Finance income and costs
Finance income and costs are recognised on a time-proportion basis using the effective interest method.
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any financial incentives received from the lessor) are charged to the income
statement on a straight-line basis over the full period of the lease.
Benefits received and receivable as an incentive to enter into a lease are deferred and spread on a straight-line basis over the
life of the lease unless another systematic basis is representative of the time pattern of the lessee’s benefit from the use of the
leased asset.
Lease premiums payable are recorded as a prepayment in the balance sheet and amortised on a straight-line basis over the life
of the lease unless another systematic basis is representative of the time pattern of the lessee’s benefit from the use of the
leased asset.
Charges made in respect of operating lease of property are adjusted from time to time to reflect the impact of market rent reviews.
In particular, in France, Belgium and the Netherlands, there is an annual indexation linked to local price inflation. This is agreed
annually and costs are adjusted when agreed and accrued from that date.
Dividends
Dividend income is recognised when the right to receive payment is certain.
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in
which the dividends are approved by the Company’s shareholders. Interim dividends are recognised in the period they are paid.
Assets held for sale and discontinued operations
Assets and businesses are classified as held for sale, and stated at the lower of carrying amount and fair value less costs to sell, if
their carrying amount will be recovered or settled principally through a sale transaction rather than through continuing use. A
discontinued operation is a component of the Group’s business that represents a separate major line of business that has been
disposed of, has been abandoned or meets the criteria to be classified as held for sale.
Effect of new standards
The accounting policies adopted are consistent with those of the previous financial year. The following standards, amendments and
interpretations were adopted for the year ended 30 April 2015 and have not had a material impact on the consolidated financial
statements of the Group.
IFRS 10, ‘Consolidated Financial Statements’
IFRS 11, ‘Joint arrangements’
IFRS 12, ‘Disclosures of Interests in Other Entities’
IAS 27 (revised 2011), ‘Separate Financial Statements’
IAS 28 (revised 2011), ‘Investments in Associates and Joint Ventures’
Amendment to IAS 32, ‘Offsetting Financial Assets and Financial Liabilities’
Amendment to IAS 36, ‘Recoverable Amount Disclosures for Non-Financial Assets’
Amendment to IAS 39, ‘Novation of Derivatives and Continuation of Hedge Accounting’
New standards and interpretations not yet adopted
The Group is currently assessing the impact of the following standards and interpretations:
IFRIC 21, ‘Levies’
IFRS 9, ‘Financial Instruments’
IFRS 15, ‘Revenue from Contracts with Customers’ (applicable for the year ending 30 April 2019)
Amendment to IAS 19, ‘Employee benefits’
Critical accounting estimates and judgements
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of certain
critical estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on
management’s best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.
a) Estimated impairment of assets
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in this
note. In addition, other asset impairment reviews are carried out whenever performance or changes in circumstances indicate that
an impairment may be required. The recoverable amounts of Cash-Generating Units (‘CGU’) have been determined based on
value-in-use calculations. These calculations require the use of estimates which include cash flow forecasts for each CGU and
discount rates based on the Group’s weighted average cost of capital with appropriate adjustments for the risks associated with the
relevant business. Please refer to the intangible assets note and the property, plant and equipment note for details of the key
assumptions used in these impairment reviews.
b) Retirement benefits
The Group operates retirement benefit arrangements most notably in the UK and France. Any net deficit or surplus arising on
defined benefit plans is shown on the balance sheet. The amount recorded is the difference between plan assets and liabilities at
the balance sheet date. Plan assets are based on market value at that date. Plan liabilities are based on actuarial estimates of the
present value of future pension or other benefits that will be payable to members. The most sensitive assumptions involved in
calculating the expected liabilities are mortality rates, price inflation and the discount rate used to calculate the present value of
the liabilities. The main financial assumption is the real discount rate, being the excess of the discount rate over the rate of
inflation.
c) Taxation
Significant judgement is required in determining the provision for income taxes. There are a number of complex tax transactions
which result in tax exposures across the Group. The Group recognises liabilities for anticipated tax issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is
made.
d) Inventories
Inventories are valued at the lower of average cost and net realisable value. Cost comprises direct purchase cost and those
overheads that have been incurred in bringing the inventories to their present location and condition, both types of cost being
measured using a weighted average cost formula (see note 11). Net realisable value represents the estimated selling price in the
ordinary course of business, less costs estimated to realise the sale of relevant stock. Net realisable value includes, where
necessary, provisions for slow moving and damaged inventory. The provision represents the difference between the cost of stock
and its estimated net realisable value, based on ageing. Calculation of these provisions requires judgements to be made which
include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
e) Supplier income
The contributions due from suppliers is material and the accounting involves an element of judgement in determining the amount
and timing of income to be recognised. The major proportion of supplier contributions comes from annual agreements with
suppliers for volume rebates, sometimes conditional on agreed targets. Buyers negotiate the contracted agreements, these will
vary in period length by supplier with reconciliations by supplier performed in order to ensure that all rebates booked have been
phased appropriately and are recoverable. All rebates are included within cost of sales. Where supplier contributions are provided
based on specific activities or services performed they are recognised over the period that those services are provided. Funding for
a specific marketing campaign is netted from marketing costs over the period of the campaign.
Principal rates of exchange
GBP
Czech Kr
Turkish Lira
Average rate – year ended 30 April 2015
Closing rate – 30 April 2015
0.7771
0.7312
27.5794
27.4630
2.8347
2.9995
0.8414
0.8219
26.5792
27.4550
2.7506
2.9295
0.8177
0.8477
25.3412
25.7865
2.3139
2.3604
2 Financial risk management
Treasury policy
Financial risk management is an integral part of the way the Group is managed. The Board establishes the Group’s financial policies
and the Chief Executive Officer establishes objectives in line with these policies. The Treasury Committee, under the supervision of
the Finance Director, is then responsible for setting financial strategies, which are executed by the Central and Operating Company
Treasury teams. Approved Treasury policy defines and classifies risks and also determines, by category of transaction, specific
approval, limit and monitoring procedures.
In the course of its business the Group is exposed to financial market risks, credit risk and liquidity risk.
Foreign exchange risk arises from a proportion of commercial transactions undertaken in currencies other than the functional
currency, from financial assets and liabilities denominated in currencies other than the local functional currency and on the
Group’s investments in foreign operations.
Group Treasury policy requires Group companies to manage their foreign exchange risk against their functional currency.
To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in
the Group use forward and foreign exchange swap contracts, transacted through Group treasury. Foreign exchange risk arises
when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s
functional currency. Foreign currency swaps are held for trading. Underlying assets or liabilities are held for all currency swaps
that the Group entered into.
2 Financial risk management continued
Financial market risks are essentially caused by exposures to foreign currencies and interest rates. Foreign exchange risk arises
because affiliated companies sometimes undertake transactions in foreign currencies such as the purchase of products.
Translation exposure arises from the consolidation of the Group financial statements into euros. Cash flow and fair value interest
rate risk comprises the fair value interest rate risk that results from borrowing at fixed rates and the cash flow interest rate risk
that results from borrowing at variable rates.
Credit risk arises because a counterparty may fail to perform its obligations. The Group is exposed to credit risks on financial
instruments such as liquid assets, derivative assets and its trade receivable portfolios. Credit risk is managed by investing in liquid
assets and acquiring derivatives with high credit quality financial institutions in accordance with the Group’s Treasury policy.
The Group is not exposed to concentrations of credit risk on its liquid assets as these are spread over several financial institutions.
The Group does not expect any refinancing issues as current loan agreements expire. Concentrations of credit risk with respect
to trade receivables are limited due to the Group’s customer base being large and unrelated. Due to this, the Directors believe
there is no further credit risk provision required in excess of the provision for impairment of receivables.
Subsidiary companies lend their excess cash at bank to Group finance companies to be invested centrally. The Treasury Committee
reviews and decides the currency and interest rate framework of the Group’s intragroup loans portfolio on a regular basis.
Group treasury manages liquidity and exposure to funding, interest rate and foreign exchange rate risks. It uses a combination of
derivative and conventional financial instruments to manage these underlying financial risks. Treasury operations are conducted
within a framework of Board-approved policies and guidelines which are recommended and monitored by the Treasury Committee.
These guidelines include bank exposure limits and hedge cover levels for each of the key areas of treasury risk. The Board and
Treasury Committee receive regular reports of the activities of Group treasury.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital.
The principal sources of capital to fund the Group’s operations are equity (note 27), a non-convertible bond (note 21), bank
borrowings (note 21) and operating leases on properties (note 33). Group policy is to borrow centrally to meet funding
requirements; funds are then lent or contributed as equity to certain subsidiaries.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
In considering the balance of sources of finance, the Group seeks to maintain financing from equity, debt and property leases
relative to earnings and cash flows at levels consistent, over time, with similar companies in the industry.
Market Risk
(1) Foreign exchange risk
The Group publishes its financial statements in euros and conducts business in several foreign currencies. It is therefore subject to
foreign currency exchange risk due to exchange movements affecting the Group’s transaction costs and the translation of results
and underlying net assets of its foreign subsidiaries.
The Group hedges a substantial proportion of its exposure to fluctuations on the translation into euros of its foreign currency net
assets by minimising the net assets held in non-euro currencies. Exchange differences arising on the retranslation of net assets
held in currencies other than the functional currency of the entity are recognised in other comprehensive income.
The Group adopts a centralised approach to foreign exchange risk management. Permission of Group treasury is required before a
foreign exchange transaction may be undertaken. Any foreign exchange transaction must be demonstrably linked to an underlying
exposure and the hedge is monitored through the life of the transaction to ensure it remains effective and appropriate.
Treasury policy requires that all transactional foreign exchange risk relating to committed transactions must be hedged. The gain
or loss on the hedge is recognised at the same time as the underlying transaction.
(2) Cash flow and fair value interest rate risk
If interest rates on euro-denominated borrowings had been 10 basis points higher during the year with all other variables held
constant, finance costs to 30 April 2015 would have been €0.1m (30 April 2014: €0.3m) higher. If interest rates on eurodenominated borrowings had been 100 basis points higher during the year with all other variables held constant, finance costs to
30 April 2015 would have been €1.2m (30 April 2014: €2.9m) higher.
Credit risk
Interest rate swap, foreign exchange and deposit transactions are only entered into with counterparties with a short-term credit
rating of A1 or better. Group treasury monitors the credit exposure of the Group to its counterparties and the credit ratings of those
counterparties on a monthly basis.
There are no significant concentrations of credit risk within the Group. Exposures are managed through Group treasury policy
which limits the value that can be placed with each approved counterparty to minimise the risk of loss. The maximum credit risk
exposure relating to financial assets is represented by their carrying value as at the balance sheet date.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group maintains
committed bank facilities of sufficient maturity to ensure that it has sufficient available funds for operations and planned
expenditure.
Maturity profile of financial liabilities
The table below analyses the Group’s financial liabilities and net settled derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the
table are the contractual principal repayments. Balances equal their carrying balances as the impact of discounting is not
significant.
2015
Finance lease liability
Borrowings
2014 (restated)
Borrowings
Within
one year
€m
Between
one and
two years
€m
Between
two and
five years
€m
Over
five years
€m
0.5
721.2
11.1
0.5
0.1
–
0.9
1.8
53.2
–
0.4
244.5
Within
one year
€m
Between
one and
two years
€m
Between
two and
five years
€m
Over
five years
€m
768.0
1.5
2.0
–
–
15.6
0.8
243.6
Restated following the CVAE reclassification from operating profit to taxation (note 7).
The table below analyses the Group’s derivative financial instruments which will be settled on a gross basis into relevant maturity
groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is not significant.
2015
Forward foreign exchange contracts – cash flow hedges
Outflow
Inflow
Foreign currency swap – held for trading
Outflow
Inflow
2014
Forward foreign exchange contracts – cash flow hedges
Outflow
Inflow
Outflow
Inflow
Between
one and
two years
€m
Between
two and
five years
€m
Over
five years
€m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Within
one year
€m
Between
one and
two years
€m
Between
two and
five years
€m
Over
five years
€m
(26.7)
26.5
–
–
–
–
–
–
(2.7)
2.4
–
–
–
–
–
–
Within
one year
€m
(49.1)
49.1
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial
instruments classified as fixed rate is fixed until the maturity of the instrument.
The Group has given certain covenants to lenders in connection with its bank loans. The covenants are of a financial nature and
relate mainly to maintaining a certain level of net debt and interest cover compared to earnings before interest, tax, depreciation
and amortisation and maintaining a ratio of earnings before depreciation and rent to rent and interest. During the year ending 30
April 2015, the Group is in compliance with its covenants.
The revolving credit facility agreement includes financial covenants requiring: (i) that the ratio of adjusted consolidated net debt to
consolidated EBITDA (each as defined in the revolving credit facility agreement) does not exceed the ratio of 2.50:1.00; and (ii) that
the ratio of consolidated EBITDAR to consolidated net interest payable plus rents (each as defined in the revolving credit facility
agreement) is not less than the ratio of 1.50:1.00. These financial covenants are tested at the end of each financial year and each
financial half-year of the Company.
Fair value estimation
Financial instruments are measured in the balance sheet at fair value. This requires disclosure of fair value measurements by level
of the following fair value measurement hierarchy:
•
•
•
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A
market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group,
pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s
length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are
included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is
determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
As announced on 7 August 2014, during the year the Group completed an agreement to sell its 60 per cent shareholding in Datart
International in a deal valued at €5 million. Of the total consideration, €1m was given as shares in SEW-1001 a.s., a company based
in the Czech Republic. These have been classified as level 2 financial instruments because the Group holds a put option over these
shares valuing them at €1m. The carrying value approximates the fair value.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
•
•
•
•
Quoted market prices or dealer quotes for similar instruments (level 1),
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable
yield curves (level 2),
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with
the resulting value discounted back to present value (level 2), and
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments (level 3).
Options over shares in Group undertakings
A put and call option that was held by Darty plc over the non-controlling share capital of Kesa Turkey Limited was recognised at fair
value through profit and loss, in accordance with IAS 39.
The option was entered into in September 2009 and contained a minimum price for the non-controlling shareholding and
accordingly this minimum price had been spread evenly up to the contracted exercise date in December 2015. As a result of
the disposal of Darty Turkey, the liability has crystallised and was fully accrued at 30 April 2014 and settled in full during the
current year.
