8. Intangible assets
Key Money Computer Computer software Total
software under development
----------------------- --------- --------- ------------------ -------
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 26 January 2013 983 - - 983
Additions - 2,670 2,598 5,268
Exchange rate movement (34) - - (34)
--------- --------- ------------------ -------
At 25 January 2014 949 2,670 2,598 6,217
Amortisation
At 26 January 2013 - - - -
Charge for the year - 137 - 137
Exchange rate movement - - - -
--------- --------- ------------------ -------
At 25 January 2014 - 137 - 137
--------- --------- ------------------ -------
Net book value
At 26 January 2013 983 - - 983
========= ========= ================== =======
At 25 January 2014 949 2,533 2,598 6,080
========= ========= ================== =======
The key money brought forward relates to the right to lease
stores that have a guaranteed residual value. The guaranteed value
arises because the next tenants based on current market conditions
are required to pay these amounts to the Group. Due to the nature
of this, the assets are considered recoverable and therefore not
amortised. The current market rate rents, for both stores included
within the intangible assets, continue to be above the rent under
the lease terms and hence no decline in values is foreseen.
The additions during the year relate to IT systems for the new
e-commerce platform for the UK site, ready for use in November 2013
and for the Microsoft Dynamics AX systems which will be implemented
across the group. The e-commerce costs are being amortised over 4
years from November 2013, when the new platform was ready for use.
The Microsoft systems project remains in its development phase,
therefore no amortisation has been charged during the year.
Amortisation on this asset will commence when these systems are
ready for use.
9. Property, plant and equipment
Leasehold Fixtures, Motor Assets Total
Improvements fittings vehicles under
& office construction
equipment
----------------------- ------------- ---------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 26 January 2013 57,439 45,384 101 1,637 104,561
Additions 5,744 5,603 9 1,244 12,600
Disposals (973) (634) - - (1,607)
Exchange rate movement (1,305) (540) - (42) (1,887)
------------- ---------- --------- ------------- -------
At 25 January 2014 60,905 49,813 110 2,839 113,667
Depreciation
At 26 January 2013 25,781 33,269 99 - 59,149
Charge for the year 5,677 5,073 2 - 10,752
Impairment 671 54 - - 725
Disposals (847) (392) - - (1,239)
Exchange rate movement (491) (312) - - (803)
------------- ---------- --------- ------------- -------
At 25 January 2014 30,791 37,692 101 - 68,584
------------- ---------- --------- ------------- -------
Net book value
------------- ---------- --------- ------------- -------
At 26 January 2013 31,658 12,115 2 1,637 45,412
============= ========== ========= ============= =======
At 25 January 2014 30,114 12,121 9 2,839 45,083
============= ========== ========= ============= =======
Leasehold Fixtures, Motor Assets Total
Improvements fittings vehicles under
& office construction
equipment
----------------------- ------------- ---------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 28 January 2012 44,279 37,358 126 3,725 85,488
Additions 13,302 8,431 - (1,876) 19,857
Disposals (120) (395) (25) - (540)
Exchange rate movement (22) (10) - (212) (244)
------------- ---------- --------- ------------- -------
At 26 January 2013 57,439 45,384 101 1,637 104,561
Depreciation
At 28 January 2012 21,282 28,410 116 - 49,808
Charge for the year 4,098 4,941 1 - 9,040
Impairment 513 252 - - 765
Disposals (84) (327) (18) - (429)
Exchange rate movement (28) (7) - - (35)
------------- ---------- --------- ------------- -------
At 26 January 2013 25,781 33,269 99 - 59,149
------------- ---------- --------- ------------- -------
Net book value
------------- ---------- --------- ------------- -------
At 28 January 2012 22,997 8,948 10 3,725 35,680
============= ========== ========= ============= =======
At 26 January 2013 31,658 12,115 2 1,637 45,412
============= ========== ========= ============= =======
Additions included within the assets under construction category
are stated net of transfers to other property, plant andequipment
categories. Transfers from the assets under construction category
in the period amounted to GBP11,021,838 (2013:GBP3,725,000) whilst
additions into this category were GBP12,223,089 (2013:
GBP1,637,000).
Impairment of property, plant and equipment
The Group has determined that for the purposes of impairment
testing, each store and outlet is a cash-generating unit.
Cash-generatingunits are tested for impairment if there are
indications of impairment at the balance sheet date.
Recoverable amounts for cash-generating units are based on value
in use, which is calculated from cash flow projections using data
from the Group's latest internal forecasts, the results of which
are reviewed by the Board. The key assumptions for the valuein use
calculations are those regarding discount rates, growth rates and
expected changes in margins. Management estimates discount rates
using pre-tax rates that reflect the current market assessment of
the time value of money and the risks specific to the
cash-generating units. Changes in selling prices and direct costs
are based on past experience and expectations of future changes in
the market.
The pre-tax discount rate used to calculate value in use is
derived from the Group's weighted average cost of capital.
The impairment losses relate to stores whose recoverable amounts
(value in use) did not exceed the asset carrying values. In all
cases, impairment losses arose due to stores performing below
projected trading levels.
The impairment charge of GBP0.7m for the 52 weeks ended 25
January 2014 relates to the carrying value of a retail store in the
Meatpacking district, New York and a retail store in Paris.
The impairment charge of GBP0.8m for the 52 weeks ended 26
January 2013 includes a charge in respect to some retail assets,
notably a retail development in the UK that has failed to deliver
on its potential.
10. Related Parties
The Company has a related party relationship with its directors
and executive officers.
Directors of the Company and their immediate relatives control
35.9% per cent of the voting shares of the Company.
At the 25 January 2014, No Ordinary Designer Label Limited
("NODL"), the main trading company owed Ted Baker Plc GBP39,111,000
(2013: GBP34,376,000). NODL was owed GBP59,184,000 (2013:
GBP57,111,000) from the other subsidiaries within the Group.
Transactions between subsidiaries were priced on an arms length
basis.
The Group has a 50% interest in a joint venture, with Flair
Industries Pty Ltd. As at 25 January 2014, the joint venture owed
GBP164,000 to the main trading company (2013: GBP225,000). In the
period the value of sales made to the joint venture by the Group
was GBP1,336,000 (2013: GBP808,000).
The Group considers the Board of executive directors as key
management.
11. Post balance sheet events
In February 2014 we came to a mutual agreement with a licence
partner to terminate an agreement earlier than anticipated due to a
variation in that licence partner's long term strategy following a
change in senior management.
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