ANNUAL REPORT AND FINANCIAL STATEMENTS … am pleased to report another set of strong results for the 52 weeks ending 30 December 2012. A pick-up in trading following the atypical

PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 A

ANNUAL REPORT AND FINANCIAL STATEMENTS 2012

AW_5420_Prezzo-FinRep2012.indd 1 22/04/2013 09:18

Contents

Financial highlights 3

Five year summary 4

Directors and advisors 5

Chairman’s statement 6

Report of the directors 8

Statement of directors’ responsibilities 11

Independent auditors’ report 12

Statement of comprehensive income 13

Statement of changes in equity 14

Balance sheet 15

Cash flow statement 16

Notes forming part

of the financial statements 17

Notice of annual general meeting 38

PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012


PREZZO – Belfast

Financial highlights

n Revenue up 17% to £144.5 million (2011 – £123.9 million)

n Adjusted* EBITDA up 16% to £25.5 million (2011 – £22.0 million)

n Adjusted* pre-tax profit up 11% to £18.3 million (2011 – £16.4 million)

n Statutory pre-tax profit of £17.3 million (2011 – £16.1 million)

n Adjusted* diluted EPS up 13% to 5.90 pence (2011 – 5.21 pence) n Diluted EPS is 5.58 pence (2011 – 5.09 pence)

n Proposed final dividend increased to 0.275 pence per share (2011 – 0.250 pence per share)

n 31 restaurants (2011 – 27) launched during the period

n Currently 211 restaurants trading

* excluding the impact of a £0.9 million (2011 – £0.3 million) charge for non-trading items (see note 12)

PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 3


Five year summary

*before non-trading items

Revenue (£m) Adjusted* profit before tax (£m)

Adjusted* EBITDA (£m) Number of restaurants at year end

2008 2009 2010 2011 201230

60

90

150

120

91.0104.8

85.9

123.9

144.5

5

10

15

20

2008 2009 2010 2011 2012

12.9

14.4

11.5

16.4

18.3

2008 2009 2010 2011 2012

15.4

17.0

10

15

20

25

30

18.8

22.0

25.5

70

130

100

160

190

220

2008 2009 2010 2011 2012

140 138

160

184

210

4 PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012


PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 5 PREZZO PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 5

Directors and advisors

DirectorsMichael J Carlton FCCA (Non Executive Chairman)

Jonathan S Kaye (Chief Executive Officer)

Kuldip S Sehmi (Executive Director)

Mehdi Gashi (Executive Director)

Alan J Millar ACA (Finance Director)

John D Lederer (Non Executive Director)

Adam Kaye (Non Executive Director)

Samuel Kaye (Non Executive Director)

Secretary and registered officeAlan J Millar ACA Johnston House 8 Johnston Road Woodford Green Essex IG8 0XA

Company number3919682

AuditorsBDO LLP 55 Baker Street London W1U 7EU

RegistrarsComputershare Investor Services PLC PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH

Nominated advisorCenkos Securities PLC 6.7.8. Tokenhouse Yard London EC2R 7AS

SolicitorsHoward Kennedy 19 Cavendish Square London W1A 2AW

Glovers LLP 6 York Street London W1U 6QD


I am pleased to report another set of strong results for the 52 weeks ending 30 December 2012. A pick-up in trading following the atypical sporting events of the summer, coupled with the continued momentum of our opening schedule has enabled us to deliver significant growth, with adjusted* pre-tax profits up 11% to £18.3m (2011 – £16.4m).

Results

For the 52 weeks ended 30 December 2012, revenues increased 17% to £144.5m (2011 – £123.9m), gross or restaurant profit increased 12% to £20.9m (2011 – £18.7m).

Adjusted* EBITDA increased 16% from £22.0m to £25.5m and adjusted* operating profit excluding non-trading items increased by 11% from £16.4m to £18.3m.

Adjusted* pre-tax profit increased by 11% to £18.3m (2011 – £16.4m) and after a £0.9m (2011 – £0.3m) charge for non-trading items (see details in note 9) stated pre-tax profit was £17.3m (2011 – £16.1m).

The effective tax rate for the period has been calculated at 25% (2011 – 27%). Adjusted* diluted earnings per share were up 13% to 5.90p (2011 – 5.21p) and diluted earnings per share were 5.58p (2011 – 5.09p).

Estate development

We launched 31 (2011 – 27) new restaurants in 2012 (three were leasehold units acquired in December 2011) and two restaurants were closed during the period and so at the end of the period there were 210 (2011 – 184) restaurants in the estate.

These openings included prime city centre locations in London (in the newly refurbished main concourse of Kings Cross Railway Station) as well as Manchester, Bristol and Bath. Other notable successes included Beaconsfield, Marlow, Southport and Chingford.

2012 was an important and successful year for our Chimichanga brand. With increasing confidence in our Mexican offering, we have expanded this concept in a wider range of locations (including Bournemouth, Bromley, Ealing and Bury St Edmunds) and by the end of the year we were trading from 28 units (2011 – 15 units).

So far this year, we have opened our first restaurant in Northern Ireland, in Victoria Square in Belfast, and we are on site in a further eight locations. Our property pipeline for 2013 is largely finalised and plans for 2014 and beyond are also taking shape. As a result we would anticipate opening around 25 new restaurants by the end of the year.

Cash flows and financing

Net cashflow generated from operations was 42% higher at £31.4m (2011 – £22.1m) and at 30 December net cash balances shown on the balance sheet amounted to £4.4m (2011 – £39,000). However, after making December month-end payments of over £5m on 31 December, the underlying increase in cash from operations was more like 19%.

After making payments of £4.2m (2011 – £3.7m) to settle an increasing corporation tax liability, there was some £27.2m (2011 – £18.4m) available for investment or financing.

During the year the cash outflow on property, plant and equipment was £24.1m (2011 – £22.3m), which covered capital expenditure for the fit out of new restaurants, as well as refurbishment and rebranding projects for the existing estate. However, we also sold one freehold and three leasehold properties, realising net cash proceeds of £1.4m (2011 – £488,000) from disposals. (In 2011, there was also a net cash outflow of £1.7m on acquisitions.)

We are comfortable that our continued strong cash generation, together with a modest short-term borrowing facility and a portfolio of readily saleable freehold properties will provide us with sufficient flexibility to comfortably fund our anticipated expansion plans for the foreseeable future.

Dividend

The Board recommends that the final dividend payment for the year is increased by 10% to 0.275p (2011 – 0.250p) per 5p ordinary share. This will be paid on 5 July 2013 to shareholders on the register on 14 June 2013.

Staff

The establishment of the Prezzo Training Academy which provides a wide range of skills and development courses for staff at all levels in the business is a clear sign that we recognise the importance of supporting our key people and helping them to achieve their full potential. Once again, I would like to take the opportunity to thank all our staff for the contribution they made to a very successful 2012.

Outlook

This is the fifth consecutive year that we have entered without a clear conviction that the UK economy can

Chairman’s statement



PREZZO – Beaconsfield

deliver sustained growth on any meaningful scale over the next twelve months. However, Prezzo has prospered during this period of uncertainty and we will continue to drive the business forward, striving for excellence in all that we do.

With a strong development pipeline in place and the prospect of more settled trading patterns over Summer 2013, the Board is confident of further progress in the year ahead.

Michael Carlton Chairman

10 April 2013

* excluding the impact of a £0.9 million (2011 – £0.3 million) charge for non-trading items (see note 12)



Report of the directors for the 52 weeks ended 30 December 2012

The Directors present their report together with the audited financial statements for the 52 weeks ended 30 December 2012 (2011 – 52 weeks ended 1 January 2012).

Results and dividends

The Statement of comprehensive income is set out on page 13 and shows the profit for the financial period.

The Directors recommend a final dividend for the period of 0.275p (2011 – 0.250p) per 5p ordinary share.

Principal activities, trading review and future developments

The Company’s principal activity is the operation of restaurants. Prezzo has continued to increase the representation of its principal brands across the UK during 2012 via a continued programme of organic openings and at 30 December 2012 there were 210 restaurants (2011 – 184) in the estate.

For the 52 weeks ended 30 December 2012, revenue rose 17% to £144.5m (2011 – £123.9m) and adjusted* profit before tax increased by 11% to £18.3m (2011 – £16.4m). Adjusted* earnings before interest, tax, depreciation and amortisation (adjusted* EBITDA) rose by 16% to £25.5m (2011 – £22.0m).

The effective tax rate for the year has been calculated at 25% (2011 – 27%). Adjusted* diluted earnings per share increased by 13% to 5.90p (2011 – 5.21p). Diluted earnings per share were 5.58p (2011 – 5.09p).

Gross profit (or restaurant contribution) increased by 12% to £20.9m (2011 – £18.7m) and gross profit margin was 14.5% (2011 – 15.1%). Central overheads were up 19% to £2.7m (2011 – £2.2m) reflecting a higher headcount required to manage the enlarged estate. As a result, adjusted* operating profit was 11% higher at £18.3m (2011 – £16.4m) and adjusted operating margin (before non-trading items) was 12.6% (2011 – 13.3%).