The net income statement benefit relating to options over non-controlling interests is shown in the table below:
2015
€m
2014
€m
Gains in options over non-controlling interests
Put and call option long term incentive charge – recognised in the income statement
–
–
–
(3.2)
–
(3.2)
The following table presents the Group’s assets and liabilities that are measured at fair value at 30 April 2015:
2015
Level 1
€m
Level 2
€m
Level 3
€m
Total
€m
Available-for-sale financial assets
–
1.0
–
1.0
Total assets
–
1.0
–
1.0
Level 1
€m
Level 2
€m
Level 3
€m
Total
€m
2014
Forward foreign currency contracts – cash flow hedges
–
(0.3)
–
(0.3)
Total liabilities
–
(0.3)
–
(0.3)
All derivative financial assets are held with counterparties with AA credit ratings.
Offsetting financial assets and financial liabilities
The following financial assets are subject to offsetting, enforceable master netting arrangements and similar agreements,
2015
Cash at bank and in hand
Trade receivables
2014 (restated)
Trade receivables
Gross amounts
of recognised
financial assets
€m
Related amounts of
financial liabilities not set
off in the balance sheet
€m
Net
amount
€m
–
36.3
–
(36.3)
–
–
36.3
(36.3)
–
Gross amounts
of recognised
financial assets
€m
Related amounts of
financial liabilities not set
€m
Net
amount
€m
0.3
40.4
(0.3)
(40.4)
–
–
40.7
(40.7)
–
The prior year comparative figures have been restated to ensure comparability with the basis of preparation of the current year
numbers. The trade receivables amount disclosed in the prior year accounts has been changed from €43.9m to €40.4m and the
amount eligible for offset has been changed from €42.4m to €40.4m. The cash at bank and in hand figure has been changed from
€4.3m to €0.3m and the amount eligible for offset has been changed from €4.3m to €0.3m.
The following financial liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements,
2015
Bank overdrafts
Trade payables
Gross amounts
of recognised
financial liabilities
€m
Related amounts of
financial assets not set
€m
Net
amount
€m
–
207.9
–
(36.3)
–
171.6
207.9
(36.3)
171.6
2014 (restated)
Bank overdrafts
Trade payables
Gross amounts
of recognised
financial liabilities
€m
Related amounts of
financial assets not set
€m
Net
amount
€m
7.5
190.5
(0.3)
(40.4)
7.2
150.1
198.0
(40.7)
157.3
numbers. The trade payables amount disclosed in the prior year accounts has been changed from €225.0m to €190.5m and the
amount eligible for offset has been changed from €42.4m to €40.4m. The bank overdrafts figure has been changed from €4.3m to
€7.5m and the amount eligible for offset has been changed from €4.3m to €0.3m.
Credit quality of financial assets
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings
(if available) or to historical information about counterparty default rates:
Group
2015
€m
2014
€m
Trade receivables
Counterparties with external credit rating:
A
BB
BBB
17.3
0.5
13.9
24.4
–
11.1
31.7
35.5
2.6
92.4
4.4
5.4
77.0
10.8
99.4
93.2
131.1
128.7
Counterparties without external credit rating:
Group 1
Group 2
Group 3
Total trade receivables before impairment
Cash at bank and short-term bank deposits
AA
A
BBB
BB
Cash in Store
Cash in Transit
32.1
49.1
2.0
–
0.4
3.3
12.8
55.8
4.1
–
(2.7)
5.5
86.9
75.5
Group 1 – new customers/related parties (less than six months).
Group 2 – existing customers/related parties (more than six months) with no defaults in the past.
Group 3 – existing customers/related parties (more than six months) with some defaults in the past. All defaults were fully recovered.
3 Continuing Group operating profit
2015
€m
Analysis by function:
Revenue
Cost of sales
Distribution costs
Selling expenses
Administrative expenses
Other income
Exceptional items
3,512.1
(2,397.2)
(179.9)
(731.7)
(133.8)
3.1
–
1.4
(1.3)
(13.7)
(0.1)
2014
restated
€m
3,404.4
(2,275.0)
(162.4)
(738.0)
(151.2)
4.5
(3.2)
2.7
(1.4)
(29.4)
–
Group operating profit
58.9
1.4
51.0
2.4
60.3
53.4
Group total revenue includes revenue from services in the year ended 30 April 2015 of €244.9m (2014: €237.6m). Such revenues
predominantly comprise those relating to customer support agreements, delivery and installation, product repairs and product
support. This figure also includes royalties received totalling €6.0m (2014: €9.7m).
The gain on disposal of available-for-sale investments arose from the sale of Go Sport S.A. €1.4m (2014: €2.7m) was received during
the current year, when the purchaser of these Go Sport shares completed a takeover of the rest of the company for a higher price,
which triggered additional proceeds of €1.4m for the Group under the share sale contract.
Other income is from the sub-leasing of property.
Restated following the sale of Datart, now classified as discontinued operations, the CVAE reclassification from operating profit to
taxation (note 7) and the legacy UK retirement benefit scheme expenses reclassification from finance costs to operating costs
(note 5).
4 Segmental analysis
The Group bases its internal reporting systems on certain reportable segments. These segments are used by the chief operating
decision-maker, identified as the Chief Executive, for assessing performance and allocating resources.
The reportable segments, all of which derive their revenue primarily from the retail of electrical goods, are as follows:
•
•
France (Darty and Mistergooddeal.com)
Belgium & the Netherlands (Vanden Borre and BCC)
Datart was classified as a discontinued operation on 22 July 2014, following the signature of a sale and purchase agreement with
SEW-1001 a.s., a company based in the Czech Republic. Its results have been excluded from the Continuing Group.
Darty Spain was classified as a discontinued operation on 30 June 2013, following the closure of its stores, and its results have
been excluded from the Continuing Group.
Darty Turkey was classified as a discontinued operation on 22 January 2014, following the signature of a sale and purchase
agreement with Bimeks A.S., an electrical retailer in Turkey. Its results have been excluded from the Continuing Group.
4 Segmental analysis continued
Sales between segments are carried out at arm’s length. There is no material difference between revenue by origin and destination.
2015
Revenue
EBITDA*
Depreciation and amortisation
Profit on disposal of property, plant and equipment and intangible assets including write-offs
Retail profit/(loss)
Exceptional items
Operating profit/(loss)
France
€m
Belgium & the
Netherlands
€m
Unallocated
€m
Continuing
Group
€m
2,813.5
107.7
(44.5)
6.8
698.6
20.9
(6.1)
–
–
(9.8)
(0.1)
–
3,512.1
118.8
(50.7)
6.8
70.0
(0.9)
1.4
–
(13.7)
–
14.8
–
–
–
1.5
(0.1)
(9.9)
–
–
(1.3)
(1.5)
–
74.9
(0.9)
1.4
(1.3)
(13.7)
(0.1)
16.2
(12.7)
56.8
60.3
Finance costs
(27.4)
Finance costs – net
(27.4)
Income tax expense
32.9
(17.8)
Profit for the year
15.1
* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and intangible assets including
write-offs.
The share of operating profits of the joint venture and associates included within the retail profit for France is €2.3m. The share of
post tax profits of the joint venture and associates included within the operating profit of France is €0.9m.
EBITDA includes reversals of impairment totalling €0.4m all of which are in the France segment.
France
€m
Segmental total assets
Segmental liabilities
Segmental capital expenditure
Segmental property lease rental costs
914.8
(975.2)
39.4
66.2
Belgium & the
Netherlands
€m
197.5
(136.4)
18.1
23.3
Unallocated
€m
89.0
(413.1)
0.3
0.4
Continuing
Group
€m
1,201.3
(1,524.7)
57.8
89.9
Investments in equity accounted joint venture and associates of €15.1m are included within the segment assets of France.
Segment assets include available-for-sale and equity accounted investments, property, plant and equipment, goodwill, intangible
assets, inventories, receivables, other current assets and cash that is not held centrally. Unallocated assets include centrally held
cash and other liquid assets and financial assets, as well as interest and tax related prepaid expenses and accrued income.
Segment liabilities include operating liabilities such as accounts payable, overdrafts that are not held centrally, prepaid income,
accrued expenses and provisions, excluding those relating to interest and taxes that are held centrally. Unallocated liabilities
include loan and finance lease liabilities as well as interest and tax related prepaid income, accrued expenses and provisions.
4 Segmental analysis continued
2014 restated
(a)
Revenue
EBITDA*
Retail profit/(loss)
Exceptional loss on disposal of property, plant and equipment including write-offs
Exceptional items
Operating profit/(loss)
France
€m
Belgium & the
Netherlands
€m
Unallocated
€m
Continuing
Group
€m
2,717.7
123.7
(44.8)
8.3
686.7
14.5
(5.3)
0.1
–
(9.4)
(1.4)
(0.2)
3,404.4
128.8
(51.5)
8.2
87.2
(0.8)
–
2.7
–
(3.6)
(22.4)
9.3
–
–
–
–
–
(3.1)
(11.0)
–
(3.2)
–
(1.4)
–
(0.3)
85.5
(0.8)
(3.2)
2.7
(1.4)
(3.6)
(25.8)
63.1
6.2
(15.9)
53.4
Finance costs
(16.0)
Finance costs – net
(16.0)
Income tax expense
37.4
(26.6)
Profit for the year
10.8
a) Restated following the sale of Datart, now classified as discontinued operations, the CVAE reclassification from operating profit to taxation (note 7) and the legacy
UK retirement benefit scheme expenses reclassification from finance costs to operating costs (note 5).
* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and intangible assets including
write-offs.
The share of operating profits of the joint venture and associates included within the retail profit for France is €3.2m. The share of
post tax profits of the joint venture and associates included within the operating profit of France is €2.4m.
EBITDA is net of impairment charges (including reversals) totalling €3.3m all of which are in the France segment.
France
€m
Segmental total assets
Segmental liabilities
Segmental capital expenditure
Segmental property lease rental costs
937.5
(956.0)
49.8
61.6
Belgium & the
Netherlands
€m
167.7
(122.5)
8.7
24.2
Unallocated
€m
69.1
(420.5)
–
3.0
Continuing
Group
€m
1,174.3
(1,499.0)
58.5
88.8
Investments in equity accounted joint venture and associates of €15.3m are included within the segment assets of France.
Segment assets include available-for-sale and equity accounted investments, property, plant and equipment, goodwill, intangible
assets, inventories, receivables, other current assets and cash that is not held centrally. Unallocated assets include centrally held
cash and other liquid assets and financial assets, as well as interest and tax related prepaid expenses and accrued income.
Segment liabilities include operating liabilities such as accounts payable, overdrafts that are not held centrally, prepaid income,
accrued expenses and provisions, excluding those relating to interest and taxes that are held centrally. Unallocated liabilities
include loan and finance lease liabilities as well as interest and tax related prepaid income, accrued expenses and provisions.
5 Continuing Group finance costs
2015
€m
2014
restated
€m
Interest payable on borrowings
Loan commitment fees and the amortisation of loan and bond arrangement fees
Net interest on pension schemes
Foreign exchange (gains)/losses
20.0
4.5
3.8
(0.9)
10.6
2.5
2.6
0.3
Finance costs
27.4
16.0
Foreign exchange gains and losses arise on the retranslation of short term deposits and loans denominated in a currency other
than the operation’s functional currency.
Following the implementation of IAS19 Revised, the Group has reclassifed the administration costs associated with the legacy UK
pension scheme as an operating cost. This is to bring the Group into line with how others are reporting such costs and is being
treated as a prior year adjustment. As a result, finance costs in 2014 have reduced by €1.4m. These costs have been reclassified as
an operating cost outside of retail profit as they relate to Comet, a discontinued business.
6 Continuing Group profit before income tax
2015
Note
Analysis of costs by nature
Profit before income tax for continuing group is stated after the following charges/(credits):
Staff costs
Depreciation of property, plant and equipment
Amortisation of intangibles
Impairment of property, plant and equipment (included within selling expenses and exceptional items)
Reversal of impairment on property, plant and equipment (included within selling expenses and exceptional items)
Impairment of intangible assets (included within selling expenses and exceptional items)
Operating lease rentals payable
Income from the sub-lease of property
Cost of inventories written off
Reversal of written off inventory (previously accrued provisions now utilised)
Impairment of trade receivables (included within selling expenses)
Cost of inventories recognised as expense and included in cost of sales
Foreign exchange gains
30
€m
585.5
39.2
11.5
11.2
(0.4)
0.4
(6.8)
103.3
(3.1)
29.8
(13.2)
3.1
2,449.5
(0.2)
2014
restated
€m
586.2
43.3
8.2
3.4
–
–
(8.2)
99.1
(4.5)
28.0
(11.1)
4.6
2,291.0
(0.5)
Services provided by the Company’s auditors and its associates
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors as
detailed below:
Fees payable to the Company’s auditors for the audit of Parent Company and consolidated financial statements
Fees payable to the Company’s auditor and its associates for other services:
– The audit of Company’s subsidiaries pursuant to legislation
– Tax advisory services
– Other non-audit services
Total auditors remuneration
2015
€m
2014
€m
0.5
0.5
0.8
0.1
0.2
0.8
0.1
1.0
1.6
2.4
The other non-audit services relate mainly to the transaction services work supporting the acquisition of HIM stores in the Netherlands.
taxation (note 7) and the legacy UK retirement benefit scheme expenses reclassification from finance costs to operating costs (note 5).
7 Continuing Group Income tax expense
2015
Analysis of charge in year
€m
2014
restated
€m
UK corporation tax
Adjustment in respect of prior years
0.9
0.2
0.9
0.2
7.0
10.7
2.4
23.6
11.1
(0.2)
Foreign tax
Current tax on profits for the year
CVAE
20.1
34.5
Deferred tax (Note 26)
Origination and reversal of temporary differences
Change in tax rate
(3.8)
–
0.6
Total income tax expense
17.8
Tax on items charged to equity:
Deferred income tax charge/(credit) on cash flow hedges in reserves
Deferred income tax (credit)/charge on actuarial gains/(losses) on retirement benefit obligations
0.1
(6.7)
(0.1)
1.1
Total tax on items (credited)/charged to equity
(6.6)
1.0
(3.2)
(8.6)
(0.2)
0.7
(8.1)
26.6
7 Continuing Group Income tax expense continued
Factors affecting tax charge for the year
The tax for the year is higher (2014: higher) than the standard rate of corporation tax. The differences are explained below:
2015
Profit on ordinary activities before income tax
€m
2014
restated
€m
32.9
37.4
Profit on ordinary activities multiplied by rate of corporation tax in the UK of 21% (2014: 23%)
Effects of:
Adjustments in respect of foreign tax rates
Adjustments in respect of joint venture and associates
Expenses not taxable
CVAE
Other permanent differences
Exceptional items not deductible/(taxable)
Losses not recognised as deferred tax asset (unrelieved tax losses)
Change in corporation tax rates
Adjustments to tax in respect of prior years
6.9
8.6
2.0
(0.7)
(6.9)
6.7
(2.4)
(0.5)
8.8
–
3.9
6.7
(0.6)
(0.2)
6.6
(5.8)
(0.2)
11.0
(0.2)
0.7
Total income tax expense
17.8
26.6
Losses not recognised as a deferred tax asset for the current year principally include tax losses arising in BCC, France and UK Head
office companies (2014: BCC and UK Head office companies).
