ANNUAL REPORT AND ACCOUNTS
2016
Annual Report and Accounts 2016 HOTEL CHOCOLAT GROUP PLC
Not all chocolates are created equal
REGISTERED OFFICE
Hotel Chocolat Group plc
Mint House 
Newark Close 
Royston 
Hertfordshire SG8 5HL The leading UK premium chocolate company, 
making innovative and affordable luxury chocolates.
We sell our chocolate direct to our customers 
via subscription, online and our 83 stores.
Our strong British brand is based 
on an ethos of: 
Originality  ·  Authenticity  ·  Ethics £8.3m capital investments completed
INCLUDING NEW STORES AND FACTORY UPGRADES
COMPANY OVERVIEW
Highlights 01
At a glance 08
STRATEGIC REPORT
Chairman’s statement 10
What sets us apart? 12
Our business model 14
Our markets 16
Our strategy 18
Chief Executive’s statement 20
Financial review 24
Risk management 26
GOVERNANCE
Corporate social responsibility 28
Board of Directors 30
Corporate governance statement 32
Audit Committee report 35
Remuneration report 36
Directors’ report 38
Statement of Directors’ responsibilities 40
FINANCIAL STATEMENTS
Independent auditor’s report 41
Consolidated Statement of  
Comprehensive Income 42
Consolidated Statement of Financial Position 43
Consolidated Statement of Cash Flow 44
Consolidated Statement of Changes in Equity 45
Notes to the financial statements 46
Company Statement of Financial Position 77
Company Statement of Cash Flow 78
Company Statement of Changes in Equity 78
Notes to the Company financial statements 79
Company information 81
Highlights
‘Hotel Chocolat is the nation’s  
favourite premium chocolate brand’
Allegra 2015
REVENUE
15 14 16
£75.7m
£81.1m
£91.1m
15 14 16
£(1.6)m
£7.8m
£12.3m
EBITDA (pre-exceptional)
£91.1m 
REVENUE (2015: £81.1m)
(Proforma £92.6m, 2015: £82.6m)
£12.3m
EBITDA (pre-exceptional)
(2015: £7.8m)
+57% 
EBITDA GROWTH
18 Academy of Chocolate Awards
WON
+12% 
SALES GROWTH
 Digital Growth +20%
£8.2m 
PROFIT BEFORE TAX (pre-exceptional)
(Profit before tax £5.6m, 2015: £2.9m)
£4.1m 
PROFIT AFTER TAX
(2015: £2.0m)
Contents
Company overview
Strategic report Governance Financial statements
01 COMPANY OVERVIEW Highlights Originality
We believe in being fresh, creative and innovative, 
doing things in a different way
HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 02 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts A STRONG DESIGN ETHOS
For our new Rare & Vintage range, we took inspiration  
from pleated fabric to sculpt a beautiful look which is  
also perfect for breaking into thin pieces.
 
Strategic report Governance Financial statements
Company overview
COMPANY OVERVIEW Originality 03 Authenticity
We are the real thing, our focus on “more cocoa,  
less sugar” results in a superior taste
HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 04 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts TREE TO BAR CHOCOLATE MAKING
Visitors to our beautiful Saint Lucian plantation hotel,  
called Boucan, can make their own chocolate bar from  
beans grown on the estate.
Strategic report Governance Financial statements
05
Company overview
COMPANY OVERVIEW Authenticity 05 Ethics
We focus on ensuring that we deliver sustainable 
outcomes for all our stakeholders; our Engaged 
Ethics programme aims to unite cocoa growers  
and lovers of fine chocolate, being fair to both
HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 06 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts A BLUEPRINT FOR SUSTAINABLE  
COCOA GROWING
We partner with more than 150 Saint Lucian growers, 
committing to pay a fair price and support productivity 
improvements, including the supply of high quality cocoa 
seedlings. We are now applying the same techniques to the 
higher volume Ghanaian cocoa used in our house blends.
Strategic report Governance Financial statements
Company overview
07 COMPANY OVERVIEW Ethics At a glance
The leading UK premium chocolate brand, manufacturing 
innovative and accessibly priced luxury chocolates. We sell  
our chocolate direct to customers via subscription, online  
and our 83 stores. 
Key product ranges
Geographic footprint
The business began in the 1990s with online and 
subscription, and our first physical store followed in 2004. 
Our store roll-out plan is informed and supported by a 
database showing the buying patterns of our loyal multi-
channel customers. Our store formats range from 100 sq 
ft to 6,000 sq ft and trade profitably across the UK. We 
are also developing our international retail knowledge with 
three stores in Copenhagen.