The Directors believe that our emphasis on providing a wide choice of quality dishes at affordable prices and in attractive and comfortable surroundings means that the business is well-positioned to achieve further growth. Our strong internal cash generation means that going forward we will now be able to fund expansion at a rate of 25-30 new restaurants each year without recourse to external financing and we anticipate this rate of openings again in the year ahead.

In addition to the quality of the food and drink we serve, we recognise that one of the most important aspects of our business is the interface between staff and our customers and we therefore take steps to ensure that customer service levels are high. To this end, we are committed to providing ongoing training and development for all our staff and we monitor their performance via a programme of regular mystery diner visits. The results of these visits together with customer correspondence are reviewed at each board meeting. The quantum of regular quarterly bonuses paid to branch, area and operations managers is determined by a number of qualitative criteria, in addition to financial performance at unit level.

A further review of the business and its financial performance is provided in the financial highlights on page 3 and the Chairman’s statement on page 6.

Principal risks and uncertainties

UK macro-economyThis is the fifth year we have entered into with very limited confidence that the UK economy can deliver sustained growth. The continuing sustainability and speed of the recovery remain uncertain and it is likely that the full impact of the Government’s combined measures to tackle the deficit are yet to be seen. While there is evidence that eating-out regularly is becoming increasingly ingrained in the spending patterns of our customers, consumer confidence remains a key driver of sales within our market and to the extent that this is undermined by higher unemployment, increases in personal taxation and household inflation, this could affect customer footfall. Our brands are positioned in the affordable segment of the casual dining market and we have a strong focus on our value proposition. Increasing interaction with a loyal customer base enables us to implement innovative marketing initiatives and provide targeted offers which can help to drive business in periods when footfall is lower.

Food cost inflation One of the Company’s key variable inputs is the cost of ingredients, food and drinks and recent experience has shown that strains in the wider global food market can have a noticeable effect on commodity prices and therefore the prices seen by our suppliers in markets closer to home in Europe. Following a period of relatively benign cost inflation, concerns over increased food price inflation began to resurface in the second half of 2012, reflecting the impact of climatic




conditions in some areas of the world. It is possible that the business will face higher input costs in the medium term. The Director and team responsible for supply chain management maintains a dialogue with key suppliers and longer-term fixed price contracts are entered into where possible to mitigate short-term price fluctuations.

Legislation driven cost increases In the past five to ten years many of the cost increases faced by businesses in the hospitality sector have been driven by new legislation. Many of these incremental costs have been in the area of employment costs, such as the introduction of the UK national minimum wage, but there have also been increased costs arising from an increasing burden of complying with more stringent health and safety standards and environmental costs. The next hurdle will be the cost of providing pension contributions for the majority of our employees from July 2013 and this trend is likely to continue. Given that the Company will always make every effort to be compliant with all areas of UK legislation and industry best practice, such cost pressures are largely beyond our control and will also be faced by our major competitors. The Company works with a number of

external consultants in specialist areas such as health and safety and waste disposal to ensure that business processes are optimised and best value is delivered while achieving compliance with best practice.

Competition in the restaurant property marketThe principal driver of growth in the business (except in 2009, when openings were deliberately curtailed due to macro-economic uncertainty) has been the consistent delivery of a substantial programme of new restaurant openings. A more uncertain environment, together with a significant tightening in the lending criteria across the UK corporate banking sector has actually led to a favourable environment for a cash-rich business such as Prezzo Plc over the last few years. However, it is likely that competition for high quality sites will now begin to increase again. The Board of Prezzo has many years of experience and expertise in this area of the business and the growing profile of the Prezzo brand, the increasing strength of our covenant and the close relationships we have forged with a range of external property advisors nevertheless leave the Company well-positioned even in a more competitive marketplace.

Directors and their interests

The directors of the Company during the period and their interests in the ordinary share capital of the Company were – Ordinary shares Ordinary shares of 5p each of 5p each 30 December 2012 1 January 2012

M J Carlton 940,000 940,000

J S Kaye 22,585,000 22,585,000

K S Sehmi 182,244 182,244

M Gashi (Appointed 16 July 2012) – –

A J Millar 100,000 100,000

A Kaye 8,412,107 8,412,107

S Kaye 8,177,608 8,177,608

J D Lederer 209,000 209,000

Since the period end and up to the date of this report there have been no other changes in the interests of directors. Details of directors’ interests in share options during the period are disclosed in note 7 to the financial statements.


Employees

The average number of employees and their remuneration is set out in note 6 to the financial statements.

Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities.

The Company takes a positive view of employee communication and has established systems for keeping employees informed of developments and also for regular consultation.

Creditors payment policy and practice

It is the Company’s policy to agree terms of business with suppliers prior to the supply of goods or services. In the absence of any dispute, the company pays wherever possible, in accordance with these agreed terms. Trade creditors at the period end amounted to 39 days (2011 – 37) of supplies.

Treasury policy

The Financial Controller who operates the company treasury function reports regularly to the Board. The Company does not trade in derivative-based financial instruments and the Company is exposed to interest rate risk only in so far as changes in base rates affect the amount of interest earned on its financial assets. Further information on financial instruments and the risks facing the business is contained in note 27 to the financial statements.

Donations

During the period, the Company collected £44,253 (2011 – £32,015) in discretionary contributions from its customers on behalf of Fight For Life, a registered charity that helps to provide care for young children with cancer. The Company made no political or charitable donations (2011 – £Nil).

Auditors

The directors who were in office at the date of approval of these financial statements have taken all the steps that they ought to have taken to make themselves aware of any information required by the Company’s auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.

BDO LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the Annual General Meeting.

By order of the Board

Alan Millar Company Secretary

10 April 2013

Report of the directors for the 52 weeks ended 30 December 2012




Statement of directors’ responsibilities

The Directors are responsible for preparing the annual 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 elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. 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 company and of the profit or loss of the company for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.

In preparing these financial statements, the Directors are required to –

• select suitable accounting policies and then apply them consistently:

• make judgements and accounting estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.


Independent auditors’ report to the members of Prezzo Plc

We have audited the financial statements of Prezzo Plc for the period ended 30 December 2012 which comprise the statement of comprehensive income, the statement of changes in equity, balance sheet, the cash flow statement and the related notes. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and Auditors

As explained more fully in the statement of directors’ responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion –

• the financial statements give a true and fair view of the state of the Company’s affairs as at 30 December 2012 and of its profit for the period then ended

• the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Directors for the financial period for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion –

• 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 are not in agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Matthew White (senior statutory auditor)

For and on behalf of BDO LLP (statutory auditor) London United Kingdom

10 April 2013

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).




Statement of comprehensive incomefor the 52 weeks ended 30 December 2012

Note 2012 2011 £’000 £’000

Revenue 4 144,524 123,873

Cost of sales 5 (123,614) (105,221)

Gross profit 20,910 18,652

Administration costs (3,582) (2,540)

Operating profit excluding non-trading items 18,255 16,427

Non-trading items 9 (927) (315)

Operating profit 8 17,328 16,112

Finance income 9 26Finance expense 10 (13) (7)

Profit before tax 17,324 16,131

Income tax expense 11 (4,380) (4,389)

Profit and total comprehensive income for the financial period 22 12,944 11,742

Attributable to – Equity shareholders 12,944 11,742

Earnings per share 12 Basic 5.66p 5.17p Diluted 5.58p 5.09p

The notes on pages 17 to 37 form part of these financial statements.



Statement of changes in equityfor the 52 weeks ended 30 December 2012

Share Share Capital Share Retained Total Capital Premium Redemption Option Earnings Reserve Reserve Reserve £’000 £’000 £’000 £’000 £’000 £’000

Balance at 3 January 2011 11,307 21,024 168 1,861 32,832 67,192

Total comprehensive income for the period – – – – 11,742 11,742

Dividend paid – – – – (511) (511)

Share-based payments

– credit to equity for the period – – – 91 – 91

Tax on share-based payments taken directly to equity – – – (92) – (92)

Transfer in respect of options exercised – – – (109) 109 –

Issue of new ordinary shares 78 307 – – – 385

Balance at 1 January 2012 and 2 January 2012 11,385 21,331 168 1,751 44,172 78,807

Total comprehensive income for the period – – – – 12,944 12,944

Dividend paid – – – – (572) (572)

Share-based payments – credit to equity for the period – – – 67 – 67

Tax on share-based payments taken directly to equity – – – 36 – 36

Transfer in respect of options exercised – – – (152) 152 –

Issue of new ordinary shares 73 348 – – – 421

Balance at 30 December 2012 11,458 21,679 168 1,702 56,696 91,703




Balance sheetat 30 December 2012

Company number – 3919682 Note 2012 2011 £’000 £’000

Non-current assets Intangibles 14 1,508 1,560Property, plant and equipment 15 112,957 97,431Prepaid operating leases 17 4,257 4,307Deferred tax asset 20 547 441

119,269 103,739Current assets Inventories 16 4,559 3,838Prepaid operating leases 17 3,426 3,131Trade and other receivables 18 5,975 3,925Cash and cash equivalents 4,367 39

18,327 10,933

Total assets 137,596 114,672

Current liabilitiesTrade and other payables 19 (32,499) (23,293)Current tax liabilities 19 (3,888) (3,842)

(36,387) (27,135)Non-current liabilities Accruals 19 (3,892) (3,316)Deferred tax liabilities 20 (5,614) (5,414)

(9,506) (8,730)

Total liabilities (45,893) (35,865)

Net assets 91,703 78,807

Equity Called-up share capital 21 11,458 11,385Share premium account 22 21,679 21,331Capital redemption reserve 22 168 168Share option reserve 22 1,702 1,751Retained earnings 22 56,696 44,172

Total equity attributable to equity shareholders 91,703 78,807

The financial statements were approved by the Board of Directors and authorised for issue on 10 April 2013 and signed on their behalf by M J Carlton.