Profit before tax per Group income statement
Share of joint venture and associates taxation
32.9
0.9
37.4
0.8
Non-retail profit items
33.8
17.5
38.2
33.9
Adjusted profit before tax on continuing operations
51.3
72.1
Income tax expense per Group income statement
Share of joint venture and associates’ taxation
17.8
0.9
26.6
0.8
Adjusted income tax expense
Tax relating to exceptional items and non-retail profit items
18.7
1.4
27.4
10.5
Adjusted income tax expense on continuing operations
Adjusted effective tax rate
20.1
37.9
39.3%
52.6%
Non-retail profit items represents the sum of total operating profit less retail profit excluding share of joint venture and associates’
taxation plus net interest on pensions.
The standard rate of corporation tax in the UK changed from 21 per cent to 20 per cent with effect from 1 April 2015. Although the
effective tax rate is 20.98 per cent the Company’s profits for this accounting period are taxed at 21 per cent as the difference
between rates is not considered material, at less than €0.1m difference to adjustments in respect of foreign tax rates.
The effect of the changes announced in the Finance Act 2013 will have no impact on the Group’s deferred tax liability in the current
year or in future years. This is due to management’s expectation that future UK taxable profits are unlikely, with a consequence
that there are no deferred tax assets/liabilities recognised in the UK tax group at the balance sheet date.
Management have assessed the potential tax risks, which takes into account ongoing tax audits underway around the Group, and
have made provision accordingly. The Company has received a demand from the French Tax Authority, claiming up to €15.3m in
unpaid taxes and penalties relating to the Group’s holding company structure. Extensive professional advice has been obtained and
the Company believes it has a very strong defence and much of the claim is without merit. A provision has been made based on our
best estimate of the expected outcome.
In order to be consistent with other French retailers, the Group has reclassified the French business tax – la cotisation sur la valeur
ajoutee des enterprises (‘CVAE’) – as an income tax rather than as previously classified as an operating cost. This change has
resulted in a prior year adjustment resulting in a €1.0m increase in opening net liabilities at 1 May 2013 due to an increase in non
current deferred tax liabilities. The impacts on the income statement and net liabilities since the change are summarised in the
table below:
7 Continuing Group Income tax expense continued
Impact of the change in CVAE charge accounting policy
Impact on operating profit
Impact on taxation
Impact on profit for the year from continuing operations
Impact on trade and other payables
Impact on income tax liabilities
Impact on deferred income tax liabilities
2015
€m
2014
€m
10.7
(10.6)
11.1
(10.8)
0.1
0.3
3.6
(3.6)
(0.6)
3.1
(3.1)
(0.7)
2015
€m
2014
€m
14.0
4.4
13.4
4.6
18.4
18.0
8 Dividends
Final paid 2014: 2.625 cents (2013: 2.625 cents) per share
Interim paid 2015: 0.875 cents (2014: 0.875 cents) per share
An interim dividend of 0.875 cents was paid to the ordinary shareholders of the Company on 1 April 2015. In addition the Board will
also recommend, at the forthcoming Annual General Meeting, the payment of a final dividend of 2.625 cents, payable on 13
November 2015 in relation to the year ending 30 April 2015.
The final dividend, once approved, will be paid to those persons on the Register of Members at the close of business on 22 October 2015.
9 Earnings/(losses) per share
Basic earnings/(losses) per share is calculated by dividing the profits/(losses) attributable to shareholders by 527.5m shares (30
April 2014, 527.5m), being the weighted average number of ordinary shares in issue.
There is no difference between diluted and basic losses per share because all incentive schemes are share awards and there are no
dilutive share options. Supplementary adjusted earnings per share figures are presented. These exclude the effects of discontinued
operations, movement in options and related charges over non-controlling interests, gain on disposal of available-for-sale
investments, legacy UK retirement benefit scheme expenses, exceptional items, amortisation and impairment of acquisition related
intangible assets, net interest on pension schemes, tax effects of exceptional items and other non-retail profit items.
2015
Basic earnings/(losses) per share
Earnings/(losses) attributable to owners of the Parent
Discontinued operations attributable to owners of the Parent
Continuing operations attributable to owners of the parent
Adjustments
Exceptional items
Net interest on pension schemes
Tax relating to exceptional and other non-retail profit items
Adjusted earnings per share
2014 restated
(Losses)/
earnings
€m
Per share
amount
cents
(Losses)/
earnings
€m
Per share
amount
cents
14.2
0.8
2.7
0.2
(3.4)
14.2
15.0
2.9
10.8
2.1
–
(1.4)
1.3
13.7
0.1
3.8
(1.4)
–
(0.3)
0.2
2.6
–
0.7
(0.3)
3.2
(2.7)
1.4
29.4
–
2.6
(10.5)
0.6
(0.5)
0.3
5.5
–
0.5
(2.0)
31.1
5.8
34.2
6.5
(0.6)
2.7
(note 5).
10 Discontinued operations
Datart was classified as a discontinued operation on 22 July 2014, following the signature of a sale and purchase agreement with
SEW-1001 a.s., a company based in the Czech Republic. Its results have been excluded from the Continuing Group.
For the year
ended
30 April
2015
€m
Total consideration
Less: Net assets disposed
5.0
(3.8)
Profit on disposal
1.2
Cash flows from Datart
For the year
ended
30 April
2015
€m
Operating activities
Investing activities
For the year
ended
30 April
2014
€m
2.1
(0.4)
4.4
(1.5)
Cash flows relating to performance of business
1.7
2.9
Net cash consideration during the period, including cash and overdrafts disposed
1.0
–
2.7
2.9
Total cash flow
Operations classified as discontinued in prior years
Darty Italy was classified as a discontinued operation on 1 March 2013, following the sale of the Group’s Italian operations, and its
results have been excluded from the Continuing Group.
Darty Spain was classified as a discontinued operation on 30 June 2013, following the closure of its stores, and its results have
been excluded from the Continuing Group.
Darty Turkey was classified as a discontinued operation on 22 January 2014, following the signature of a sale and purchase
agreement with Bimeks A.S., an electrical retailer in Turkey. Its results have been excluded from the Continuing Group.
The results from Datart, Darty Italy, Darty Spain and Darty Turkey, classified as discontinued operations in the consolidated income
statement, are stated below.
For the year
ended
30 April
2015
€m
For the year
ended
30 April
2014
restated
€m
Revenue
Cost of sales
Distribution costs
Selling expenses
Administrative expenses
Exceptional items
Finance costs
Finance income
36.7
(27.0)
(1.3)
(8.6)
(2.6)
0.2
–
0.1
276.6
(215.8)
(8.4)
(55.5)
(12.6)
(4.6)
(0.8)
0.1
Loss before income tax
Taxation relating to performance of business
(2.5)
–
(21.0)
–
Loss after taxation relating to performance of business
(2.5)
(21.0)
Net profit on disposal
Total loss for the period from discontinued operations
1.2
3.6
(1.3)
(17.4)
10 Discontinued operations continued
Exceptional items relate to the remeasurement of assets of discontinued operations.
Cash flows from Datart, Darty Italy, Darty Spain and Darty Turkey
For the year
ended
30 April
2015
€m
For the year
ended
30 April
2014
restated
€m
Operating activities
Investing activities
(15.3)
(0.4)
(56.9)
(3.2)
Cash flows relating to performance of business
(15.7)
(60.1)
Net cash consideration during the period, including cash and overdrafts disposed
Total cash flow
10.1
2.6
(5.6)
(57.5)
2015
€m
2014
€m
(0.4)
(11.2)
(8.5)
6.4
–
–
(26.0)
–
(13.7)
(26.0)
11 Exceptional items
France
Impairment of intangible assets
Impairment of property, plant and equipment
Restructuring costs
Exceptional gain from revised estimate of inventory carrying value
Restructuring costs
Exceptional gain from revised estimate of inventory carrying value
Unallocated
Restructuring costs
Exceptional items in operating loss
Tax relating to exceptional and other non-retail profit items
–
1.5
(3.1)
–
1.5
(3.1)
(1.5)
(0.3)
(1.5)
(0.3)
(13.7)
(29.4)
1.4
Exceptional loss for the period
(12.3)
10.5
(18.9)
Exceptional items total €13.7m (pre tax) which arise due to the following:
•
€14.5m of property related charges and impairment costs in France, mainly as a result of a programme to improve store
portfolio performance comprising €0.2m of intangible asset impairment, €11.2m of property, plant and equipment impairment
and €3.1m of property related charges included within restructuring costs;
•
•
•
•
€4.6m of reorganisation costs in France associated with integrating Mistergooddeal.com into the Darty business along with
€0.2m of acquisition related goodwill being written-off;
€2.1m of restructuring costs (€1.9m in the unallocated segment and €0.2m in France) relating to the transfer of some head office
functions from London to Paris;
€0.2m of HR related cost adjustments to prior period reorganisation costs (€0.6m in France less €0.4m unallocated credit); and
A €7.9m exceptional gain (€6.4m in France and €1.5m in Belgium and the Netherlands) arising on the revised IAS2 estimation of
distribution costs in the carrying value of inventory to take into account non-storage warehouse and logistics costs.
The revised inventory carrying value estimate is of a costs of sales nature and all other exceptional items are of an administrative
expenses nature.
There is a tax credit relating to exceptional and other non-retail profit items of €1.4m.
The cash outflow on exceptional items for the Continuing Group during the year was €12.7m (2014: €23.4m).
12 Intangible assets
Goodwill
€m
Software
€m
Other
intangibles
€m
Total
€m
Cost
At 1 May 2014
Adjustment to fair value of Mistergooddeal.com assets acquired
Reclassifications
Additions – separately acquired
Additions – internally generated
Acquisition of subsidiary (note 35)
Disposals
161.4
0.2
–
–
–
6.5
–
169.7
(0.1)
0.3
3.3
7.2
–
(8.9)
33.7
–
–
–
–
0.8
(0.1)
364.8
0.1
0.3
3.3
7.2
7.3
(9.0)
As at 30 April 2015
34.4
374.0
168.1
171.5
Accumulated amortisation and impairment
At 1 May 2014
Charge for year
Disposals
Impairment
Effect of foreign exchange rate changes
142.4
–
–
–
0.2
0.1
136.0
0.6
11.6
(7.7)
–
(0.1)
22.1
–
0.1
(0.1)
0.2
–
300.5
0.6
11.7
(7.8)
0.4
–
As at 30 April 2015
142.7
140.4
22.3
305.4
Net book value
– internally generated
– other
–
25.4
21.3
9.8
–
12.1
21.3
47.3
As at 30 April 2015
25.4
31.1
12.1
68.6
Amortisation charges in the year were included in the income statement as follows: cost of sales €nil, selling expenses €0.5m and
administrative expenses €11.2m.
Goodwill
€m
Software
€m
Other
intangibles
€m
Total
€m
Cost
At 1 May 2013
Reclassifications
Additions – separately acquired
Additions – internally generated
Disposals
166.4
–
–
–
–
(5.0)
–
163.6
0.1
4.7
8.4
0.7
(7.5)
(0.3)
35.8
(0.1)
0.3
–
–
(1.9)
(0.4)
365.8
–
5.0
8.4
0.7
(14.4)
(0.7)
As at 30 April 2014
161.4
169.7
33.7
364.8
Accumulated amortisation and impairment
At 1 May 2013
Charge for year
Disposals
Effects of foreign exchange rate changes
146.2
–
(3.8)
–
132.6
9.0
(5.2)
(0.4)
24.2
0.3
(2.1)
(0.3)
303.0
9.3
(11.1)
(0.7)
As at 30 April 2014
142.4
136.0
22.1
300.5
Net book value
– other
–
19.0
20.5
13.2
–
11.6
20.5
43.8
As at 30 April 2014
19.0
33.7
11.6
64.3
– other
–
20.2
14.4
16.6
–
11.6
14.4
48.4
As at 30 April 2013
20.2
31.0
11.6
62.8
Amortisation charges in the prior year were included in the income statement as follows: cost of sales €nil, selling expenses €0.8m,
administrative expenses €8.5m.
Impairment charges in the year of €0.4m were included as exceptional items in the income statement (see note 11).
12 Intangible assets continued
Goodwill
Goodwill is allocated to cash-generating units and tested annually for impairment based on value in use. Goodwill is tested more
frequently if there are indications that it might be impaired. Cash-generating units are independent sources of income and
represent the lowest level within the Group at which the associated goodwill is monitored for management purposes.
During the year BCC acquired a chain of retail stores in the Netherlands. The goodwill on acquisition is included in the Belgium and
the Netherlands business segment.
The carrying amount of goodwill by business segments is as follows:
As at 30 April 2015
As at 30 April 2014
France
€m
Belgium &
the Netherlands
€m
Group
€m
0.5
0.5
24.9
18.5
25.4
19.0
Goodwill impairment review
The key assumptions used for the value in use calculations are the discount rates, growth rates and expected changes to selling
prices and costs. Management have estimated the discount rate with regard to the specific risks inherent within the Group’s retail
businesses. Discount rates used are on a pre-tax basis. Changes in selling prices and direct costs are based on past experience and
have been adjusted for expected changes in future conditions. The calculations are based on future operating cash flows, over a
five-year period, derived using Management’s latest medium-term forecasts. Cash flows are extrapolated using estimated long
term growth rates.
The key assumptions used in the value in use calculations for France and Belgium and the Netherlands are as follows:
•
•
Long-term growth rate of 2.0 per cent (2014: 2.0 per cent).
Pre-tax discount rates of between 11.0 per cent and 13.9 per cent (2014: between 13.8 per cent and 14.4 per cent), being the
Group’s weighted average cost of capital with appropriate adjustments for the risks associated with the relevant business.
Other intangibles
Other intangibles comprise amounts paid in order to gain access to certain leasehold premises, intangible assets acquired in
business combinations and favourable lease contracts.
The carrying amount of the other intangibles is analysed by business segment as follows:
As at 30 April 2015
As at 30 April 2014
France
€m
Belgium &
the Netherlands
€m
Group
€m
11.4
11.6
0.7
–
12.1
11.6
Other Intangibles are valued at fair value less costs to sell.