SELF PURCHASE
Selectors 
Over 120 flavours
GIFT & OCCASION
Boxed chocolates 
Seasonal specials
RARE & VINTAGE
Connoisseur’s choice 
Provenance & tasting notes
OTHER
Impulse & children’s gifts 
Drinking chocolate 
Unique wine and spirits
80 3 1
UK  
STORES
DANISH  
STORES
BOUTIQUE 
HOTEL
08 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Company overview
Strategic report Governance Financial statements
The story so far
Our growth strategy
2016
IPO 
Sales £91.1m 
EBITDA £12.3m 
83 stores
1990s
First website launched  
under ‘ChocExpress’ brand
1998  
Tasting Club  
subscriptions launched
2003  
Hotel Chocolat brand created
2004  
First store opens in Watford
2012 
Boucan Hotel opens  
in Saint Lucia
60 stores
2008  
Factory opens in  
Huntingdon, Cambridge
22 stores
2014 
New Shop+Cafe format
77 stores
The IPO in May 2016 represents just one milestone  
in a journey that began in 1997 with the launch of  
our first consumer facing website.
Our business model has evolved and grown by making natural extensions to our existing products and services, testing them and once 
proven investing in roll-out. There is significant growth headroom in the UK and we will continue to open new stores. Our current website 
is successful with digital revenues growing +20% in FY16, but there remains opportunity to add new features and services. We design and 
make our own chocolates; investing in manufacturing capacity and capability will allow us to keep pace with sales growth, improve product 
margins and develop innovative new products. 
Open  
new stores
INCLUDING  
SHOP+CAFE FORMAT
Upgrade  
digital platform 
AND IMPROVE  
GIFTING OPTIONS
Increase capacity  
& capability
IN PRODUCTION  
AND SUPPLY CHAIN
Company overview
Strategic report Governance Financial statements
09 COMPANY OVERVIEW At a glance Chairman’s statement
OVERVIEW
FY16 represented a landmark year in the 
history of Hotel Chocolat (HC). The IPO 
in May 2016 marked the next stage of the 
development and growth of the business 
and provides the capital to accelerate our 
growth strategy whilst raising the profile 
of the business.
RESULTS
The Group achieved a pleasing result in 
FY16 with revenue of £91.1m and growth 
of 12% versus FY15. Strong control of 
costs meant that operating margins 
improved with pre-exceptional EBITDA 
margin rising from 9.7% to 13.5%.
PEOPLE
The Group continues to be led 
by a strong founder-led executive 
management team that have built a 
successful business. In April, we welcomed 
Sophie Tomkins to the Board as a Non-
executive Director. She has already made 
a valuable contribution to the Board 
and brings excellent experience to her 
role as Chair of the Audit Committee. I 
would also like to extend my thanks to 
the whole Hotel Chocolat team for their 
hard work, commitment and for a job 
well done.
DIVIDENDS 
The Group remains in a growth phase and 
is presented with many strong investment 
opportunities, each of which is assessed 
using a disciplined approach to capital 
allocation and risk. The Board intends 
to invest the IPO proceeds to support 
the business strategy, with the goal of 
accelerating the growth of the business 
and a target of improving returns. The 
Board therefore is not recommending a 
dividend for FY16 but is committed to 
adopting a progressive dividend policy in 
future as the business grows. “  Our combination of strong 
brand and vertically 
integrated business model 
is starting to deliver 
strong results.”
 ANDREW GERRIE
  I n de p e n de nt  
Non-executive Chairman
In the year we have cemented the  
foundations for future growth.
HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 10 Originality · Authenticity · Ethics
The T asting Club
Tasting Club members taste our newest recipes every month. They score the 
chocolates and only the best make it into our retail ranges. Club members 
are strong supporters of our Engaged Ethics programme; some have also 
supported our growth by investing in chocolate bonds. 
Company overview Governance Financial statements
Strategic report
11 STRATEGIC REPORT Chairman’s statement What sets us apart?
A strong differentiated brand  
underpinned by vertical integration. 
Strong &  
distinctive brand 
The Hotel Chocolat brand evokes  
escapism and offers a contemporary  
take on luxury chocolate. 
An in-house design team carefully 
curates the look and feel – from 
chocolate casting mould creation to 
packaging, from recipes to marketing 
communications and store fit-outs.
Vertically  
integrated
Being vertically integrated means we 
can apply our expertise at every stage 
of the process to create superior and 
innovative products at improved 
margins, and gives the flexibility to 
trade each season responsively.
Owning the sales channels also allows 
our teams to pass on their knowledge 
and enthusiasm to our guests.
Premium 
differentiated 
product 
Rather than copying continental 
chocolate traditions, Hotel Chocolat 
has carved out a modern British take 
on luxury chocolate.
Many aspects of the product 
range have successfully overturned 
traditional approaches: for example 
our ‘Selector’ wall of chocolates 
replaces the traditional glass 
cabinet of loose chocolates, offering 
wider choice, fresher product and 
faster service.