Cash flow statementfor the 52 weeks ended 30 December 2012

Note 2012 2011 £’000 £’000

Cash flows from operating activitiesNet cash inflow from operating activities 26 31,398 22,112 Corporation tax paid (4,204) (3,736)

Net cash inflow from operating activities 27,194 18,376 Cash flows from investing activitiesFinance income 9 26 Payments to acquire property, plant and equipment (24,098) (22,343) Proceeds from sale of property, plant and equipment 1,387 488 Acquisition – (1,694) Net cash outflow from investing activities (22,702) (23,523)

Cash flows from financing activities Finance expense (13) (7)Issue of new ordinary shares 421 385 Equity dividend paid (572) (511) Net cash outflow from financing activities (164) (133)

Net increase/(decrease) in cash and cash equivalents 4,328 (5,280) Cash and cash equivalents as at 1 January 2012 39 5,319

Cash and cash equivalents as at 30 December 2012 4,367 39




Notes forming part of the financial statements for the 52 weeks ended 30 December 2012

1 General information

Prezzo Plc (“Prezzo”) is a public limited company (“the Company”) incorporated in the United Kingdom under the Companies Act 2006 (registration number 3919682). The Company is domiciled in the United Kingdom and its registered address is Johnston House, 8, Johnston Road, Woodford Green, IG8 0XA. The Company’s ordinary shares are traded on the Alternative Investment Market (“AIM”). Copies of the Annual Report will be sent out to shareholders. Further copies of the Interim Report to 1 July 2012 or the Annual Report and Accounts may be obtained from the above address or on the Corporate section of the Company’s website at www.prezzorestaurants.co.uk.

2 Accounting policies

(a) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) and its interpretations adopted by the International Accounting Standards Board (“IASB”) and as endorsed for use by companies listed on an EU regulated exchange.

(b) Basis of preparationThe financial statements are presented in sterling and rounded to the nearest thousand pounds. They are prepared on the historical cost basis, except for the treatment of certain financial instruments.

(c) Changes in accounting policiesThe following standards and interpretations, issued by the IASB or the International Financial Reporting Interpretations Committee (IFRIC), are effective for the first time in the current financial period and have been adopted by the Company with no significant impact on its results or financial position.

Amendment to IFRS 7 ‘Disclosures – Transfers of Financial Assets’ (effective for accounting periods beginning on or after 1 July 2011). This amendment has been endorsed for use in the EU.

Amendment to IFRS 1 ‘Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters’ (effective for accounting periods beginning on or after 1 July 2011). This amendment has been endorsed for use in the EU.

Amendment to IAS12 Deferred Tax: Recovery of Underlying Assets (effective for periods beginning on or after 1 January 2012). This amendment has been endorsed for use in the EU.

The following standards and interpretations issued by the IASB or IFRIC, have not been adopted by the Company as they were not effective for the current period. The Company is currently assessing the impact that these standards and interpretations will have on the presentation of its results in future periods.

Amendment to IAS1 ‘Presentation of Items of Other Comprehensive Income’ (effective for accounting periods beginning on or after 1 July 2012). This amendment has been endorsed for use in the EU.

IFRS 10 ‘Consolidated Financial Statements’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU (the mandatory effective date for the EU-endorsed version is 1 January 2014).

IFRS 11 ‘Joint Arrangements’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU (the mandatory effective date for the EU-endorsed version is 1 January 2014).

IFRS 12 ‘Disclosure of Interests in Other Entities’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU (the mandatory effective date for the EU-endorsed version is 1 January 2014).

IFRS 13 ‘Fair Value Measurement’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU.

IAS 27 ‘Separate Financial Statements’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU (the mandatory effective date for the EU-endorsed version is 1 January 2014).

IAS 28 ‘Investments in Associates and Joint Ventures’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU (the mandatory effective date for the EU-endorsed version is 1 January 2014.

IAS 19 ‘Employee Benefits’ (effective for accounting periods beginning on or after 1 January 2013). This interpretation has been endorsed for use in the EU.



2 Accounting policies (continued)

Amendment to IFRS 7 ‘Disclosures – Offsetting Financial Assets and Financial Liabilities’ (effective for accounting periods beginning on or after 1 January 2013). This amendment has been endorsed for use in the EU.

Amendment to IFRS 1 ‘Government Loans’ (effective for accounting periods beginning on or after 1 February 2010). This amendment has not yet been endorsed for use in the EU.

Annual Improvements to IFRSs (2009-2011 Cycle) – Minor amendments to various accounting standards, effective for periods beginning on or after 1 January 2013 onwards. These amendments have not yet been endorsed for use in the EU.

Amendments to IFRS 10, IFRS 11 and IFRS 12 ‘Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance’ (effective for accounting periods beginning on or after 1 January 2013). This amendment has not yet been endorsed for use in the EU.

Amendment to IAS 32 ‘Offsetting Financial Assets and Financial Liabilities’ (effective for accounting periods beginning on or after 1 January 2014). This amendment has been endorsed for use in the EU.

Amendments to IFRS 10, IFRS 12 and IAS 27 ‘Investment Entities’ (effective for accounting periods beginning on or after 1 January 2014). This amendment has not yet been endorsed for use in the EU.

IFRS 9 ‘Financial Instruments’ (effective for accounting periods beginning on or after 1 January 2015). This amendment has not yet been endorsed for use in the EU.

(d) RevenueRevenue represents amounts received or receivable for goods and services provided in the normal course of business (net of VAT and voluntary gratuities left by customers for the benefit of employees). Revenue is recognised at the point of delivery of goods and services to retail customers.

(e) Operating lease paymentsPayments made under operating leases are recognised in the Statement of comprehensive income on a straight line basis.

(f) Pre-opening costsProperty rentals and other related overhead expenses incurred prior to a new restaurant opening are expensed in the Statement of comprehensive income in the period that they are incurred. Similarly, the costs of training new staff during the pre-opening phase are written-off as incurred.

(g) Share-based paymentsThe Company has applied the requirements of IFRS2 Share-based payment. In accordance with the transitional provisions, the standard has been applied to all grants of equity instruments after 7 November 2002 that were unvested as at 1 January 2006.

The Company operates a number of equity-settled share-based payment schemes under which share options are granted to certain employees. The costs of equity-settled transactions are measured at fair value at the date of grant. Fair value is measured using the Black-Scholes model. In determining fair value, no account is taken of any vesting conditions, other than conditions linked to the price of the company’s shares (market-based conditions).

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided all other conditions are satisfied.

The fair value determined at the grant date is then expensed on a straight line over the vesting period, based on the Directors’ best estimate of the number of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. The movement in the cumulative expense since the previous balance sheet date is recognised in the Statement of comprehensive income, with the corresponding movement taken into equity.

Where the terms and conditions of options are modified before they vest or where options have been cancelled and reissued with modified terms, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of comprehensive income over the remaining vesting period.

(h) Operating profitOperating profit is stated after all expenses, including any profit or loss on disposal of property, plant and equipment, which is




considered to be a non-trading item, but before finance income or expenses. Non-trading items are items of income or expense which because of their nature and the events giving rise to them, are not directly related to the delivery of the company’s restaurant service to its patrons and therefore merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess more accurately trends in financial performance.

(i) Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the management team including the Chief Executive Officer, Executive directors and the Finance Director.

(j) TaxationThe tax expense included in the Statement of comprehensive income comprises both current and deferred tax. Current tax is the expected tax payable on the taxable income arising in the period reported on, calculated using tax rates enacted or substantively enacted as at the balance sheet date.

Tax is recognised in the Statement of comprehensive income except to the extent that IAS12 requires certain elements of the total tax expense to be recorded directly in equity. These elements are separately disclosed in the movement in shareholders’ equity and the movement in reserves.

Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying amounts of assets and liabilities recorded for reporting purposes and the amounts used for tax purposes, except for differences arising on the initial recognition of an asset or liability which affects neither accounting or taxable profit at the time of the transaction. Deferred tax is calculated on an undiscounted basis, at the tax rates that are expected to apply when the liability is settled or the asset is realised. Deferred tax is charged or credited to the Statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case deferred tax is also dealt with in equity.

The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

(k) Dividends In accordance with IAS10, Events after the balance sheet date, dividends declared after the balance sheet date are recognised in the period in which they are approved by shareholders, as no liability existed at the balance sheet date.