13 Property, plant and equipment
Land and
buildings
€m
Cost
At 1 May 2014
Reclassifications
Additions
Disposals
Fixtures,
fittings
and
equipment
€m
Assets in the
course of
construction
€m
Total
€m
326.3
0.2
–
4.2
(13.3)
–
514.0
6.3
0.8
33.0
(62.4)
(0.2)
11.9
(6.8)
–
3.0
–
–
852.2
(0.3)
0.8
40.2
(75.7)
(0.2)
As at 30 April 2015
317.4
491.5
8.1
817.0
Accumulated depreciation and impairment
At 1 May 2014
Impairment
Reversal of impairment
Charge for year
Disposals
94.6
–
11.2
(0.4)
9.7
(8.6)
–
413.7
1.3
–
–
30.0
(55.7)
–
–
–
–
–
–
–
–
508.3
1.3
11.2
(0.4)
39.7
(64.3)
–
As at 30 April 2015
106.5
389.3
–
495.8
Net book value
As at 30 April 2015
210.9
102.2
8.1
321.2
Land and
buildings
€m
Fixtures,
fittings
and
equipment
€m
Assets in the
course of
construction
€m
Total
€m
Cost
At 1 May 2013
Reclassifications
Additions
Disposals
350.9
0.7
–
4.1
(29.4)
–
566.0
6.3
1.3
31.1
(86.0)
(4.7)
5.7
(7.0)
–
13.3
–
(0.1)
922.6
–
1.3
48.5
(115.4)
(4.8)
At 30 April 2014
326.3
514.0
11.9
852.2
Accumulated depreciation and impairment
At 1 May 2013
Impairment
Reversal of impairment
Charge for year
Disposals
92.7
3.4
–
8.0
(9.5)
–
460.9
0.1
(0.2)
37.4
(80.3)
(4.2)
–
–
–
–
–
–
553.6
3.5
(0.2)
45.4
(89.8)
(4.2)
As at 30 April 2014
94.6
413.7
–
508.3
Net book value
As at 30 April 2014
231.7
100.3
11.9
343.9
Net book value
As at 30 April 2013
258.2
105.1
5.7
369.0
The cost of fixtures, fittings and equipment includes €2.1m (2014: nil) in respect of assets held under finance leases. The related
accumulated depreciation at the end of the year was €0.1m (2014: nil). The net book value of fixtures, fittings and equipment held
under finance leases was €2.0m (2014: nil).
13 Property, plant and equipment continued
Impairments
Asset impairment reviews are carried out annually or whenever performance or changes in circumstances indicate that an
impairment may be required.
For the purposes of impairment testing, each individual store is considered by management to be a cash-generating unit.
Impairment testing is based on value in use calculations incorporating discount rates derived from the Group’s weighted average
cost of capital with appropriate adjustments for the risks associated with the relevant business.
Impairment of €11.2m (2014: €3.5m) was charged to the income statement during the year and €0.4m (2014: €0.2m) of previously
held provisions were reversed.
The key assumptions used in the impairment review are based upon the achievement of the Group’s medium-term plan with a
long-term growth rate of between zero and 2.0 per cent (2014: 2.0 per cent) and pre-tax discount rate of between 11.0 per cent and
13.9 per cent (2014: between 13.8 per cent and 14.4 per cent). In France, where impairments were incurred, the long-term growth
rate was between zero and 2.0 per cent (2014: 2.0 per cent) and the pre-tax discount rate was 13.9 per cent (2014: 14.4 per cent).
14 Investments
Joint
venture
€m
At 1 May 2014
Share of retained profits in year
Dividends received
Disposals
0.6
–
–
(0.6)
Associates
€m
Total
€m
14.7
1.4
(1.0)
–
15.3
1.4
(1.0)
(0.6)
–
15.1
15.1
Joint
venture
€m
Associates
€m
Total
€m
As at 30 April 2015
At 1 May 2013
Share of retained profits in year
Dividends received
1.0
0.5
(0.9)
22.9
1.9
(10.1)
23.9
2.4
(11.0)
As at 30 April 2014
0.6
14.7
15.3
In relation to the Group’s interest in its joint venture and associates, the income and expenses were as follows:
Joint venture
Income
Expense
Associates
2015
€m
2014
€m
2015
€m
2014
€m
2.0
(2.0)
5.2
(4.7)
32.9
(30.6)
33.6
(30.9)
Profit before interest and tax
Tax
–
–
0.5
–
2.3
(0.9)
2.7
(0.8)
Share of profits after tax
–
0.5
1.4
1.9
In relation to the Group’s interest in the joint venture and associates, the assets and liabilities are shown below:
Joint venture
2015
€m
Associates
2014
€m
Current assets
Current liabilities
–
–
4.8
(4.2)
Net assets
–
0.6
2015
€m
237.7
(222.6)
15.1
2014
€m
252.3
(237.6)
14.7
During the year the Group disposed of its investment in the joint venture, Darty Orange S.A. This was a company incorporated in
France in which the Group had joint control. Darty Orange S.A. has no significant contingent liabilities to which the Group is
exposed. There are no significant capital commitments within Darty Orange S.A. Tax paid on the profits of Darty Orange S.A. is
included in the tax charge of France. The Group owned 5,000 part social shares, this made up 50 per cent of the total shareholding.
The Group’s investment in associated undertakings relate to the Group’s holding in Menafinance S.A., a company incorporated in
France that provides consumer credit services. The Group owns 370,716 ordinary shares of €16.00 each. Menafinance S.A. has a
balance sheet date of 31 December.
14 Investments continued
On 1 March 2013, as part of the disposal of the Italian operations, the Group acquired a 15 per cent investment in DPS Group s.r.l
(‘DPS’) through contributing all 20 stores and employees along with a cash contribution of €3.0m. Given the uncertainty over
future returns, it was decided in 2013 to fully impair this investment.
As part of the disposal agreement to sell Comet Group plc, its subsidiaries and Triptych Insurance N.V., the Group made an
investment of £50.0m in Hailey 2 LP. The investment entitled the Group to participate in the equity proceeds of any subsequent
sale (or other exit) of Comet and/or Triptych by Hailey 2 LP. No return will be received by the Group unless the net exit proceeds
received by Hailey 2 LP exceed £70 million. In the event that the net exit proceeds received by Hailey 2 LP exceed £70 million, the
Group will receive a return of 10 per cent of the amount by which the net exit proceeds exceed £70 million, and a further return of
20 per cent of any amount above £105 million. No fixed coupon will be payable on the Group’s investment and it has no maturity
date. Outside of this, the Group has no other control rights relating to this investment. Given the uncertainty over future returns,
the investment was fully impaired in a prior year.
15 Available-for-sale financial assets
€m
As at 1 May 2014
Purchase of shares in SEW-100.a.s
–
1.0
As at 30 April 2015
1.0
Unlisted securities: Level 3 financial instruments
Equity securities – SEW-100.a.s.
1.0
Total securities as at 30 April 2015
1.0
As part of the consideration for the sale of Datart to SEW-1001 a.s. (‘SEW’), a company based in the Czech Republic,
the Group holds 603,000 shares in SEW representing 30 per cent of the issued share capital of SEW. The Group has a put option
exercisable 18 months after the disposal (from 23 January 2016) on the purchasers of Datart to acquire these shares for a
guaranteed price of €1.0m.
16 Inventories
Finished goods for resale
2015
€m
2014
€m
2013
€m
456.8
474.2
477.9
€170.6m (2014: €169.0m) of inventories were not paid for as at 30 April 2015.
The Group’s estimate of the costs included within inventory has been refined during the year as described in note 11.
17 Trade and other receivables
2015
€m
Amounts falling due within one year:
Trade receivables
Less: Provision for impairment of receivables
Trade receivables – net
Amounts receivable from joint venture and associates
Other receivables
Prepayments and accrued income
Total trade and other receivables
131.1
(6.7)
2014
€m
2013
€m
128.7
(6.9)
113.2
(4.6)
124.4
–
54.5
39.4
121.8
1.5
63.4
34.8
108.6
1.5
52.5
34.6
218.3
221.5
197.2
The book value of the Group’s trade and other receivables approximates to fair value due to the short-term nature of these receivables.
At 30 April 2015, trade receivables of €33.8m (2014: €18.9m, 2013: €19.4m) are past due but not impaired. These relate to a
number of independent customers and franchisees for whom there is no recent history of default. The ageing analysis of these
trade receivables is as follows:
2015
€m
2014
€m
2013
€m
Up to three months
Three to six months
Over six months
30.9
2.7
0.2
17.1
1.4
0.4
12.7
1.8
4.9
Total
33.8
18.9
19.4
17 Trade and other receivables continued
At 30 April 2015, trade receivables of €6.7m (2014: €6.9m, 2013: €4.6m) were provided for. The individually impaired receivables
mainly relate to franchisees and wholesalers, which are in unexpectedly difficult economic situations. It was assessed that a
portion of the receivables is expected to be recovered. The ageing of these receivables is as follows:
2015
€m
2014
€m
2013
€m
Up to three months
Three to six months
Over six months
1.0
0.9
4.8
1.4
0.4
5.1
0.7
0.3
3.6
Total
6.7
6.9
4.6
2015
€m
2014
€m
2013
€m
0.4
217.6
–
0.3
0.7
207.4
6.5
6.9
0.3
187.1
9.0
0.8
218.3
221.5
197.2
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
Pounds sterling
Euros
Czech krown
Other
Total trade and other receivables
The Group’s trade receivables are stated after provision for impairment based on management’s assessment of the
creditworthiness of the customers. An analysis of the movement in the provision is set out below:
2015
€m
2014
€m
At 1 May
Provision from subsidiary acquired
Provisions for receivables impairment
Trade debtors written off in year
Unused amounts reversed
Disposal – Provision with Datart
(6.9)
–
(3.1)
2.6
0.5
0.2
(4.6)
(2.0)
(4.6)
2.4
1.9
–
As at 30 April
(6.7)
(6.9)
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s customer base being large and
unrelated. The credit ratings of the Group’s debtors are disclosed in note 2.
The other classes within trade and other receivables do not contain impaired assets.
18 Other receivables
2015
€m
2014
€m
2013
€m
Non-current
Other receivables
9.7
11.2
15.3
Total other receivables
9.7
11.2
15.3
The book value of the Group’s other receivables approximates to their fair value. Other receivables consist mainly of rental
deposits.
The carrying amounts of the Group’s other receivables are denominated in the following currencies:
2015
€m
2014
€m
2013
€m
Euros
Czech krown
Other
9.6
–
0.1
11.0
0.1
0.1
13.0
0.3
2.0
Total other receivables
9.7
11.2
15.3
The other receivables do not contain impaired assets.
19 Cash and cash equivalents
2015
€m
2014
€m
2013
€m
Short-term bank deposit
86.9
–
75.5
–
50.2
17.8
Total
86.9
75.5
68.0
For the purpose of the consolidated cash flow statement, cash, cash equivalents and bank overdrafts comprise the following:
2015
€m
2014
€m
2013
€m
Bank overdrafts
Short-term bank deposit
86.9
(0.2)
–
75.5
(1.5)
–
50.2
(0.3)
17.8
Total cash, cash equivalents and bank overdrafts
86.7
74.0
67.7
Treasury policy includes counterparty limits of up to €30 million in aggregate per core bank or permitted bank (minimum short
term rating A1/P1).
20 Trade and other payables
2015
€m
2014
restated
€m
2013
restated
€m
Trade payables
Tax and social security payable
Other payables
Accruals
Deferred income
318.6
116.4
186.4
100.3
115.3
341.1
117.1
195.6
114.5
119.1
339.4
107.6
182.2
130.1
124.7
Total trade and other payables
837.0
887.4
884.0
Following the change in accounting policy to reclassify CVAE as taxation rather than operating expense, the Group has reclassified
the associated creditor from trade and other payables to income tax liabilities (2014: €3.1m, 2013: €3.5m).
21 Borrowings
2015
€m
2014
€m
2013
€m
Current
Bank loans and overdrafts
11.1
1.5
0.3
Total current
11.1
1.5
0.3
Non-current
Bank loans, overdrafts and bonds
– repayable within one year
– repayable between one and five years
– repayable after five years
11.1
53.2
244.5
1.5
15.6
243.6
0.3
218.3
–
Less amount due for settlement within one year shown under current liabilities
308.8
(11.1)
260.7
(1.5)
218.6
(0.3)
Total non-current
297.7
259.2
218.3
Bank loans and overdrafts are denominated in euros and have floating interest rates based upon EURIBOR. The effective interest
rate on the revolving credit facility at the balance sheet date was 3.0 per cent (30 April 2014: 3.5 per cent).
In February 2014 the Group signed a new committed €225m five-year revolving credit facility, which expires in February 2019.
This replaced the Group’s existing €455m facility which was due to expire in December 2015. In addition, in March 2015 the Group
signed a new committed €17m three-year revolving credit facility, which expires in March 2018.
In February 2014 the Group issued €250m Senior Notes with a coupon of 5.875 per cent which mature on February 2021.
This is a non-convertible bond.
The book value of the Group’s borrowings approximates to their fair value. Borrowings are denominated in euros.
21 Borrowings continued
Borrowing facilities
The Group had the following undrawn committed borrowing facilities available at 30 April, in respect of which all conditions
precedent had been met.
2015
€m
2014
€m
2013
€m
185.0
205.0
235.0
Non-current
€m
Current
€m
Expiring after more than one year but not more than five years
Borrowings by class
2015
Current
€m
Bank overdrafts
Bank loans
Issued bonds (including transaction costs)
2014
Non-current
€m
Current
€m
2013
Non-current
€m
(0.2)
(10.9)
–
–
(53.2)
(244.5)
(1.5)
–
–
–
(15.6)
(243.6)
(0.3)
–
–
–
(218.3)
–
(11.1)
(297.7)
(1.5)
(259.2)
(0.3)
(218.3)
The difference between the carrying value of the issued bond and its €250m nominal value is the amount of prepaid fees which
remain unamortised. The difference between the carrying value of the bank loans and the drawn down revolving credit facility is
the amount of prepaid fees which remain unamortised.
Obligations under finance leases
2015
€m
2014
€m
2013
€m
(0.5)
(1.4)
–
–
–
–
–
–
–
Future finance charges on finance leases
(1.9)
–
–
–
–
–
Present value of finance lease liabilities
(1.9)
–
–
2015
€m
2014
€m
2013
€m
1.0
219.3
2.7
1.1
224.7
1.3
0.7
239.7
1.4
223.0
227.1
241.8
The minimum lease payments under finance leases fall due as follows
Less than one year
Later than one year but not more than five
More than five years
22 Other payables
Accruals
Deferred income
Other payables
Total other payables
Deferred income mainly relates to the deferred revenue recognition relating to extended warranties and service contracts.