(l) Business combinations The financial statements incorporate the results of business combinations using the purchase method. In the balance sheet the identifiable assets and liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

(m) GoodwillAll business combinations, as defined by IFRS3 (Revised), are accounted for using the acquisition method. Goodwill represents the difference between the fair value of consideration paid and the fair value of the net identifiable assets acquired.

Goodwill is stated at the value so calculated less any accumulated provision for impairment. Goodwill is allocated to individual cash generating units and is then subject to a bi-annual impairment review.

(n) Trade marksTrade marks which have been acquired are stated at their estimated fair value on acquisition less any accumulated amortisation. Trade marks are amortised over an expected useful life of twenty years, however, this carrying value is also subject to a bi-annual impairment review. All expenditure on internally created trade marks is written-off as incurred.

(o) Property, Plant and EquipmentItems of property, plant and equipment are stated at cost less the accumulated charge for depreciation and any recognised impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset operate as intended.



2 Accounting policies (continued)

Depreciation is charged so as to write-off the cost of assets over their estimated useful economic lives. It is calculated at the following rates.

Freehold land Nil depreciation

Freehold properties 2% per annum

Freehold improvements 4% per annum

Leasehold improvements over the period of the lease

Fixtures, fittings and equipment 10% per annum

Computer equipment (included in Fixtures, fittings and equipment) 33.3% per annum

Restaurants under construction are not depreciated.

All property, plant and equipment is reviewed for impairment in accordance with IAS36 Impairment of Assets, when there are indications that the carrying value may not be recoverable.

(p) Impairment – non-financial assetsThe carrying values of the Company’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such condition exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. An impairment loss is recognised whenever the carrying value of an asset exceeds its recoverable amount and impairment losses are recognised in the Statement of comprehensive income.

(q) LeasesLeases are classified as finance leases whenever the terms of the lease are such that they transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Company currently has no finance leases.

Assets leased under operating leases are not recorded on the balance sheet. Rental payments are charged directly to the Statement of comprehensive income. Lease incentives, primarily rent-free periods, are capitalised and then systematically released to the Statement of comprehensive income over the period of the lease term. Payments made to acquire operating leases are treated as prepaid lease expenses and are amortised over the period of the lease.

(r) InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis. Net realisable value is based on estimated selling price less any further costs to be incurred up until the point of sale.

(s) Financial instruments The carrying amounts of cash and cash equivalents, trade receivables, other accounts receivable, trade payables and other accounts payable approximate to their fair value. The Company does not hold or issue derivative financial instruments.

Financial assets – Loans and receivables

Trade and other receivables: The trade receivables arising in the business are not amounts owed to the company from retail customers, but consist of annual retrospective rebates which are received from trade suppliers shortly after the end of the period in which they are earned and accrued. Trade receivables are initially recognised at fair value and subsequently carried at amortised cost, reduced by any appropriate allowances for irrecoverable amounts. Trade receivables are provided against where there is objective evidence that amounts are not recoverable. Other receivables are initially recognised at fair value and then subsequently carried at amortised cost.

Cash and cash equivalents: Cash and cash equivalents comprise cash on hand and demand deposits and other short-term, highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities – Other liabilities

Trade and other payables: Trade and other payables are initially recognised at fair value and then subsequently carried at amortised cost.

(t) EquityEquity issued by the Company is recorded as amounts received less direct issue costs.




3 Critical accounting estimates and judgements

The preparation of financial statements under IFRS requires the company to make estimates and judgements that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions. The estimates and assumptions that are considered to have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are discussed in more detail below.

(a) AccrualsIn order to provide for all valid liabilities which exist at the balance sheet date, the finance team is required to estimate and accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty. Such accruals are based on management’s best judgement and past experience. Delayed billing in some significant expense categories such as utility costs can lead to sizeable levels of accruals. The total value of accruals as at the balance sheet date is set out in note 19.

(b) Useful lives of property, plant and equipmentProperty, plant and equipment are depreciated over their estimated useful lives. Useful lives are based on the management’s estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes to these estimates – the current rates of depreciation are set out in the accounting policy in note 2(o) – can result in significant variations in the carrying value and amounts charged to the Statement of comprehensive income as depreciation in a particular period.

(c) Asset impairmentIn carrying out an impairment review in accordance with IAS36 it has been necessary to make estimates and judgements regarding the future performance and cash flows generated by individual trading units which cannot be known with certainty. Past performance will often be taken as the best available guide to future performance, unless it is known that the circumstances surrounding a particular trading unit have changed. Where the circumstances surrounding a particular trading unit have changed or will change in the future then it can be even more difficult to forecast future performance. For these reasons the actual impairment required in the future may differ from the charge made in the financial statements. Details of any impairment charge required in the financial statements are provided in note 9.

(d) Share-based paymentThe Company operates equity-settled shared-based remuneration schemes for employees. Employee services received and the corresponding increase in equity are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is estimated by using the Black Scholes valuation model on the date of grant based on certain assumptions. Those assumptions are discussed in note 28 and include among others the dividend growth rate, expected volatility, expected life of the options and the number of options expected to vest.

(e) Deferred taxationIn calculating the deferred tax asset in relation to share options which will be exercised in the future, the share price as at the balance sheet date is required to be used as the best available estimate of the value of options at the point that they are exercised. As the share price may be at a different level when share options are finally exercised, this could lead to a different deferred tax asset being crystallised. The directors are of the opinion that the Company will generate sufficient taxable profits in the future to utilise this deferred tax asset.

The deferred tax liability provided in the accounts is based on temporary differences between the tax written down values of assets and liabilities and their carrying values in the accounts and as such it is dependent on assumptions made in the Company’s corporation tax computations. The assumptions on the proportion of certain elements of capital expenditure which will be eligible for tax relief are subjective and the final calculations agreed with HMRC could differ from the provision made in the financial statements.



4 Revenue and operating segments

Turnover is wholly attributable to the principal activity of the company and arises solely within the United Kingdom.

Each restaurant within the business is an operating segment, and their results are reported under IFRS separately to the chief operating decision-maker to make decisions and allocate resources. These are aggregated together for reporting purposes because they share similar economic characteristics including a similar customer base and the nature of the products and services.

As a result, the Company has only one reportable segment, being “Restaurants”, the results of which are included within the primary statements. The chief operating decision-maker refers to an “adjusted” measure of performance which is a measure of profit after deducting certain non-trading items, which are detailed in note 9. Details of the depreciation charges during the year are included in note 8.

5 Cost of sales 2012 2011 £’000 £’000

Cost of sales can be further analysed as follows – Excluding pre-opening costs 122,462 104,269 Pre-opening costs 1,152 952

123,614 105,221

6 Employees 2012 2011 £’000 £’000

Staff costs (including directors) consist of – Wages and salaries 42,816 36,198Social security costs 3,276 2,759Equity-settled share-based payment schemes (see note 28) 67 91

46,159 39,048

Of this total cost, £44,421,000 (2011 – £37,538,000) was included within cost of sales and the remaining £1,738,000 (2011 – £1,510,000) was included in administration expenses. The average number of employees, including directors, during the period was 2,896 (2011 – 2,510) with 49 (2011 – 44) of these working within the administrative functions and the remainder working in the restaurants. The company does not have a pension scheme and does not pay any pension contributions.




7 Directors 2012 2011 £’000 £’000

Directors’ emoluments 502 403

Salary and fees Salary and fees 2012 2011 £’000 £’000

Individual directors’ remuneration for the period was as follows –

M J Carlton 15 15J S Kaye 92 92 K S Sehmi 165 150 A J Millar 132 126 M Gashi (Appointed July 2012) 78 – J D Lederer 10 10A Kaye 5 5S Kaye 5 5

502 403

Options granted to directors and not exercised at 30 December 2012 were as follows–

Date of grant Number Exercise price Exercisable between of shares per share

J D Lederer 30 April 2004 80,000 23.0p April 2007 – April 2014

K S Sehmi 30 April 2004 2,000,000 23.0p April 2007 – April 2014

K S Sehmi 22 September 2005 200,000 50.0p September 2008 – September 2015

K S Sehmi 24 May 2006 100,000 52.5p May 2009 – May 2016

K S Sehmi 28 December 2012 50,000 67.75p December 2015 – December 2022

M Gashi 4 May 2005 200,000 52.5p May 2009 – May 2016

M Gashi 22 September 2005 25,000 50.0p September 2008 – September 2015

M Gashi 24 May 2006 20,000 52.5p May 2009 – May 2016

M Gashi 24 November 2008 80,000 26.0p November 2011 – November 2018

M Gashi 10 June 2010 100,000 38.8p June 2013 – June 2020

M Gashi 11 November 2011 50,000 57.0p November 2014 – November 2021

M Gashi 28 December 2012 100,000 67.75p December 2015 – December 2022

A J Millar 24 November 2008 500,000 26.0p November 2011 – November 2018

A J Millar 10 June 2010 250,000 38.8p June 2013 – June 2020

A J Millar 11 November 2011 50,000 57.0p November 2014 – November 2021

A J Millar 28 December 2012 100,000 67.75p December 2015 – December 2022

The options are exercisable between three and ten years following the date of the grant. The middle market price of the company’s shares at 30 December 2012 was 67.75p and had traded between 55p and 70p over the 52 weeks ended 30 December 2012.

250,000 options (2011 – 50,000) over ordinary shares were granted to Directors during the period and the aggregate IFRS2 charge in respect of options granted to Directors was £20,450 (2011 – £27,835). Further details on the share option schemes and how the company accounts for the cost of share options granted under IFRS2 are provided in note 28.

370,000 (2011 – 363,160) options were exercised by Directors during the period and therefore the total gain on exercise of options by directors was £154,905 (2011 – £175,666).



8 Profit from operations 2012 2011 £’000 £’000

This has been arrived at after charging –

Staff costs (see note 6) 46,159 39,048 Depreciation 7,249 5,588 Loss on disposal of property, plant and equipment and inventory 826 507Impairment of property, plant and equipment 245 10Impairment of intangibles 49 – Auditors’ remuneration – audit services 82 80 – tax compliance 30 30Operating lease rentals 13,503 11,332

Of the total of £826,000 (2011 – £507,000) loss on disposal of property, plant and equipment and inventory, a £815,000 loss (2011 – £489,000) is included within cost of sales and a loss on disposal of £11,000 (2011 – £18,000) is included within non-trading items (see note 9).

9 Non-trading items – charged to administrative expenses 2012 2011 £’000 £’000

Loss on sale of property, plant and equipment and inventory 11 18 Payments made in respect of termination of lease (28) 75 Provision for onerous lease 628 135 Provision for impairment of fixed assets 245 10 Provision for impairment of intangibles 49 – Site abort costs 22 47 Expenses in connection with acquisition – 184 Negative goodwill arising on acquisition (see note 29) – (154)

927 315

During the period, the net sales proceeds arising from the sale of interests in freehold & leasehold properties was £1,387,000 (2011 – £488,000) and resulting in a profit of £169,000 (2011 – £163,000). Then taken together with the write-off of £108,000 (2011 – £181,000) rebranding costs and the write-off of £72,000 (2011 – Nil) crockery stocks, the overall loss on disposal from these transactions was £11,000 (2011 – £18,000).

The Company has provided £628,000 in respect of two leasehold properties (2011 – £135,000 in respect of one leasehold property) which are no longer trading, reflecting the Directors’ current best estimate of costs likely to be incurred in excess of any benefit derived from these sites.

In accordance with IAS36 Impairment of Assets, the Company has carried out a review of the carrying values of plant, property and equipment, taking into account the current trading performance and anticipated future cashflows discounted at 10% in order to assess whether there is any indication of impairment. Assets are carried at their recoverable amount which is the higher of fair value less costs to sell or their economic use in the business. When a trading unit where recent performance and anticipated cashflows would suggest that it may have no economic value in use to the business has been identified, it has been valued at net realisable value based on the Directors’ experience of the commercial property market and their view of its likely value on disposal.

As a result of the above process, a provision for impairment of £2,095,000 (2011 – £435,000) has been made against the book value of seven (2011- two) properties. However, the Board has also identified six other properties which had previously been impaired and where performance has improved to such a degree that it is now appropriate to reverse £1,850,000 (2011 – £425,000) of this historic impairment. As a result, there was a net impairment charge of £245,000 (2011 – £ 10,000).




The net book value of trade marks previously acquired has been assessed by the Board and £44,000 (2011 – Nil) has been written off in the current period as the recoverable amount is deemed less than the book value. In addition, £5,000 (2011- Nil) of purchased goodwill in respect of a lease which has now expired has been written-off, taking the total provision for impairment of intangibles to £49,000 (2011 – Nil).

In accordance with IFRS 3 (Revised) Business Combinations, all expenses incurred in connection with acquisitions have been expensed in the Statement of comprehensive income in the period in which they were incurred. No acquisition costs were incurred in the period (2011 – £184,000, primarily professional fees paid to legal advisors).

10 Finance expense 2012 2011 £’000 £’000

Bank interest paid 13 7

13 7

11 Income tax expense 2012 2011 £’000 £’000

UK Corporation tax Current tax on profit for the period 4,250 3,900

Total current tax 4,250 3,900 Deferred tax Credit in respect of change in future rate of taxation (450) (364) Origination and reversal of temporary differences 631 864 Temporary differences on rolled over gains on property disposals 19 – Share-based payment temporary difference (70) (11) Total deferred tax 130 489 Total expense in the statement of comprehensive income 4,380 4,389

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The differences are explained on the next page.



11 Income tax expense (continued) 2012 2011 £’000 £’000

Profit before tax 17,324 16,131

Tax on profit at the average rate of corporation tax in the UK of 24.5% (2011 – 26.5%) 4,244 4,275

Effects of Credit in respect of change in future rate of taxation (450) (364) Depreciation on ineligible fixed assets 598 511 Non-qualifying impairment charges 21 3 (Profit)/Loss on sale of non-qualifying assets (77) (36) Adjustment in respect of share options (191) (121) Other 235 121

Tax expense for the period as shown above 4,380 4,389

The taxation charge in future periods will be influenced by any changes in the rate of taxation, the occurrence, if any, and quantum of future non-trading items, any gains arising on any disposal of freehold properties and the influence of the future share price on the deferred tax asset in respect of share options.

12 Earnings per share 2012 2011 pence pence

Basic earnings per share 5.66 5.17Diluted earnings per share 5.58 5.09 Adjusted basic earnings per share 6.00 5.30Adjusted diluted earnings per share 5.90 5.21

Earnings per share has been calculated using the numbers shown below – 2012 2011 £’000 £’000

Profit for the financial period 12,944 11,742Non-trading items (see note 9) 927 315Estimated taxation effect of non-trading items (170) (37)

Adjusted profit for the financial period 13,701 12,020

An adjusted earnings per share figure has been provided to show the level of earnings per share before the impact of non-trading items as set out in note 9. 2012 2011 Number Number

Weighted average number of ordinary shares in issue 228,540,264 226,912,191 Impact of dilutive share options 3,499,443 3,695,235

Diluted weighted average number of ordinary shares 232,039,707 230,607,426 The weighted average number of ordinary shares is adjusted to take into account the dilutive impact of share options granted to employees. 1,217,000 options (2011 – 508,000) were excluded from this calculation due to the fact that they were non-dilutive on the basis of the average share price during the period.




Adjusted profit before tax for headline reporting purposes was calculated as follows – 2012 2011

£’000 £’000

Profit before taxation 17,324 16,131Non-trading items (see note 9) 927 315 Adjusted profit before taxation 18,251 16,446 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was £25,507,000 (2011 – £22,017,000).

13 Dividends 2012 2011 £’000 £’000

Amounts recognised as distributions to equity shareholders in the period 572 511 The dividend payment recognised during 2012 was the final dividend declared in respect of the 52 weeks ended 1 January 2012 of 0.250p (2010 – 0.225p)

2012 2011 £’000 £’000

Proposed final dividend 630 569

Proposed final dividend for the period ended 30 December 2012 of 0.275p (2011 – 0.250p)

The proposed final dividend for the period ended 30 December 2012 is subject to approval by shareholders at the AGM to be held on 6 June 2013 and is not recognised as a liability in these financial statements.

14 Intangibles Trade Goodwill Marks Total £’000 £’000 £’000

At 3 January 2011 1,086 49 1,135

Purchased goodwill arising on acquisition 427 – 427 Trade mark acquired – – – Amortisation of trade marks – (2) (2)

At 1 January 2012 and 2 January 2012 1,513 47 1,560

Impairment of goodwill (5) – (5)Amortisation of trade marks – (3) (3) Write-off of trade mark (see note 9) – (44) (44)

At 30 December 2012 1,508 – 1,508

The recoverable amount of the goodwill has been determined on a value in use basis. This has been based on the performance of the sites since reopening under the Prezzo brand and management’s forecasts, which assume that these sites will perform at least as well as the market generally. The forecasts take into account management’s experience and are discounted at a rate of 10%.



15 Property, plant and equipment Freehold land, Short Fixtures Restaurants properties and leasehold fittings and under improvements improvements equipment construction Total £’000 £’000 £’000 £’000 £’000

Cost At 3 January 2011 23,367 57,369 22,492 3,720 106,948Additions 8,928 8,822 6,126 912 24,788 Reclassification 4,587 (966) 74 (3,695) – Acquisition 81 660 161 – 902Disposals (297) (213) (1,064) – (1,574) At 1 January 2012 and 2 January 2012 36,666 65,672 27,789 937 131,064

Additions 511 15,477 8,634 539 25,161 Reclassification (185) 1,039 22 (876) – Disposals (1,068) (1,019) (2,120) – (4,207)

At 30 December 2012 35,924 81,169 34,325 600 152,018

DepreciationAt 3 January 2011 1,797 16,169 10,648 – 28,614 Provided for the period 1,057 2,253 2,278 – 5,588 Impairment provisions – 10 – – 10 Disposals – – (579) – (579)

At 1 January 2012 and 2 January 2012 2,854 18,432 12,347 – 33,633

Provided for the period 945 3,304 3,000 – 7,249 Impairment provisions – 41 204 – 245 Disposals (27) (889) (1,150) – (2,066)

At 30 December 2012 3,772 20,888 14,401 – 39,061

Net book value At 30 December 2012 32,152 60,281 19,924 600 112,957

At 1 January 2012 33,812 47,240 15,442 937 97,431 At 3 January 2011 21,570 41,200 11,844 3,720 78,334

For details of impairment provisions please see note 9.