23 Derivative financial instruments
2015
Current portion
2014
Assets
€m
Liabilities
€m
Assets
€m
–
–
–
–
–
–
2013
Liabilities
€m
–
(0.3)
Assets
€m
Liabilities
€m
–
–
–
–
Derivative financial instruments – current
–
–
–
(0.3)
–
–
Total derivative financial instruments
–
–
–
(0.3)
–
–
Trading derivatives are classified as a current asset or liability. The full fair value of a hedging derivative is classified as a
non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and as a current asset or
liability if the maturity of the hedged item is less than 12 months.
23 Derivative financial instruments continued
Hedges
The Group uses forward foreign currency contracts to hedge expected future purchases in US dollars. The contracts typically cover
periods from one to nine months. Where cash flow hedges on forward foreign currency contracts are assessed to be effective, the
movement in the fair value is taken to the hedging reserve within equity. The fair value of forward foreign currency contracts is
calculated by marking the contracts to market using prevailing forward exchange rates. At 30 April 2015 a net unrealised loss of
€nil (30 April 2014: €0.3m) with a related deferred tax asset was included within equity in respect of these contracts. At 30 April
2015 the value of future US dollar purchases hedged was $54.3m (2014: $31.8m). There was no ineffectiveness recognised in profit
or loss arising from cash flow hedges.
24 Provisions
2015
€m
At 1 May
Additional amounts provided in the year
Amounts used or transferred during the year
Unused amounts reversed during the year
5.1
1.5
(3.1)
(0.9)
At 30 April
2.6
Analysed as:
2015
€m
2014
€m
Current
Non-current
1.8
0.8
3.7
1.4
Total
2.6
5.1
Provisions relate to onerous property contracts. The Group has provided against future liabilities for all properties sublet at a
shortfall and long-term idle properties. The provision is based on the value of future cash outflows relating to rent, rates and
service charges.
Non-current provisions are all due to be utilised within two years, with the exception of €0.1m, which is due to be utilised between
two and three years.
25 Income tax liabilities
2015
€m
2014
€m
2013
€m
Income tax
CVAE
12.3
3.6
8.3
3.1
4.0
3.5
Total tax liabilities
15.9
11.4
7.5
Following the change in accounting policy to reclassify CVAE as taxation rather than operating expense, the Group has reclassified
the associated creditor from trade and other payables to Income tax liabilities (2014: €3.1m, 2013: €3.5m).
26 Deferred tax
Deferred income tax is calculated in full on temporary differences under the liability method using tax rates applicable to the
country in which they originate.
Deferred income tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred
income tax assets, to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilised.
Following a change in UK tax legislation applicable from 1 July 2009, dividends received in the UK are no longer subject to UK
taxation, provided certain conditions are met. Consequently no deferred income tax is recognised on the unremitted earnings of
overseas subsidiaries and associated undertakings.
26 Deferred tax continued
The movements in deferred income tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as
permitted by IAS 12) during the year are shown below. Deferred income tax assets and liabilities are only offset where there is a
legally enforceable right of offset and there is an intention to settle the balances net.
2015
Accelerated
capital
allowances
€m
Other
€m
Total
€m
At 1 May 2014
Income statement credit/(charge)
Charged to equity
Reclassification
(43.8)
5.0
–
(1.5)
(5.8)
(6.0)
(0.1)
0.7
(49.6)
(1.0)
(0.1)
(0.8)
As at 30 April 2015
(40.3)
(11.2)
(51.5)
Accelerated
capital
allowances
€m
Tax losses
€m
At 1 May 2014
Business combinations
Reclassification
Credited to equity
–
–
–
1.5
–
0.1
5.8
–
–
–
As at 30 April 2015
1.5
5.9
Pensions
€m
15.9
1.3
–
(0.2)
6.7
Other
€m
3.2
(2.9)
0.2
(0.5)
–
Total
€m
19.2
4.2
0.2
0.8
6.7
23.7
–
31.1
Accelerated
capital
allowances
€m
Other
€m
Total
€m
2014
At 1 May 2013
Adjustment in respect of CVAE reclassification
(53.4)
(1.8)
(6.7)
–
(60.1)
(1.8)
Credited to equity
(55.2)
10.0
1.4
–
(6.7)
0.8
–
0.1
(61.9)
10.8
1.4
0.1
(43.8)
(5.8)
(49.6)
As at 30 April 2014
Tax losses
€m
Pensions
€m
Other
€m
Total
€m
At 1 May 2013
Adjustment in respect of CVAE reclassification
3.2
–
15.8
–
0.7
0.8
19.7
0.8
Tax (charged) to equity
3.2
(3.1)
–
–
15.8
1.1
0.1
(1.1)
1.5
(0.7)
2.4
–
20.5
(2.7)
2.5
(1.1)
As at 30 April 2014
0.1
15.9
3.2
19.2
26 Deferred tax continued
‘Other’ deferred tax liabilities mainly relate to merger goodwill (Belgium) and IT costs (France).
The deferred income tax assets are not fully available for offset against the deferred income tax liabilities, and this gives rise to the
following amounts disclosed in the balance sheet:
2015
€m
Deferred income tax assets as above
Offset against deferred income tax liabilities
31.1
(31.1)
2013
(restated)
€m
19.2
(18.9)
20.5
(19.1)
0.3
1.4
(51.5)
31.1
(49.6)
18.9
(61.9)
19.1
(20.4)
(30.7)
(42.8)
–
Deferred income tax liabilities as above
Reduced by deferred income tax assets
2014
(restated)
€m
The deferred income tax asset recoverable after more than one year is €28.0m (2014: €19.2m) and the deferred income tax liability
due after more than one year is €51.5m (2014: €49.6m).
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit
through the future taxable profits is probable. As at 30 April 2015, the Group had foreign tax losses amounting to approximately
€67m (2014: €43m) and UK losses of approximately €173m (2014: €204m) on which a deferred income tax asset of €5.9m (2014:
€nil) has been recognised. The Group did not recognise deferred income tax assets of approximately €48m (2014: €54m) in respect
of losses amounting to approximately €225m (2014: €247m) that can be carried forward against future taxable income. The tax
deductibility of losses expire as follows:
Within 5 years
Within 15 years
Not expiring
2015
€m
2014
€m
12
39
189
12
31
204
240
247
As referred to in Note 7 the prior years have been restated due to the reclassification of CVAE from operating profit to income tax
and from trade payables to income tax liability.
27 Share capital
2015
Authorised, Issued and fully paid
Ordinary shares of 30 cents each
Number
m
529.6
2014
€m
Number
m
€m
158.9
529.6
158.9
Kesa Employee Share Trust
The Group operates an employee share trust, the Kesa Employee Share Trust (‘the Trust’), that owns 2,093,938 (2014: 2,093,938)
ordinary shares of 30 cents in Darty plc at 30 April 2015. These were acquired at an average cost of €1.94 (2014: €1.94) and
included in the balance sheet within retained earnings at a cost of €4.1m (2014: €4.1m). The shares are used to satisfy share awards
and the purchases are funded by cash contributions from participating companies. Dividends receivable on these shares during the
year have been waived. The administration expenses of the Trust are borne by the Trust. Shares will be allocated by the Trust when
relevant options under the scheme are exercised. The market value of the shares at 30 April 2015 was €2.1m (2014: €2.6m).
28 Cash flow from operating activities
2015
Notes
Profit before income tax from continuing operations
Adjustments for:
Finance costs
Continuing Group operating profit
€m
2014
(restated)
€m
32.9
37.4
27.4
(1.4)
16.0
(2.4)
58.9
51.0
Discontinued operations operating loss
Net impairment of intangibles and property, plant and equipment
Increase in inventories
Increase in trade and other receivables
Decrease in payables
(2.6)
51.4
11.2
(6.9)
(1.4)
(6.4)
(8.4)
(35.1)
(21.0)
54.7
3.3
(3.6)
(2.7)
(1.9)
(15.6)
(45.8)
Net cash inflow from operating activities
60.7
18.4
76.0
(15.3)
75.3
(56.9)
60.7
18.4
Net cash flow from operating activities can be summarised as follows:
10
Net cash inflow from operating activities
(note 5).
Net cash inflow from operating activities as reported at 30 April 2014
Impact of the change in CVAE charge accounting policy
Impact of the legacy UK retirement benefit scheme expenses reclassification from finance costs to operating costs
8.3
11.5
(1.4)
Net cash inflow from operating activities restated
18.4
29 Reconciliation of net cash flow to movement in net debt
2015
€m
Overdrafts
Borrowings falling due within one year
Borrowings falling due after one year
Finance leases
Total
Cash flow
€m
Exchange
and other
movements
€m
2014
€m
86.9
(0.2)
12.0
1.3
(0.6)
–
75.5
(1.5)
86.7
13.3
(0.6)
74.0
(10.9)
(297.7)
(1.9)
(10.9)
(37.0)
(1.9)
–
(1.5)
–
–
(259.2)
–
(310.5)
(49.8)
(1.5)
(259.2)
(223.8)
(36.5)
(2.1)
(185.2)
29 Reconciliation of net cash flow to movement in net debt continued
2014
€m
Overdrafts
Short-term deposits and investments
Borrowings falling due within one year
Borrowings falling due after one year
Total
Cash flow
€m
Exchange
and other
movements
€m
2013
€m
75.5
(1.5)
–
28.8
(1.2)
(17.1)
(3.5)
–
(0.7)
50.2
(0.3)
17.8
74.0
10.5
(4.2)
67.7
–
(259.2)
–
(50.0)
–
9.1
–
(218.3)
(259.2)
(50.0)
9.1
(218.3)
(185.2)
(39.5)
4.9
(150.6)
30 Employees and directors
2015
Staff costs (including Executive Directors)
Wages and salaries
Social security costs
Other pension costs
Total staff costs
€m
2014
restated
€m
419.1
162.7
3.7
420.8
162.1
3.3
585.5
586.2
Included within wages and salaries is €0.4m (2014: €0.4m) in respect of equity-settled share-based payment transactions.
numbers. The wages and salaries amount disclosed in the prior year accounts has been changed from €431.8m (excluding Datart)
to €420.8m. The social security costs figure has been changed from €151.1m (excluding Datart) to €162.1m.
Monthly average number of people employed including Executive Directors
2015
2014
restated
6,890
4,658
1,278
7,040
4,760
1,432
12,826
13,232
2015
€m
2014
€m
Directors
Salaries, fees and taxable benefits
Compensation for loss of office
Bonuses
1.9
–
0.4
1.7
–
1.0
Aggregate emoluments total
2.3
2.7
0.1
–
–
0.1
–
–
2.4
2.8
Stores
Distribution
Administration
Total
Restated following the sale of Datart, now classified as discontinued operations.
Company contributions to money purchase pension schemes
Aggregate gains arising from the exercise of share options
Aggregate amounts receivable under long-term incentive schemes
Total
30 Employees and directors continued
2015
€m
2014
€m
Highest paid Director
Salaries, fees and taxable benefits
Bonuses
Company contributions to money purchase pension schemes
Aggregate gains arising from the exercise of share options
Aggregate amounts receivable under long-term incentive schemes
0.7
–
0.2
0.1
–
–
0.6
–
0.7
0.1
–
–
Total
1.0
1.4
The number of Directors who exercised share options during the year can be seen on page 48 of the Directors’ Remuneration report.
A breakdown of payments to Directors can be seen on page 46 of the Directors’ remuneration report.
2015
€m
2014
€m
Key management compensation
Salaries and other short-term employee benefits
Post employment benefits
Share-based payments
4.0
–
0.3
–
4.4
–
0.3
–
Total
4.3
4.7
Key management includes the Board of Directors and members of the Darty Executive Committee.
31 Share-based payments
Share-based payments
During the year covered by these financial statements, the Group has operated the following share award plan:
•
Long Term Incentive Plan
Details of the significant share award plans are shown below.
(a) June 2011 grant of nil cost share awards
June 2011 LTIP grant
Executive Directors received annual awards of 3-year vesting shares up to 100 per cent of salary (up to 150 per cent in exceptional
circumstances). Other executives participated with award sizes ranging from 15 per cent to 65 per cent of salary. The awards are
based on annual earnings per share, retail profit and free cash flow targets, with one third of the award available in each year.
The fair value of awards within the LTIP were estimated using a Black-Scholes model. The fair value of awards granted and the
assumptions used in the calculation were as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Number of shares in scheme
Vesting period
Expected volatility
Option life
Expected life
Risk free rate
Expected dividends expressed as a dividend yield
Fair value of awards
24 June 2011
£1.34
£nil
111
4,127,600
3 years
49%
N/A
3 years
3.57%
4.80%
£1.16
The expected volatility was based on historical volatility over the past three years. The expected life was the average expected
period to exercise. The risk free rate of return was the yield on zero-coupon UK and France government bonds of a term consistent
with the assumed option life.
31 Share-based payments continued
A reconciliation of movements over the year to 30 April 2015 in respect of the LTIP awards is shown below:
Number
Outstanding at 1 May 2014
Expired during the year
Outstanding at 30 April 2015
Exercisable at 30 April 2015
437,059
(437,059)
–
–
(b) June 2012 grant of nil cost share awards
Grant date
Exercise price
Number of employees
Vesting period
Expected volatility
Option life
Expected life
Risk free rate
24 June 2012
£0.49
£nil
95
9,011,400
3 years
46%
N/A
3 years
1.94%
5.00%
£0.42
Number
2,412,699
2,412,699
–
(c) June 2013 grant of nil cost share awards
Grant date
Exercise price
Number of employees
Vesting period
Expected volatility
Option life
Expected life
Risk free rate
24 June 2013
£0.74
£nil
21
3,547,168
3 years
54%
N/A
3 years
2.51%
5.00%
£0.66
Number
3,547,168
3,547,168
–
(d) September 2014 grant of nil cost share awards
September 2014 LTIP grant – 3 year award
based on annual earnings per share, retail profit and free cash flow targets, with one third of the awards available in each year.
Grant date
Exercise price
Number of employees
Vesting period
Expected volatility
Option life
Expected life
Risk free rate
15 September 2014
£0.80
£nil
67
2,538,416
3 years
54%
N/A
3 years
1.92%
3.51%
£0.72
Number
Granted during year
–
2,538,416
2,538,416
–
September 2014 LTIP grant – 4 year award
based on annual earnings per share, retail profit and free cash flow targets, with one third of the awards available in each year.
Grant date
Exercise price
Number of employees
Vesting period
Expected volatility
Option life
Expected life
Risk free rate
15 September 2014
£0.80
£nil
67
2,538,416
4 years
50%
N/A
4 years
1.92%
3.51%
£0.70
The expected volatility was based on historical volatility over the past four years. The expected life was the average expected
Number
Granted during year
–
2,538,416
2,538,416
–
32 Retirement benefits
Summary of Group retirement benefits and funding arrangements
The Group operates retirement benefit arrangements most notably in the UK and France.