16 Inventories 2012 2011 £’000 £’000

Raw materials and consumables 1,991 1,621 Crockery and utensils 2,568 2,217 4,559 3,838

In the Directors’ opinion, there is no material difference between the replacement cost of stocks and the amounts stated above.

The Company recognised stock purchases of £35,533,000 in the Statement of comprehensive income in the 52 weeks ended 30 December 2012 (2011 – £31,933,000). The amount of inventories written-off in the period and included in non-trading items was £72,000 (2011 – £Nil).

17 Prepaid operating leases 2012 2011 £’000 £’000

Held within current assets 3,426 3,131 Held within non-current assets 4,257 4,307

7,683 7,438

Prepaid operating leases has two components. Included in amounts held within one year is the sum of £3.1m (2011 – £2.8m) which represents quarterly instalments on operating leases paid in advance. In addition, there is a further £4.6m (2011- £4.6m) which is made up of lease premiums, which IFRS requires to be treated as rent paid in advance and amortised over the length of the lease, normally over 20 or 25 years. As a result, £0.3m (2011 – £0.3m) is classified within current assets, with the remaining balance included in non-current assets.

18 Trade and other receivables 2012 2011 £’000 £’000

Trade and other receivables 3,578 1,927 Prepayments and accrued income 2,397 1,998

5,975 3,925

All amounts shown fall due for payment within one year.



19 Trade and other payables 2012 2011 £’000 £’000

Trade payables 16,158 9,923 Taxation and social security 4,562 3,219 Corporation tax 3,888 3,842 Other payables 2,074 1,973 Accruals 9,705 8,178

All held within current liabilities 36,387 27,135

Held within non-current liabilities Accruals 3,892 3,316

20 Deferred tax 2012 2011 £’000 £’000

Deferred tax asset arising from share options At 1 January 2012 441 522

Credit to the Statement of comprehensive income (see note 11) 70 11 Movement taken direct to equity 36 (92) At 30 December 2012 547 441 2012 2011 £’000 £’000

Deferred tax liability At 1 January 2012 5,414 4,914 Charge to the Statement of comprehensive income (see note 11) 200 500

At 30 December 2012 5,614 5,414

The deferred tax liability shown above can be analysed as follows – 2012 2011 £’000 £’000

Accelerated capital allowances 4,617 4,250 Other short term temporary differences 591 578

Capital gains rolled over 406 586

5,614 5,414




21 Share capital Authorised 2012 2011 2012 2011 Number Number £’000 £’000

Ordinary shares of 5p each 300,000,000 300,000,000 15,000 15,000 Allotted, called up and fully paid 2012 2011 2012 2011 Number Number £’000 £’000

Ordinary shares of 5p each 229,153,941 227,693,649 11,458 11,385

Movements in share capital Number £’000

At 3 January 2011 226,134,175 11,307Ordinary shares issued 1,559,474 78

At 1 January 2012 and 2 January 2012 227,693,649 11,385Ordinary shares issued 1,460,292 73

At 30 December 2012 229,153,941 11,458

22 Movement in reserves Share Capital Share Premium Redemption Option Retained Reserve Reserve Reserve Earnings £’000 £’000 £’000 £’000

At 3 January 2011 21,024 168 1,861 32,832

Total comprehensive income for the period – – – 11,742 Dividend – – – (511) Share-based payment schemes charge for the period – – 91 – Movement in deferred tax asset on share options – – (92) – Transfer in respect of options exercised – – (109) 109 Issue of new ordinary shares 307 – – –

At 1 January 2012 and 2 January 2012 21,331 168 1,751 44,172

Total comprehensive income for the period – – – 12,944Dividend – – – (572) Share-based payment schemes charge for the period – – 67 – Movement in deferred tax asset on share options – – 36 – Transfer in respect of options exercised – – (152) 152 Issue of new ordinary shares 348 – – –

At 30 December 2012 21,679 168 1,702 56,696

The nature and purpose of each of the reserves within shareholders’ equity is explained below.Share premium reserve – the accumulated amount subscribed for share capital in excess of nominal value.Capital redemption reserve – includes amounts transferred from the share capital reserve in order to maintain shareholders capital following the buyback and cancellation of equity shares. Share option reserve – reflects the credit to equity made in respect of the charge for share options together with the related deferred tax movements.Retained earnings – the cumulative gains and losses recognised in the Statement of comprehensive income together with other items which are required to be taken direct to equity.



23 Related party transactions

The directors are considered to be the key management personnel. Details of directors’ remuneration is given in note 7. Other related party transactions which took place with during the period are as follows –

Trading transactions Property rentals paid Amounts owed to related parties to related parties 2012 2011 2012 2011 £’000 £’000 £’000 £’000

Key management personnel 545 545 – –Significant shareholders 743 686 – –

The rents paid to related parties are considered to be a reasonable reflection of the market rate for the property.

P Kaye, a significant shareholder, has beneficial & non-beneficial interests in 108,994,308 shares (2011 – 108,994,308), representing 47.6% (2011 – 47.9%) of the issued share capital of the company. Capital transactionsOn 27 August 2010, the Company agreed to act as legal guarantor and as a party to an agreement in which Tasty PLC, a related party company, purchased two leasehold units from Caffe Uno Brasseries Limited. The total potential outstanding liability under this guarantee (based on annual rents totaling £122,000) at the end of the period was £1,175,000 (2011 – £1,297,000).

On 14 December 2011, the Company agreed to act as legal guarantor and as a party to an agreement in which Tasty PLC, a related party company, purchased one leasehold units from Caffe Uno Brasseries Limited. The total potential outstanding liability under this guarantee (based on an annual rent of £82,250) at the end of the period was £704,000 (2011 – £786,000).

24 Future commitments under operating leases Property Property Leases Leases 2012 2011 £’000 £’000

The total future rental payments outstanding under non-cancellable operating leases as at 30 December 2012 are set out below –

Within one year 13,632 12,023 Within two to five years 55,130 48,021 Over five years 165,563 150,818

234,325 210,862

Leases for land and buildings are subject to rent reviews.




25 Capital commitments 2012 2011 £’000 £’000

Authorised and contracted 1,467 1,432

As at the balance sheet date, the Company had capital commitments in respect of contracts for the fit out works at three (2011 – four) additional new leasehold sites with a total value as shown above.

26 Reconciliation of profit before tax to net cash inflow from operating activities 2012 2011 £’000 £’000

Profit before taxation 17,324 16,131 Finance income (9) (26) Finance expense 13 7 Depreciation and amortisation 7,252 5,590 Share-based payment charge 67 91 Loss on disposal of property, plant and equipment and inventory 826 507 Impairment of property, plant and equipment 245 10 Impairment of intangibles 49 – Negative goodwill recognised on acquisition – (154)Increase in inventories (793) (782) Increase in receivables (2,294) (1,110) Increase in payables 8,718 1,848

Net cash inflow from operating activities 31,398 22,112



27 Financial risks

The Company is exposed to certain risks arising from its use of financial instruments. The Company does not make any use of derivative-based financial instruments, however, IFRS7 requires that it provides the following disclosure on its financial assets and liabilities as set out below.

The Company’s financial assets and liabilities are shown on the face of the balance sheet and in the table below and they can be classified wholly as either loans and receivables or other liabilities. The Company has operated with a net cash balance throughout the period and consequently has no bank debt or other loan obligations. 2012 2011 £’000 £’000

Financial assetsTrade and other receivables 3,578 1,927Cash and cash equivalents 4,367 39Financial liabilitiesTrade and other payables 18,232 11,896

In accordance with IAS39, all financial assets are classified as loans and receivables and all financial liabilities are held at amortised cost. In the directors’ opinion, there is no material difference between the book value and the fair value of any of the financial instruments.

The Company has some exposure to credit risk, interest rate risk and liquidity risk. The Company does not have any material exposure to currency risk. There has been no material change to the financial instruments used within the business during the period and therefore no material changes to the risk management policies put in place by the Board which are now discussed below.

The Board has overall responsibility for the determination of the Company’s risk management objectives and policies. Whilst acknowledging this responsibility, it has delegated the authority and day to day responsibility for designing and operating systems and controls which meet these risk management objectives to the finance and administration function. The Board regularly reviews the effectiveness of these processes in meeting its objectives and considers any necessary changes in response to changes within the business or the environment in which it operates.

Credit riskCredit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets held at the balance sheet date. The Company’s maximum exposure to credit risk by type of financial asset equals the carrying value of financial assets shown in 2012 and 2011.

2012 2011 £’000 £’000

Trade and other receivables are due – Current 3,505 1,857Within 30-60 days – – Within 61-90 days – – 91 days and over 73 70 3,578 1,927

There are no amounts within receivables that are past due (2011 – Nil).

All receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active market. In practice, the company has limited exposure to credit risk as the receivables in the balance sheet are predominantly receivable from well established trade suppliers or landlords. These relationships are monitored closely and given the ongoing nature of trading with such counterparties, the likelihood of default is considered to be limited. As a result, no provision for doubtful debts has been made in the financial statements.




Company policy is that cash collected at its retail branches is banked on a regular and frequent basis to ensure that security risks are minimised and that cash resources are utilised efficiently. An analysis of cash deposits held is provided to Board Directors on a weekly basis and any changes in strategy for the treasury function are discussed and approved at Board level at regular monthly meetings. Cash is deposited with AA rated, UK-based financial institutions, in funds that are readily converted into known amounts of cash and the credit risk on such assets is considered to be limited.

Interest rate riskInterest rate risk is the risk that the value of financial assets will fluctuate due to changes in market interest rates. The company’s income and operating cash flows and the value of its financial assets are largely independent of changes in market interest rates. Low levels of surplus funds are invested in short-term secured deposit accounts such that the company is not unduly exposed to market interest rate fluctuations.

Interest income received on such deposits in the period amounted to £9,000 (2011 – £19,000) and represented 0.05% (2011 – 0.1%) of adjusted profit before taxation (see note 12). A 1% movement in market interest rates would have had significantly less than 1% impact on profits in either the current or comparative periods.

Liquidity riskLiquidity risk arises from the Company’s management of working capital, including cash and cash equivalents and fixed term deposits. The Board’s policy is to manage its working capital flows such that it will always have sufficient cash to allow it to meet its liabilities as and when they become due.

Detailed budgeted cash flow forecasts are prepared for the Board setting out anticipated working capital flows together with future obligations from capital projects in progress and the resulting impact on its cash balances.

At the balance sheet date, the Company had committed bank borrowing facilities of £6,000,000 (2011 – £3,000,000) available to it. After the balance sheet date the facility was increased to £7,500,000 for a period of two months in order to fund a freehold property purchase and this has now reverted to £6,000,000. None of the facility was drawn down at the balance sheet date. The Company’s treasury management policy is discussed in the Report of the Directors.

2012 2011 £’000 £’000

Trade and other payables are due for settlement – Current 18,232 11,896Within 30-60 days – –Within 61-90 days – – 91 days and over – –

18,232 11,896

CapitalThe Company considers its capital to comprise its ordinary share capital, share premium, capital redemption reserve, the share option reserve and accumulated retained earnings.

The primary objective of the Company is to maximise the return for equity shareholders through a combination of capital growth and equity distributions. In order to achieve its objectives in this area, the Company seeks to maintain a capital structure appropriate to its size, strategy for growth and underlying business risks.



28 Share-based payments 2012 2011 £’000 £’000

The charge for share-based remuneration recorded in the financial statements comprises –

Equity-settled schemes 67 91

The Company believes that share ownership by executive directors and key staff strengthens the link between their personal interests and those of the shareholders. It therefore operates both approved and unapproved share option schemes, under which options are granted in order to assist in the incentivisation and recruitment of key staff. IFRS2 (Share-based payment) requires that the fair value of such equity-settled transactions is calculated and systematically charged to the Statement of comprehensive income over the vesting period. Details of outstanding share options and the calculation of this charge are set out below.

Options under all of the schemes are granted at the average of the middle market price of the shares during the three dealing days prior to the grant. Awards will vest after three years of additional service have been completed, providing that growth in normalised earnings per share has exceeded growth in the retail price index by on average 2% (5% for the 2007 CSOP scheme) over this 3 year period from the date of grant. Options may then be exercised over the remaining seven years of the contractual life of the option.

At 30 December 2012 outstanding executive share options for directors and employees to subscribe to ordinary shares of 5p each were –

Exercise price Number Exercisable (pence) Date granted of shares between

approved 23.0 30 April 2004 135,000 April 2007 – April 2014 56.3 4 May 2005 1,054,280 May 2008 – May 2015 53.5 14 December 2007 10,000 December 2010 – December 2017 26.0 24 November 2008 635,200 November 2011 – November 2018 38.8 10 June 2010 285,320 June 2013 – June 2020 57.0 10 November 2011 274,000 November 2014 – November 2021 67.8 28 December 2012 288,000 December 2015 – December 2022 unapproved 5.8 21 April 2003 40,000 April 2006 – April 2013 23.0 30 April 2004 2,780,000 April 2007 – April 2014 56.3 4 May 2005 1,032,008 May 2008 – May 2015 50.0 22 September 2005 430,000 September 2008 – September 2015 52.5 24 May 2006 305,000 May 2009 – May 2016 26.0 24 November 2008 579,800 November 2011 – November 2018 38.8 10 June 2010 521,680 June 2013 – June 2020 57.0 10 November 2011 175,000 November 2014 – November 2021 67.8 28 December 2012 480,000 December 2015 – December 2022

2012 2012 2011 2011 Weighted Weighted

average average exercise price exercise price Number Pence Number Pence

Outstanding at the beginning of the period 9,826,580 32.8p 11,148,054 32.6p Option grants during the period 768,000 67.75p 508,000 57.0p Exercised during the period (1,460,292) 28.8p (1,559,474) 24.7p Forfeited during the period (109,000) 48.11p (270,000) 50.9p

Outstanding at the end of the period 9,025,288 35.16p 9,826,580 32.8p




The exercise price of options outstanding at the end of the period ranged between 5.75p and 67.75p (2011 – 5.75p and 57.0p) and their weighted average contractual life was 3.4 years (2011 – 4.0 years). Of the total number of options outstanding, 7,001,668 (2011 – 8,461,580) had vested and were exercisable at the end of the period. The weighted average exercise price of these options was 36.4p (2011 – 35.0p).

768,000 new options (2011 – 508,000) were granted during the period. The weighted average fair value of each option granted during the period was 38.75p. 1,460,292 options were exercised during the period (2011 – 1,559,477) and the weighted average value of options exercised was 28.8p (2011 – 24.7p).

The following information is relevant in the determination of the fair value of options granted during the period under the equity-settled share based remuneration schemes operated by the Company. 2012 2011

Equity settled Option pricing model used Black Scholes Black ScholesWeighted average share price at grant date (pence) 67.75p 57.0p Exercise price (pence) 67.75p 57.0p Weighted average contractual life (days) 3,650 3,650 Expected volatility (percentage) 40% 40%Expected dividend growth rate (percentage) 0.9% 0.9%Risk-free interest rate (percentage) 4% 4%

The volatility assumption, measured at the standard deviation of expected share price returns, is based on a statistical analysis of daily share prices over the last three years.

The Company has taken advantage of the exemption under IFRS2 and has therefore not provided any charge for options granted before 7 November 2002.

29 Acquisitions

In the prior year the Company undertook two acquisitions which were accounted for under IFRS 3 (revised). The net impact of these acquisitions was the recognition at fair value of £902,000 of property, plant and equipment, £500,000 of rent premiums (accounted for as prepaid operating lease expenses), and £19,000 of inventories. The total consideration paid was £1,694,000 which led to the recognition of £427,000 of positive goodwill and £154,000 of negative goodwill which was recognised in the income statement during the period with the credit included in non-trading items (see note 9).



Notice of annual general meeting

NOTICE IS HEREBY GIVEN that the 2013 Annual General Meeting of Prezzo Plc will be held at Prezzo, 17 Hertford Street, Mayfair, London W1J 7RS on Thursday 6 June 2013 at 10.00 am for the following purposes, namely As Ordinary Business, to consider and, if thought fit, pass the following resolutions which will be proposed as Ordinary Resolutions –

1 To receive and adopt the Report of the Directors and financial statements of the Company for the 52 weeks ended 30 December 2012, together with the Report of the Auditors thereon.

2 To re-elect Mr John Lederer as a Director who retires in accordance with the Company’s Articles of Association and, being eligible, offers himself for re-election.

3 To re-elect Mr Kuldip Sehmi as a Director who retires in accordance with the Company’s Articles of Association and, being eligible, offers himself for re-election.

4 To re-elect Mr Mehdi Gashi as a Director who retires in accordance with the Company’s Articles of Association and, being eligible, offers himself for re-election.

5 To re-elect Mr Alan Millar as a Director who retires in accordance with the Company’s Articles of Association and, being eligible, offers himself for re-election.

6 To re-appoint BDO LLP as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting at which financial statements for the Company are presented and to authorise the Directors to determine the Auditors’ remuneration.

7 To approve the Directors recommendation that a dividend of 0.275p per 5p ordinary share be declared in respect of the 52 week period ended 30 December 2012, such dividend to be paid on 5 July 2013 to members registered as at close of business on 14 June 2013.

As Special Business, to consider and, if thought fit, pass the following resolutions which will be proposed, as to resolution 8 as an Ordinary Resolution and as to resolutions 9 and 10 as Special Resolutions –

8 That the Directors be and are hereby authorised under Section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the capital of the Company (“shares”) and to grant rights to subscribe for or to convert any securities into shares up to an aggregate nominal amount of £3,871,865 at any time or times during the period from the date of passing of this Resolution until 15 months thereafter or (if sooner) until the conclusion of the next Annual General Meeting, unless any offer or agreement is made before the end of that period in which case the Directors may allot shares or grant rights to subscribe for or to convert any security into shares pursuant to such offer or agreement as if the power granted by this Resolution had not expired.