In the UK, the Group operates a defined benefit pension scheme (‘the Comet Pension Scheme’) with assets held in a separate
trustee administered fund. The Scheme was closed to new entrants on 1 April 2004 and future service accrual was ceased on 30
September 2007. Following the disposal of Comet on 3 February 2012, Darty plc became sponsoring employer and accordingly
assumed all the liabilities associated with the Comet Pension Scheme. All member benefits, including any link to future salary
increases, ceased from that date.
In the UK, the trustees must agree a funding plan with the sponsoring company such that any funding shortfall is expected to be
met by additional contributions and investment performance. In order to assess the level of contributions required, triennial
valuations are carried out with plan’s obligations measured using prudent assumptions (relative to those used to measure
accounting liabilities).The March 2013 triennial valuation was agreed with the trustees in March 2014 resulting in fixed annual
payments of £10.0m per annum aiming to make good the £73m deficit by May 2019. Company contributions to be paid in 2015/16
total £10.0 million (2014/15: £10.0 million). The next triennial valuation is in March 2016.
The UK scheme provides benefits for members in the form of a guaranteed level of pension payable for life. The level of benefits
provided depends on the members’ length of service and salary at 3 February 2012. The trustees are required to act on behalf of
the Scheme’s stakeholders in accordance with UK legislation and play a role in the long-term investment and funding strategy. In
the UK scheme, pensions in payment are generally increased in line with inflation. The Group works closely with the trustees to
manage the plan.
There is a risk to the Company that adverse experience (asset volatility, longevity or inflation) could lead to a requirement for the
Company to make additional contributions to cover any deficit increase that arises. A description of Pension scheme liabilities risks
and mitigation measures is set out in the Principal Risks section of the Annual report.
In France, post-retirement benefits are primarily provided by the state system though the Group has supplementary funded
pension plans in place for certain senior executives. At 30 April 2015, these pension plans had a deficit of €7.3m. The Group has no
further mortality risk post retirement. This scheme is no longer open to new entrants with existing liabilities being paid as they fall
due. At 30 April 2015, there were 6 members remaining in the scheme with liabilities estimated at €7.3m. In addition, the Group is
required to pay lump sum retirement indemnities to employees when they retire from service. The entitlement on retirement is
secured through the purchase of an annuity from an insurance company under terms prescribed by legislation. No pre-funding is
legally required, though at 30 April 2015 €16.9m of funding has been set aside for retirement indemnity plans set against estimated
IAS19 liabilities of €74.8m, leading to a net deficit of €57.9m.
In 2014/15, liabilities in both UK and France have increased significantly as a result of falling bond yields and there is also a material
exchange rate impact on UK liabilities.
Outside of the UK and France defined benefit obligations, the operating companies generally operate defined contribution pension
schemes. Annual contributions to these schemes are summarised below:
2015
Defined contribution schemes
2014
UK
€m
France
€m
Other
€m
Group
€m
UK
€m
France
€m
Other
€m
Group
€m
0.2
0.2
2.6
3.0
0.3
–
2.5
2.8
Defined benefit Schemes – IAS19 Accounting Valuations
The Group’s defined benefit schemes in the UK and France have been valued by a qualified and independent actuary at 30 April
2015 based on IAS19 (Revised). No significant new legislation has impacted the IAS valuation for the year ended 30 April 2015. As
announced in 2011, an increased retirement age has been implemented under French legislation and is being phased in to 2018.
32 Retirement benefits continued
The principal assumptions made by the actuaries were:
2015
Discount rate
Rate of increase in pensionable salaries
Rate of pension increases
Price inflation
-RPI
-CPI
2014
UK
%
France
%
UK
%
France
%
3.5
N/A
3.1
–
3.2
2.2
0.25-1.50
2.25
N/A
1.75
–
–
4.5
N/A
3.3
–
3.4
2.4
1.50-3.00
2.5
N/A
2.0
–
–
Discount rate
In the UK, the discount rate is based on the yield on high quality AA and Corporate rated bonds, as classified by Merrill Lynch.
A yield curve is fitted to the data using least squares optimisation techniques. The yield curve is extrapolated beyond 30 years in
line with a gilt yield curve.
In France, the Discount rate is based on high quality (AA) Corporate bonds in the Eurozone.
Price inflation
For the UK scheme, the assumption for future RPI price inflation is taken from published Bank of England estimates for future price
inflation, as implied by the index-linked and fixed interest gilt markets, as at the accounting date and reflects the duration of the
pension liabilities.
In the long term, inflation measured by the Consumer Prices index is expected to be lower than the RPI because of differences in
how the indices are calculated. The CPI assumption takes the assumption for Retail Prices Index inflation and deducts 1.0 per cent
(2014: 1.0 per cent), reflecting long term structural differences between the inflation measures.
For the France schemes, the inflation rate of 1.75 per cent (2014: 2.0 per cent) in the Eurozone is based on the long term forecasts
as set out by the European Central Bank in its Harmonised Index of Consumer Prices (HICP) and the published forecasts from
‘Consensus Economics’.
For the UK scheme, the group has used S1PA tables, weighted by 97 per cent for males and 95 per cent for females, with
improvements in line with the CMI_2013 projections and a long term rate of 1.25 per cent pa for males and females. For the France
schemes, the mortality tables used by the Group are TGHF 2005 for pensioners and INSEE 2009/11 H/F for non-pensioners.
The main mortality outcomes for the UK scheme are summarised below:
Life expectancy at age 60 for a male currently aged 60
Life expectancy at age 60 for a female currently aged 60
Life expectancy at age 60 for a male currently aged 40
Life expectancy at age 60 for a female currently aged 40
2015
Years
2014
Years
26.5
29.2
28.5
31.3
26.3
29.1
28.4
31.2
Duration of the schemes
The weighted average duration of the expected benefit payments from the Comet Pension Scheme is approximately 21 years.
In France, the main scheme is the Darty Retirement Indemnity Plan, which had 9,811 active members at the year-end (2014: 10,004).
This Plan has an expected duration of 16 years. The weighted average of the five France schemes, based on the values of their
defined benefit obligations is 16 years.
Expected Company contributions
Company contributions to the Comet Scheme will be £10.0 million in the year to 30 April 2016. In France, Company contributions
are expected to total €nil next year.
Membership data
At 31 March 2015, the Comet Pension Scheme had 3,535 deferred pensioners with an average age of 47 and a deferred pension of
£11,912,000 per annum. A total of 1,652 pensioner members had an average age of 65 and an annual pension of £6,657,000.
Approximately one third of the Scheme’s liabilities are in respect of current pensions in payment, with the other two thirds in
respect of non-pensioners.
At 30 April 2015, in France, active members of the main Darty Retirement Indemnity Plan totalled 9,811, with an average age of 39.
There were 44 members in other France schemes with an average age of 39.
Net liability
The amounts recognised in the balance sheet are determined as follows:
2015
UK
€m
Present value of defined benefit obligations
Fair value of plan assets
Net liability recognised in the balance sheet
France
€m
2014
Group
€m
UK
€m
France
€m
Group
€m
625.0
(586.8)
82.1
(16.9)
707.1
(603.7)
478.2
(418.1)
62.5
(18.0)
540.7
(436.1)
38.2
65.2
103.4
60.1
44.5
104.6
Asset holdings
In the UK, €0.6m (2014: €0.9m) of the assets held were quoted assets. In France, €nil (2014: €nil) of the assets held were quoted
assets.
Quoted assets are assets which have a quoted market price in an active market.
The fair value of plan assets at the end of the year for the defined benefit plans are as follows:
2015
Equities and equity derivatives
Gilts
Bonds
Cash
Dynamic asset allocation
Real estate
Swaps
Alternatives
Other
Total
2014
UK
€m
France
€m
UK
€m
France
€m
135.1
162.3
47.7
4.4
180.4
–
20.9
34.8
1.2
1.5
–
13.7
–
–
1.1
–
–
0.6
112.9
53.7
40.5
4.6
156.2
–
24.3
25.9
–
1.9
–
14.0
–
–
1.1
–
–
1.0
586.8
16.9
418.1
18.0
Asset liability matching strategy
For the UK scheme, the hedging strategy is reviewed and re-balanced regularly. The current policy is to hedge 85 per cent of
interest rate risk and 85 per cent of inflation risk. There are no swaps in the assets of the France schemes.
Self investment
The Plan assets of the UK and France schemes do not contain any direct investments in Ordinary Shares or Bonds issued by Darty plc.
The amounts recognised in the income statement are as follows:
2015
UK
€m
France
€m
2014
Group
€m
UK
€m
France
€m
Group
€m
Current service cost
Interest cost
Curtailment gains
–
2.6
–
3.4
1.2
(1.5)
3.4
3.8
(1.5)
–
1.4
–
3.4
1.2
(2.3)
3.4
2.6
(2.3)
Total included in the income statement
2.6
3.1
5.7
1.4
2.3
3.7
Of the total charge, including defined contribution schemes, €nil (2014: €nil), €4.3m (2014: €4.2m), €1.8m (2014: €1.7m) and €0.3m
(2014: €0.3m) were included in cost of sales, administrative expenses, selling expenses and distribution costs respectively.
Analysis of the movement in the defined benefit obligation during the year.
2015
UK
€m
Defined benefit obligation at start of year
Current service cost
Interest cost
Benefits paid
Remeasurements recognised in the statement of comprehensive income
Integration of Mistergooddeal.com scheme
Curtailment gains
Currency translation movement
Defined benefit obligation at end of year
478.2
–
22.0
(12.9)
75.2
–
–
62.5
625.0
France
€m
2014
Group
€m
UK
€m
62.5
3.4
1.7
(2.6)
18.2
0.4
(1.5)
–
540.7
3.4
23.7
(15.5)
93.4
0.4
(1.5)
62.5
449.5
–
18.8
(10.2)
5.6
–
–
14.5
82.1
707.1
478.2
Group
€m
UK
€m
2015
UK
€m
France
€m
France
€m
64.1
3.4
1.7
(1.5)
(2.9)
–
(2.3)
–
62.5
Group
€m
513.6
3.4
20.5
(11.7)
2.7
–
(2.3)
14.5
540.7
2014
France
€m
Group
€m
impacting the defined benefit obligation arose from:
Experience (gains)/ losses on benefit obligation
Actuarial (gains)/losses due to changes in financial assumptions
Actuarial (gains)/losses due to changes in demographic assumptions
(6.7)
81.9
–
75.2
(2.1)
13.9
6.4
18.2
(8.8)
95.8
6.4
10.6
(10.5)
5.5
(3.1)
0.1
0.1
7.5
(10.4)
5.6
93.4
5.6
(2.9)
2.7
Group
€m
UK
€m
Analysis of the movement in plan assets during the year.
2015
UK
€m
Fair value of plan assets at start of year
Interest credit
Contributions by employer
Contributions by employees
Benefits paid
The return on plan assets, excluding amounts included in interest income
Fair value of plan assets at end of year
418.1
19.4
12.9
–
(12.9)
93.1
56.2
586.8
France
€m
18.0
0.5
–
–
(1.7)
0.1
–
16.9
2014
436.1
19.9
12.9
–
(14.6)
93.2
56.2
France
€m
Group
€m
409.1
17.4
11.9
–
(10.2)
(22.8)
12.7
19.7
0.6
0.9
–
(3.4)
0.2
–
428.8
18.0
12.8
–
(13.6)
(22.6)
12.7
603.7
418.1
18.0
436.1
Group
€m
UK
€m
Analysis of the movement in the balance sheet liability during the year.
2015
UK
€m
France
€m
2014
France
€m
Liability at start of year
Total expense as above
Contributions paid
Benefits paid
Integration of Mistergooddeal.com scheme
Curtailment gains
60.1
2.6
(12.9)
–
(17.9)
–
–
6.3
44.5
3.1
–
(0.9)
18.1
0.4
–
–
104.6
5.7
(12.9)
(0.9)
0.2
0.4
–
6.3
40.4
1.4
(11.9)
–
28.4
–
–
1.8
44.4
2.3
–
0.9
(3.1)
–
–
–
Liability at end of year
38.2
65.2
103.4
60.1
44.5
France
€m
Group
€m
UK
€m
Group
€m
84.8
3.7
(11.9)
0.9
25.3
–
–
1.8
104.6
Cumulative remeasurements recognised in equity.
2015
UK
€m
2014
At beginning of year
Remeasurements recognised in the year
45.3
(17.9)
5.0
14.4
18.1
–
59.7
0.2
5.0
15.7
28.4
1.2
At end of year
32.4
32.5
64.9
45.3
France
€m
17.5
(3.1)
–
14.4
Group
€m
33.2
25.3
1.2
59.7
The actual returns on plan assets were:
2015
Actual returns on plan assets
2014
UK
€m
France
€m
Group
€m
UK
€m
110.0
0.6
110.6
(5.5)
France
€m
–
Group
€m
(5.5)
History of experience gains and losses
2015
Continuing Group
Experience gains/(losses) arising on plan assets:
Amount
Experience (gains)/losses arising on defined benefit obligation:
Amount
2014
UK
€m
France
€m
Total
€m
93.1
0.1
93.2
(22.8)
(17.9)
18.1
0.2
10.6
478.2
418.1
–
Present value of plan liabilities
Unrecognised past service costs
625.0
586.8
–
82.1
16.9
–
707.1
603.7
–
Deficit
(38.2)
(65.2)
(103.4)
UK
€m
(60.1)
2013
(restated)
France
€m
Total
€m
Total
€m
0.1
(22.7)
45.8
(2.1)
8.5
(2.1)
62.5
18.0
–
540.7
436.1
–
513.6
428.8
–
(44.5)
(104.6)
(84.8)
Sensitivity of defined benefit obligation and income statement charge to key assumptions.
Impact on defined
benefit obligation
Impact on
income statement
Sensitivity
2015
€m
2014
€m
2015
€m
2014
€m
A decrease of 0.5 per cent in the discount rate
An increase of 0.5 per cent in price inflation
An increase of one year in longevity
69.8
53.2
17.3
52.1
39.8
13.1
(2.1)
(2.3)
(0.6)
(1.7)
(1.9)
(0.6)
The sensitivity analyses above have been prepared based on reasonable assumptions occurring at the end of the reporting year
and may not be representative of the actual change. It is based on a change in the key assumption while holding all other
assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability
recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis
did not change compared with the previous year.
33 Operating lease commitments
The Group has operating lease commitments for certain of its retail, distribution and office properties and other assets such as
motor vehicles. The leases have various terms, escalation clauses and renewal rights.
2015
Future aggregate minimum lease payments* under non-cancellable operating leases are as follows:
Within one year
Later than one year and less than five years
After five years
Total
€m
2014
restated
€m
89.1
159.2
21.1
93.7
160.9
25.1
269.4
279.7
The Group sub-lets some unutilised stores and warehouses under non-cancellable operating lease agreements. The leases have
various terms, escalation clauses and renewal rights.
Future aggregate minimum lease payments receivable under non-cancellable operating leases
*
Excluding annual indexation increases
Restated following the sale of Datart, now classified as discontinued operations.
2015
€m
2014
€m
5.2
1.1
34 Capital commitments and contingent liabilities
Capital commitments
2015
€m
2014
€m
Contracts placed for future capital expenditure not provided for:
– property, plant and equipment
– intangible assets
4.7
0.3
3.5
0.2
Total
5.0
3.7
Contingent liabilities
In the ordinary course of business, the Group is involved in litigation proceedings, regulatory claims, investigations and reviews
(‘Litigation’). The facts and circumstances relating to particular cases are evaluated to determine whether it is more likely than not
that there will be a future outflow of funds and, once established, whether a provision relating to a specific case is necessary or
sufficient. The outcome of any Litigation is difficult to predict, and significant management judgement is exercised when
determining the value and risk of a contingent liability. The Group does not expect the ultimate resolution of the Litigation to which
it is a party to have a significant adverse impact on the financial position of the Group.
The Company, in line with standard practice, has given some guarantees and indemnities most notably in relation to disposals of
subsidiary undertakings and legacy tax matters. The liabilities are, in the main, capped based on agreed terms and valuations and
unwind over time.
There are a number of ongoing indirect and corporation tax audits and competition authority reviews underway around the Group
and in respect of previously disposed businesses where we have provided guarantees and indemnities. Other than those already
disclosed there are investigations which give rise to possible risks though the overall impact to the Group is not deemed material.
35 Business combinations
On 2 February 2015, the Group through it’s subsidiary BCC Holding Amstelveen B.V. (The Netherlands) acquired the trade and assets
of 18 separate store (BV) entities from HiM Retail BV, an electrical retailer trading across the central and southern Netherlands.
As a result of the acquisition the Group is expected to increase its presence in these markets and also expects to reduce costs
through economies of scale.
The following table summarises the consideration paid for HiM Retail BV, the fair value of assets acquired and liabilities assumed at
the acquisition date.
Aggregate consideration to 30 April 2015
€m
Cash
Working capital adjustments arising at acquisition date
7.9
2.8
Total aggregate consideration to 30 April 2015
Recognised amounts of identifiable assets acquired and liabilities assumed
10.7
Total fair
value acquired
as reported at
2 February 2015
€m
Fair value
adjustments
for the year
€m
Total fair
value acquired
as at
30 April 2015
€m
Property, plant and equipment (note 13)
Other intangible assets (note 12)
Inventories
0.8
0.8
2.8
–
–
(0.2)
0.8
0.8
2.6
Total identifiable net assets
4.4
(0.2)
4.2
Goodwill
6.3
0.2
6.5
10.7
–
10.7
Total
The goodwill of €6.5m arising from the acquisition is attributable to the acquired customer base and economies of scale expected
from continuing the operations of the Group and HiM Retail B.V. The goodwill amortisation, which will be booked locally in the
Netherlands, is expected to be deductible for income tax purposes.
The revenue included in the consolidated statement of comprehensive income since 1 March 2015 contributed by the acquired
stores was €8.0m, the acquired stores also contributed a loss of €0.3m over the same period.
Had the acquired stores been consolidated from 1 May 2014, the consolidated statement of income would show pro-forma revenue
of €3,544.1m and retail profit of €77.7m.
35 Business combinations continued
Acquisition related costs of €1.0m have been charged to administrative expenses in the consolidated income statement for the year
ended 30 April 2015.
Business combinations in the prior year
On 31 March 2014, the Group through its subsidiary Etablissemants Darty et Fils (France) acquired 100 per cent of the share capital
of Mistergooddeal.com, one of France’s leading online electrical retailers.
In accordance with IFRS 3 Revised ‘Business Combinations’, goodwill on the acquisition of Mistergooddeal.com, provisionally
determined in the 30 April 2014 Annual report, has been adjusted. The adjustments were made to account for amendments to the
fair values of assets and liabilities acquired in March 2014.
The following table summarises the consideration paid for Mistergooddeal.com, the fair value of assets acquired and liabilities
assumed at the acquisition date.
Aggregate consideration to 30 April 2015
€m
Cash
Working capital adjustments arising at acquisition date
2.0
(0.1)
Total aggregate consideration to 30 April 2015
1.9
Recognised amounts of identifiable assets acquired and liabilities assumed
Property, plant and equipment (note 13)
Software (included in intangibles) (note 12)
Inventories
Trade and other receivables
Deferred tax
Total identifiable net assets
Goodwill
Total
Total fair value
acquired as
reported at
30 April 2014
€m
Fair value
adjustments
for the year
€m
Total fair value
acquired
restated as at
30 April 2015
€m
5.4
1.3
0.7
9.5
5.9
3.9
(24.7)
–
(1.3)
(0.7)
–
–
0.2
1.5
2.0
(0.3)
1.7
0.2
0.2
(0.1)
1.9
–
2.0
5.4
–
–
9.5
5.9
4.1
(23.2)
The carrying value of Mistergooddeal.com’s goodwill is impaired and an exceptional pre-tax charge of €0.2m has been recognised.
36 Related party transactions
Transactions carried out with related parties in the normal course of business are summarised below.
Joint ventures and associates
Dividends received
Value of products sold by the Group where an associate has provided credit facilities
Commission received from joint ventures
Amounts recoverable from joint ventures
Amounts recoverable from associates
Amounts payable to joint ventures
Amounts payable to associates
2015
€m
2014
€m
1.0
11.0
178.9
1.4
173.9
2.4
–
–
–
–
–
1.5
–
–
2015
€m
2014
€m
1.8
0.6
–
1.8
1.3
–
The associated undertakings provide credit facilities to customers on product sales.
Other related parties
Rent payments
Other payments for services
Outstanding balances at year end
All transactions are at arm’s length and balances are unsecured.
37 Principal subsidiaries
Company
Etablissements Darty et Fils S.A.S.
New Vanden Borre S.A.
BCC Holding Amstelveen B.V.
Mistergooddeal.com
Country of incorporation
Percentage owned
and voting rights
Description of
share classes owned
Main activity
France
Belgium
The Netherlands
France
99.7%
100.0%
100.0%
100.0%
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Retailing
Retailing
Retailing
Retailing
The Directors consider that to give full particulars of all subsidiary undertakings would lead to a statement of excessive length. A
full list of subsidiary undertakings, associates and joint ventures has been annexed to the Company’s latest annual return.
All subsidiary undertakings are included in the consolidation.
Report on the Company financial statements
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:
•
•
•
•
•
Our opinion
In our opinion, Darty plc’s Company financial statements
(the ‘financial statements’):
give a true and fair view of the state of the Company’s affairs
as at 30 April 2015;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of
the Companies Act 2006.
What we have audited
Darty plc’s financial statements comprise:
•
•
•
the Company balance sheet as at 30 April 2015;
the Company statement of total recognised gains and losses
for the year then ended; and
the notes to the financial statements, which include a
summary of significant accounting policies and other
explanatory information.
Certain required disclosures have been presented elsewhere in
the Annual report, rather than in the notes to the financial
statements. These are cross-referenced from the financial
statements and are identified as audited.
The financial reporting framework that has been applied in the
preparation of the financial statements is applicable law and
United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
Other required reporting
Consistency of other information
Companies Act 2006 opinion
In our opinion, the information given in the Strategic report and
the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements.
ISAs (UK & Ireland) reporting
Under International Standards on Auditing (UK and Ireland)
(‘ISAs (UK & Ireland)’) we are required to report to you if, in our
opinion, information in the Annual report is:
•
•
materially inconsistent with the information in the audited
financial statements; or
apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the Company acquired in
the course of performing our audit; or
•
otherwise misleading.
We have no exceptions to report arising from this responsibility.
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 financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Directors’ remuneration report – Companies Act 2006 opinion
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Other Companies Act 2006 reporting
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.
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 52, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and ISAs
(UK & Ireland). Those standards require us to comply 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 in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other
person to whom this report is 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 the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or error.
This includes an assessment of:
•
whether the accounting policies are appropriate to the
Company’s circumstances and have 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 consider necessary to
provide a reasonable basis for us to draw conclusions. We
obtain audit evidence through testing the effectiveness of
controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial
information in the Annual report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Group financial statements
of Darty plc for the year ended 30 April 2015.
John Ellis (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
17 June 2015
Company balance sheet
as at 30 April 2015
Fixed assets
Tangible fixed assets
Investments
Note
2015
€m
2014
€m
2
3
–
166.9
–
166.9
166.9
166.9
Total fixed assets
Current assets
Debtors due within one year
Creditors: amounts falling due within one year
4
5
Net current assets
Total assets less current liabilities
Net assets excluding retirement benefit liabilities
Creditors: amounts falling due after more than one year
Retirement benefits
109.1
276.0
276.0
6
Net assets including retirement benefit liabilities
Capital and reserves
Called up share capital
Other reserves
Profit and loss account
Total shareholders’ funds
113.6
(4.5)
(38.2)
139.2
(4.8)
134.4
301.3
301.3
(60.1)
237.8
241.2
8
158.9
0.6
78.3
158.9
0.6
81.7
9
237.8
241.2
7
Darty plc has not presented its own profit and loss account as permitted by Section 408 of the Companies Act 2006
Loss attributable to the Parent Company is €4.0m (2014: profit of €67.2m).
The notes on pages 113 to 118 form part of these financial statements
The financial statements on pages 112 to 118 were approved by the Board of Directors on 17 June 2015 and signed on its behalf by
Régis Schultz Director
Dominic Platt
Director
Company registration number: 4232413
Company statement of total recognised gains and losses
Note
(Loss)/profit for the financial year
Actuarial gains/(losses) on pension scheme
Total recognised gains relating to the year
8
8
6
2015
€m
2014
€m
(4.0)
7.8
11.0
67.2
0.6
(30.9)
14.8
36.9
Notes to the Company financial statements
1 Accounting policies
Basis of preparation
The financial information set out on pages 112 to 118 comprises the financial statements of Darty plc for the year ended
30 April 2015 prepared in accordance with the accounting policies set out below.
The financial statements of the Company are prepared on a going concern basis under United Kingdom Generally Accepted
Accounting Principles (UK GAAP) using the historical cost convention and are prepared in accordance with the Companies Act
2006 and applicable accounting standards in the United Kingdom. Principal accounting policies have been applied consistently
throughout the year.
Cash flow statement and related party disclosures
Under Financial Reporting Standard 1 (revised 1996) the Company is exempt from the requirement to prepare a cash flow
statement as the Company is a wholly owned subsidiary of Darty plc and is included in the consolidated Financial Statements of
Darty plc, which are publicly available. The Company is also exempt under the terms of FRS 8 from disclosing related party
transactions with entities that are part of the Darty plc Group.
Investments
In the Company balance sheet, investments in subsidiary undertakings are shown at cost adjusted for capital contributions relating
to share-based payments.
Tangible fixed assets
Tangible fixed assets are included in the balance sheet at cost, less accumulated depreciation and any provisions for impairment.
Depreciation of tangible fixed assets is charged to reflect a reduction from book value to estimated residual value over the
estimated useful life of the asset to the Company.
Tangible fixed assets comprise fixtures, fittings and equipment. These are depreciated over their estimated useful economic life of
five years on a straight-line basis.
The cost of awards to employees that take the form of shares or rights to shares are recognised over the period of the employee’s
related performance. Where there are no performance criteria, the cost is recognised when the employee becomes unconditionally
entitled to the shares. The cost of awards is measured as the fair value of the award at grant date less employee contributions.
Dividends
Dividend income is recognised when the right to receive payment is established.
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the period in which
the dividends are approved by the Company’s shareholders. Interim dividends are recognised in the period they are paid.
Retirement benefits
A defined contribution plan is a retirement benefit under which the Company pays fixed contributions into a separate entity. The
Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a retirement benefit
that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or more factors such as age, years of service and salary.
In accordance with FRS17, for defined benefit plans the liability recognised in the balance sheet is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for past service costs
which have not yet vested. The defined benefit obligation is calculated annually by independent actuaries using the projected unit
credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and
that have terms to maturity approximating to the terms of the related retirement benefit liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised immediately
in the profit and loss reserve.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefit expense when they are due.
Taxation
Current tax represents the expected tax payable (or recoverable) on the taxable income for the year using tax rates enacted or
substantively enacted at the balance sheet date and taking into account any adjustments arising from prior years.
Notes to the Company financial statements continued
Provision is made for deferred taxation in so far as a liability or asset has arisen as a result of transactions that had occurred by the
balance sheet date and have given rise to an obligation to pay more tax in the future, or the right to pay less tax in the future. An
asset has not been recognised to the extent that the transfer of economic benefits in the future is uncertain. Deferred tax assets
and liabilities recognised have not been discounted. Provision is made for UK or foreign taxation arising on the distribution to the
UK of retained profits of overseas subsidiary undertakings where dividends have been recognised as receivable.
Auditors remuneration
During the period the Company obtained the following services from the Company’s auditors at costs as detailed below:
Audit fees:
Fees payable to the auditor for the audit of the Company’s financial statements
Fees for other services:
Other non-audit services
2015
€m
2014
€m
0.4
0.4
–
0.3
0.4
0.7
2 Tangible fixed assets
Fixtures, fittings
and equipment
€m
Cost
At 1 May 2014
Additions
0.3
–
At 30 April 2015
0.3
Accumulated depreciation
At 1 May 2014
Charge for period
0.3
–
At 30 April 2015
0.3
Net book value
At 30 April 2015
–
At 30 April 2014
–
3 Investments
Shares in
subsidiary
undertakings
€m
Cost and net book value
At 30 April 2014
166.9
At 30 April 2015
166.9
The investment comprises 100.0 per cent of the shares in Kesa Holdings Limited.
The Directors believe the carrying value of the investments is supported by their underlying net assets.