9 That subject to the passing of the previous Resolution, the Board be and is hereby empowered pursuant to Section 570(1) of the Companies Act 2006 to allot or make offers or agreements to allot equity securities (within the meaning of Section 560(1) of the said Act) for cash pursuant to the authority conferred by the previous Resolution as if sub-section (1) of Section 561 of the said Act did not apply to any such allotment provided that this power shall be limited –

a) to the allotment of equity securities in connection with a rights issue in favour of ordinary shareholders where any equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective number of ordinary shares held by them; and

b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal value of £1,719,030 and shall expire on the date of the next Annual General Meeting of the Company after the passing of this Resolution, save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such an offer or agreement as if the authority conferred had not expired.



10 That the Company be and is generally and unconditionally authorised for the purposes of section 693(4) of the Companies Act 2006 to make one or more market purchases of its Ordinary Shares on the London Stock Exchange, provided that –

(a) the maximum aggregate number of Ordinary Shares authorised to be purchased is 34,380,591 (representing 15 per cent. of the Company’s issued ordinary share capital);

(b) the maximum price which may be paid for an ordinary share is the amount equal to the greater of (i) 5 per cent above the average of the middle market quotations for the Ordinary Shares for the five days before the purchase is made and (ii) the higher of the price of the last independent trade and the highest independent bid at the time of purchase of the ordinary shares;

(c) the minimum price which may be paid for an ordinary share is its nominal value;

(d) unless previously renewed, varied or revoked, the authority shall expire at the conclusion of the Company’s next Annual General Meeting or 15 months from the date of passing this resolution if earlier;

(e) the Company may make a contract or contracts to purchase Ordinary Shares under this authority before the expiry of the authority which will or may be executed wholly or partly after the expiry of the authority, and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts.

By Order of the Board

A J Millar Company Secretary 10 April 2013

Registered Office Johnston House8 Johnston RoadWoodford GreenEssex IG8 0XA



Notice of annual general meeting

Notes

1 Any member of the Company entitled to attend and vote at the Annual General Meeting (“AGM”) is also entitled to appoint one or more proxies to attend, speak and vote instead of that member. A member may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member. A proxy may demand, or join in demanding, a poll. A proxy need not be a member of the Company but must attend the AGM in order to represent his appointor. A member entitled to attend and vote at the AGM may appoint the Chairman or another person as his proxy although the Chairman will not speak for the member. A member who wishes his proxy to speak for him should appoint his own choice of proxy (not the Chairman) and give instructions directly to that person. If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a right to appoint any proxies under the procedures set out in these Notes. Please read Note 7 below. Under section 319A of the Companies Act 2006 (CA 2006), the Company must answer any question a member asks relating to the business being dealt with at the AGM unless:

• answering the question would interfere unduly with the preparation for the AGM or involve the disclosure of confidential information;

• the answer has already been given on a website in the form of an answer to a question; or

• it is undesirable in the interests of the Company or the good order of the AGM that the question be answered.

2 To be valid, a Form of Proxy and the power of attorney or other written authority, if any, under which it is signed or an office or notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 of such power and written authority, must be delivered to Computershare Investor Services at The Pavillions, Bridgwater Road, Bristol, BS99 6ZY not less than 48 hours (excluding weekends and public holidays) before the time appointed for holding the AGM or adjourned meeting at which the person named in the Form of Proxy proposes to vote. In the case of a poll taken more than 48 hours (excluding weekends and public holidays) after it is demanded, the document(s) must be delivered as aforesaid not less than 24 hours (excluding weekends and public holidays) before the time appointed for taking the poll, or where the poll is taken not more than 48 hours (excluding weekends and public holidays) after it was demanded, be delivered at the meeting at which the demand is made.

3 In order to revoke a proxy instruction a member will need to send a signed hard copy notice clearly stating the intention to revoke the proxy appointment to Computershare Investor Services at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. This revocation notice must be received by Computershare Investor Services before the AGM or the holding of a poll subsequently thereto. If a member attempts to revoke his or her proxy appointment but the revocation is received after the time specified then, subject to Note (4) directly below, the proxy appointment will remain valid.

4 Completion and return of a Form of Proxy will not preclude a member of the Company from attending and voting in person. If a member appoints a proxy and that member attends the AGM in person, the proxy appointment will automatically be terminated.

5 Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that only those holders of the Company’s shares registered on the Register of Members of the Company as at 6 p.m. on 8 June 2010 or, in the event that the AGM is adjourned, on the Register of Members 48 hours before the time of any adjourned meeting, shall be entitled to attend and vote at the said AGM in respect of such shares registered in their name at the relevant time. Changes to entries on the Register of Members after (the above mentioned date and time) shall be disregarded in determining the right of any person to attend and vote at the AGM.

6 As at 10 April 2013, the Company’s issued share capital comprised 229,203,941 shares. The total number of voting rights in the Company as at 10 April 2013 is 229,203,941.



7 If you are a person who has been nominated under section 146 of the CA2006 to enjoy information rights (“Nominated Person”):

• You may have a right under an agreement between you and the member of the Company who has nominated you to have information rights (“Relevant Member”) to be appointed or to have someone else appointed as a proxy for the AGM;

• If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights;

• Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you.

8 A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share.

9 A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, the proxy will vote or abstain from voting at his or her discretion. The proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the AGM.

10 Except as provided above, members who have general queries about the AGM should call Computershare Investor Services on 0870 707 1245.

11 Members may not use any electronic address provided either in this notice of AGM, or any related documents (including the Chairman’s letter and proxy form), to communicate with the Company for any purposes other than those expressly stated.

Documents on display

The following documents will be available for inspection at the Company’s head office up to the date of the AGM and at the meeting itself:-

1 The Register of Director’s Interests in the share capital of the Company

2 Copies of all service contracts/letters of appointment for periods in excess of one year made with the Directors of the Company

3 A copy of the Memorandum and Articles of Association of the Company



Aberdeen

Aldeburgh

Aldershot

Alton

Amersham

Arundel

Aylesbury

Banstead

Barnet

Barnstaple

Bath

Beaconsfield

Beccles

Beckenham

Belfast

Belsize Park

Beverley

Billericay

Bishops Stortford

Blandford

Boston

Bournemouth

Braintree

Brentwood

Bridgwater

Brighton

Bristol

Broadstairs

Bromley

Bromsgrove

Buckhurst Hill

Buckingham

Bury St Edmunds

Camberley

Cambridge

Canterbury

Cardiff

Chatham

Cheam

Chelmsford

Cheltenham

Cheshire Oaks

Chichester

Chingford

Chislehurst

Christchurch

Clacton on Sea

Cobham

Cockfosters

Colchester

Crawley

Didcot

Dorchester

Ealing

East Grinstead

Eastbourne

Eastleigh

Edinburgh

Egham

Eltham

Ely

Enfield

Epping

Euston

Exeter

Exmouth

Falmouth

Farnham

Finchley

Gainsborough

Glasgow

Glasshouse St

Gloucester

Godalming

Greenwich

Guildford

Hailsham

Halifax

Halstead

Harpenden

Harrogate

Harrow

Haverhill

Haymarket

Haywards Heath

Hertford

Hitchin

Hornchurch

Horsham

Hull

Ipswich

Kensington

Kettering

Kings Cross

Kings Lynn

Kingston

Leamington Spa

Leatherhead

Leicester

Lewes

Lincoln

Lymington

Lyndhurst

Maidenhead

Maidstone

Maldon

Manchester

Marble Arch

Marlborough

Marlow

Mayfair

Midhurst

Mill Hill

Milton Keynes

New Brighton

New Oxford St

Newbury

Newmarket

North Audley St

Northampton

Northumberland Ave

Northwood

Norwich

Nottingham

Oswestry

Oxford

Peterborough

Pinner

Plymouth

Port Solent

Radlett

Reading

Redhill

Reigate

Ringwood

Restaurant locations

Romsey

Rugby

Saffron Walden

Salisbury

Sevenoaks

Sheffield

Shepperton

South Woodford

Southampton

Southport

Spalding

St Albans

St Martins Lane

Stamford

Stanmore

Stevenage

Stratford Upon Avon

Street

Sudbury

Swadlincote

Taunton

Tenterden

Thame

Torquay

Tring

Tunbridge Wells

Upminster

Uxbridge

Victoria

Wandsworth

Watford

Welwyn Garden City

Weybridge

Weymouth

Whitstable

Wimbledon

Wimbourne

Winchester

Wokingham

Woodbridge

Woodford Green

Yeovil

York


CHIMICHANGA – New Brighton, Wirral



PREZZO – Beaconsfield





“ With a strong development pipeline in place and the prospect of more settled trading patterns in 2013, the Board is confident of further progress in the year ahead.”

Prezzo Plc Johnston House, 8 Johnston Road, Woodford Green, Essex IG8 0XA

Tel: 0845 602 3257

PREZZO – Bristol