4 Debtors due within one year
2015
€m
2014
€m
Owed by subsidiary undertakings
Prepayments
113.4
0.2
138.7
0.5
Total debtors due within one year
113.6
139.2
2015
€m
2014
€m
Other creditors
Accruals
0.1
4.4
0.1
4.7
Total creditors due within one year
4.5
4.8
5 Creditors: amounts falling due within one year
6 Retirement benefits
Retirement benefits liability
2015
€m
2014
€m
38.2
60.1
The Company operates a funded defined benefit pension scheme (‘The Comet Pension Scheme’) with assets held in a separate
trustee administered fund. The scheme was closed to new entrants on 1 April 2004 and future service accrual was ceased on 30
September 2007, with affected employees eligible to become members of the Group defined contribution scheme.. Following the
disposal of Comet, the Company assumed the liabilities associated with the UK Scheme.Comet ceased to be the participating
employer from the date of completion, 3 February 2012, with all member benefits, including any link to future salary increases,
ceasing from that date.
The UK scheme is valued by a qualified actuary every three years and a deficit recovery plan confirmed with the Trustees based on
an agreed schedule of contributions.The 31 March 2013 triennial valuation was agreed with the Trustees in March 2014 resulting in
fixed annual payments of £10.0m aiming to make good the £73m deficit by May 2019.Company contributions to be paid in 2015/16
total £10.0m (2014/15: £10.0m). The next triennial valuation is due as at 31 March 2016.
The UK scheme provides benefits for members in the form of a guaranteed level of pension payable for life. The level of benefits
provided depends on members’ length of pensionable service and salary up to 3 February 2012. The trustees are required to act on
behalf of the Scheme’s stakeholders in accordance with UK legislation and are responsible for the long-term investment and
funding strategy. In the UK scheme, pensions in payment are generally increased in line with inflation.
There is a risk to the Company that adverse experience (e.g. asset volatility, longevity experience) could lead to a requirement for
the Company to make additional contributions to recover any deficit that arises.
The expected rate of return on assets for the financial year ending 30 April 2015 was 5.9 per cent pa (year ending 30 April 2014:
4.8 per cent pa). This rate is derived by taking the weighted average of the long-term expected rate of return on each of the asset
classes that the plan was invested in at 30 April 2014, less investment expenses.
The Scheme’s investment strategy hedges 85 per cent of interest rate risk and 85 per cent of inflation risk using both UK
government bonds and a portfolio of swaps. This hedging strategy is reviewed and rebalanced regularly in light of any new
actuarial information that is available.
A qualified independent actuary has updated the actuarial valuations of the Comet Pension Scheme as at 30 April 2015 under
FRS17. The principal assumptions made by the actuaries were:
Discount rate
Rate of increase in pensionable salaries
Rate of pension increase (5 per cent LPI)
Price inflation
– RPI
– CPI
Expected return on assets
2015
%
2014
%
3.5
N/A
3.1
4.4
N/A
3.3
3.2
2.2
4.7
3.4
2.4
5.9
% pa
% pa
2.3
3.5
5.6
7.0
1.0
2.5
6.3
3.2
4.4
6.5
7.3
1.3
3.4
7.3
2015
€m
2014
€m
The expected return on assets for 2015/16 are set out below:
Gilts
Corporate bonds
Equity Option
Cash
Swaps
Alternatives
The amounts recognised in the balance sheet are determined as follows:
Present value of defined benefit obligation
Net liability recognised in the balance sheet
625.0
(586.8)
478.2
(418.1)
38.2
60.1
The major categories of plan assets as a percentage of total plan assets are as follows:
Equities
Gilts
Corporate Bonds
Equity derivatives
Cash
Swaps
Alternatives
2015
%
2014
%
4
28
8
19
1
31
3
6
0
13
10
27
1
37
6
6
2015
€m
2014
€m
The scheme does not invest in property or in the Company’s own securities.
The amounts recognised in operating profit are as follows:
Employer’s part of current service cost
–
–
Total operating charge
–
–
2015
€m
2014
€m
Expected return on scheme assets
Interest cost
(27.8)
23.4
(19.9)
18.8
Total charge/(credit) to finance income
(4.4)
(1.1)
The following amounts are included in finance income:
Reconciliation of present value of scheme liabilities
Opening present value of scheme liabilities
Interest cost
Benefits paid
Actuarial loss recognised in the STRGL
Comprising: Experience on benefit obligation
Changes in financial assumptions
Changes in demographic assumptions
Closing present value of scheme liabilities
2015
€m
2014
€m
478.2
–
22.0
–
(12.9)
75.2
449.5
–
18.8
–
(10.2)
5.6
(6.7)
81.9
–
10.6
(10.5)
5.5
62.5
14.5
625.0
478.2
Reconciliation of fair value of scheme assets
Opening fair value of scheme assets
Expected return on scheme assets
Contributions by employer
Benefits paid
Actuarial gain/(loss) recognised in the STRGL
Fair value of plan assets at end of period
The actual return on the scheme’s assets over the year was (€1.7m).
2015
€m
2014
€m
418.1
26.1
12.9
–
(12.9)
86.2
56.4
409.1
19.9
11.9
–
(10.2)
(25.3)
12.7
586.8
418.1
Movements in the deficit during the year
2015
€m
2014
€m
Opening FRS 17 (surplus)/deficit
Other finance costs
Contributions by the employer
Actuarial (gain)/loss recognised in the STRGL
60.1
–
(4.1)
(12.9)
(11.0)
6.1
40.4
–
(1.1)
(11.9)
30.9
1.8
Closing FRS 17 (surplus)/deficit
38.2
60.1
The amount recognised outside profit and loss in the statement of total recognised gains and losses (‘STRGL’) for 2014/15 is a gain
of €11.0m (2013/14: loss of €30.9m).
Amounts to be shown for the previous four periods
2015
€m
2014
€m
2013
€m
2012
€m
2011
€m
625.0
586.8
478.2
418.1
449.5
409.1
396.9
356.9
331.5
285.6
(Surplus)/deficit
38.2
60.1
40.4
40.0
45.9
Experience gains/(losses) arising on scheme assets:
Amount
Percentage of scheme assets
86.2
15%
(25.3)
(6%)
42.8
10%
(23.8)
(7%)
13.9
5%
6.7
1%
(10.6)
(2%)
–
–
–
–
Number
m
€m
Number
m
€m
1,000
300.0
1,000
300.0
529.6
158.9
529.6
158.9
Present value of funded obligations
Experience adjustments arising on scheme liabilities:
Amount
Percentage of the present value of scheme liabilities
(10.5)
(3%)
7 Share capital
2015
Authorised
Issued and fully paid
2014
Kesa Employee Share Trust
The Group operates an employee share trust, the Kesa Employee Share Trust (‘the Trust’), that owns 2,093,938 (2014: 2,093,938)
ordinary shares of 30 cents in Darty plc at 30 April 2015. These were acquired at an average cost of €1.94 (2014: €1.94) and
included in the balance sheet within retained earnings at a cost of €4.1m (2014:€4.1m). The shares are used to satisfy share
option exercises and the purchases are funded by cash contributions from participating companies. Dividends receivable on these
shares during the year have been waived. The administration expenses of the Trust are borne by the Trust. Shares will be allocated
by the Trust when relevant options under the scheme are exercised. The market value of the shares at 30 April 2015 was €2.1m
(2014: €2.6m).
8 Reserves
Profit and
loss account
€m
At 1 May 2014
Loss for the year
Dividends
Investments in ESOP shares
Actuarial gain on pension scheme recognised in the statement of total recognised gains and losses
81.7
(4.0)
(18.4)
0.2
7.8
11.0
At 30 April 2015
78.3
All retained profits are distributable.
Profit and
loss account
€m
At 1 May 2013
Profit for the year
Dividends
Actuarial loss on pension scheme recognised in the statement of total recognised gains and losses
62.7
67.2
(18.0)
0.1
0.6
(30.9)
At 30 April 2014
81.7
9 Statement of changes in shareholders’ funds
(Loss)/profit attributable to shareholders
Dividends
Actuarial profit/(loss) on pension scheme recognised in the statement of recognised gains and losses
Opening shareholders’ funds
Closing shareholders’ funds
2015
€m
2014
€m
(4.0)
(18.4)
0.2
7.8
11.0
241.2
67.2
(18.0)
0.1
0.6
(30.9)
222.2
237.8
241.2
2015
€m
2014
€m
Staff costs for the year
Wages and salaries
Social security costs
Other pension costs
4.4
0.5
0.2
4.2
0.4
0.1
Total staff costs
5.1
4.7
10 Employees
Average monthly number of administration staff employed during the period, including Directors, was 20 (2014: 21).
For details of remuneration of Directors employed by the Company, refer to the Report on Directors’ remuneration and related
matters on pages 40 to 51.
11 Dividends
Final paid 2014: 2.625 cents (2013: 2.625 cents) per share
Interim paid 2015: 0.875 cents (2014: 0.875 cents) per share
2015
€m
2014
€m
14.0
4.4
13.4
4.6
18.4
18.0
An interim dividend of 0.875 cents was paid to the ordinary shareholders of the Company on 1 April 2015. In addition the Board will
also recommend, at the forthcoming Annual General Meeting, the payment of a final dividend of 2.625 cents, payable on 13
November 2015 in relation to the year ending 30 April 2015.
The final dividend, once approved, will be paid to those persons on the Register of Members at the close of business on 23 October 2015.
Shareholder information
Registrar and transfer office
All enquiries relating to shareholdings should be addressed
to the Company’s Registrar, as follows:
By Mail: Computershare Investor Services PLC,
The Pavilions,
Bridgwater Road,
Bristol BS99 6ZZ
By phone: +44 (0)370 707 1102
By e-mail: [email protected]
Please indicate that you are a shareholder of Darty plc.
Investor Centre
Investor Centre is a free, secure share management website
provided by our Registrars. This service allows you to view your
share portfolio and see the latest market prices of your shares,
check your dividend payment and tax information, change your
address, update payment instructions and receive your
shareholder communications online. To take advantage of this
service, please log in at www.investorcentre.co.uk and enter
your Shareholder Reference Number and Company Code. The
information can be found on your last dividend voucher or
share certificate.
Dividend mandates
If you wish dividends to be paid directly into your bank
account through the BACSTEL-IP (Bankers’ Automated
Clearing Services) system, you should contact our
Registrars for a Dividend Mandate Form or apply online
at www.investorcentre.co.uk.
Electronic shareholder communications
We have entered into an arrangement with our Registrars
whereby shareholders are able to elect to receive shareholder
communications from the Company electronically, rather than
in paper format via the postal system.
We actively encourage shareholders to register now for our
electronic communications service through eTree campaign
run by our Registrars in conjunction with The Woodland Trust.
When you register for electronic communications, a tree will
be planted on your behalf with the Woodland Trust’s
‘Tree For All’ scheme in a UK area selected for reforestation.
The service enables you to save paper, contributing to a
greener countryside and reducing harmful carbon dioxide
emissions which impact climate change.
Share dealing service
We offer an internet and telephone share dealing service for
shareholders (in certain jurisdictions) in conjunction with
Computershare, our registrars.
Internet dealing:
The fee for this service will be 1 per cent of the value of each
sale or purchase, subject to a minimum charge of £30.00.
Stamp duty at 0.5 per cent is payable on purchases.
•
•
•
•
•
Up to 90-day limit orders available on shares.
Service is available to place orders out of market hours.
Log onto www.computershare.com/dealing/uk.
Telephone dealing:
The fee for this service will be 1 per cent of the value of the
transaction plus £35. Stamp duty at 0.5 per cent is payable
on purchases.
•
•
•
The share price at which you deal will be confirmed to you
whilst you are still on the telephone.
Service is available from 8.00am to 4.30pm Monday to
Friday excluding bank holidays.
Call +44 (0)370 703 0084.
No forms will need to be completed in advance and the
settlement period is ten business days after your trade has
been dealt in the market, for both internet and telephone share
dealing. Further information and copies of the terms and
conditions of both these services can be obtained by calling
+44 (0)370 703 0084
Gifting shares to your family or to charity
To transfer shares to another member of your family as a gift,
please ask the Registrars for a Gift Transfer Form. If you only
have a small number of shares whose value makes it
uneconomic to sell them, you may wish to consider donating
them to ShareGift, the share donation charity (registered
charity number 1052686). The relevant share transfer form
may be obtained from the Registrars. Further information
about the scheme is available from the ShareGift Internet Site
www.ShareGift.org.
In order to receive shareholder communications such as
notices of shareholder meetings and annual report and
accounts electronically rather than by post, you should
register your details via the Investor Centre/Shareholder
information and services page of Darty plc website
www.dartygroup.com. You can also register for electronic
communications via www.etreeuk.com/darty.
Group five-year summary
Revenue
Retail profit
Profit before tax
Taxation
2015
€m
2014
€m
2013
€m
2012
€m
2011
€m
3,512.1
74.9
51.3
3,404.4
85.5
72.1
3,375.4
80.9
71.4
3,465.0
111.0
103.5
3,547.9
148.7
133.6
32.9
(17.8)
37.4
(26.6)
18.9
(15.0)
81.9
(22.4)
119.4
(34.2)
15.1
(1.3)
10.8
(17.4)
3.9
(111.8)
59.5
(373.4)
85.2
(54.5)
13.8
(6.6)
(107.9)
(313.9)
30.7
Adjusted EPS (cents)
Basic EPS (cents)
5.8
2.7
6.5
(0.6)
7.9
(19.8)
14.8
(59.2)
20.1
6.0
Dividend (cents)
3.5
3.5
3.5
3.5
7.0
Profit from continuing operations
Summary balance sheet
Intangible assets and property, plant and equipment
Defined benefit pension liability
Net (debt)/funds
Other net liabilities
389.8
(103.4)
(223.8)
(386.5)
408.2
(104.6)
(185.2)
(435.3)
431.8
(84.8)
(150.6)
(460.2)
509.0
(69.6)
(126.5)
(429.9)
Net (liabilities)/assets
(323.9)
(316.9)
(263.8)
(117.0)
690.4
(71.9)
121.0
(523.4)
216.1
Notes
The results of prior years have been restated following the sale or disposal of Comet, Datart and the Turkish, Spanish and Italian
operations, now classified as discontinued operations.
Darty plc
Registered address
22-24 Ely Place
London EC1N 6TE
+44 (0)20 7269 1400
Registered in England
Company number: 04232413
For information visit
www.dartygroup.com
Darty plc Annual report 2014/15

9.8mm spine

Transcription

Similar documents

50 cent - Oak Grove College

Untitled - Caja Rural Granada

January 2014 Newsletter - Fresno Police Department Credit Union

An open letter to Jim Ratcliffe, Ineos` owner

Company Presentation

Housework? That`s a job for women say men

1.eps - Moneycontrol

Impact of Piracy on Cultural Diversity of European Music

EXECUTION VERSION 20 November 2015 CO-OPERATION