Omni-channel  
retail distribution 
Investing in digital and physical store 
distribution channels means we know  
more about our customers than would  
be possible by following a traditional  
FMCG distribution route, so we 
can give better service and create 
products and services that our 
customers want.
Product  
innovation 
Innovation is in our DNA, from the  
Tasting Club to chocolate bonds, from  
award winning new chocolate recipes,  
to cocoa gin and the use of cocoa as  
a savoury ingredient.
We ensure that strong innovation  
is balanced by a disciplined range 
architecture, ensuring only the  
edited best of the best feature in our 
product ranges. 
Progressive  
digital marketing
We have our origins in e-commerce.  
Not only has this informed our 
store roll-out, it means that digital 
is always at the centre of our 
customer strategies.
12 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Company overview Governance Financial statements
Strategic report
13 STRATEGIC REPORT What sets us apart? Our business model
We own a cocoa plantation in Saint Lucia called  
the Rabot Estate. This is the source of the exclusive  
beans used in our Rare & Vintage range and of our  
deep understanding of the cocoa growing process. This 
knowledge will enable us to continuously improve our 
relationship with all of our cocoa growers worldwide.
We seek out the best partners to supply 
premium ingredients to ensure that our 
products set us apart from the competition.
– Customer happiness 
– Employee engagement 
– Supply sustainability 
– Shareholder value
Our Engaged Ethics programme 
drives investment in sustainability 
both in the UK and worldwide.
We Deliver
Everything we do is guided  
by the three basic values  
that we started with and  
will always retain:
We believe that growth and re-investment can benefit  
all of Hotel Chocolat’s stakeholders.
14 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Strategic report
All of our products are developed and  
designed in-house and are exclusive to the brand. 
With the goal of being the true sector specialist,  
we have created a broad product range. 
We strive for continual innovation in a disciplined 
range framework.
In 2008 we established a dedicated production 
facility near Cambridge where we now make 
over 95% of our products. 
In-house production increases control over 
quality, allows faster innovation and improves 
gross margins.
Our main Distribution Centre is near 
Cambridge. The majority of our products 
are packaged here and then distributed 
to stores using our own fleet of vehicles. 
Owning the supply chain improves 
responsiveness and enables high levels of 
product availability.
Originality
Authenticity 
Ethics
DIGITAL &  
SUBSCRIPTION
RETAIL
PREMIUM  
WHOLESALE  
PARTNERS
COCOA  
ESTATE 
We reach our customers through an  
omni-channel model. Our focus is on  
great service to ensure 100% happiness.
Company overview
Strategic report
Governance Financial statements
15 STRATEGIC REPORT Our business model Our markets
We operate in four large and growing markets,  
all offering significant headroom. 
Our differentiated product offer is well placed and has the potential to increase market 
share. The Board believes that approximately half of products are purchased as gifts  
and considers that both our competitor set and growth opportunity are wider than  
just traditional chocolate retailing.
£20 BN 
MARKET
1
£6 BN 
MARKET
2
£8 BN 
MARKET
3
>£70 BN 
MARKET
HC HAS 
<0.5 % 
SHARE
HC HAS 
<2.0 % 
SHARE
HC HAS 
<0.1% 
SHARE
HC HAS 
<0.02% 
SHARE
STR ATEGY
• Improve gift products  
for stores and online
• Increase range of 
hampers and gift packs
• Grow customer database
STR ATEGY
• Apply Shop+Cafe model 
to selected new sites
• Test takeaway-only  
Hot Chocolat and ice 
cream in smaller stores
STR ATEGY
• Open more stores  
across the UK
• Digital upgrades improve 
loyalty and acquisition, 
conversion and tablet 
optimised site.
• Extend dietary luxury 
(vegan, gluten free,  
“more cocoa, less sugar”)
STR ATEGY
• Prove store economics  
in Denmark
• Gain international know-
how to be equipped for 
larger markets later 
• New website brings 
international expansion 
opportunity
UK  
gifting
UK  
cafes
UK 
chocolate 
International
1) Mintel, 2007 2) Canadean, 2014 3) Allegra, 2016
16 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Company overview
Strategic report
Governance Financial statements
In consumer research UK 
shoppers named Hotel Chocolat 
as their favourite premium 
chocolate brand, they also cited 
the main reasons for not buying 
as “lack of access” and “lack 
of awareness”. Opening more 
stores and improving digital 
will address this opportunity 
and capitalise on the significant 
market headroom.
17 STRATEGIC REPORT Our markets
Company overview
Strategic report
Governance Financial statements Our strategy
We maintain a disciplined approach to capital investment  
to deliver returns and contain risk.
New website in 2017
Responsive design across all  
devices including tablet/mobile
International website capability  
at marginal cost
Trial a gift-sending app
Our current website launched in 2013 and has 
delivered strong growth, with digital revenue 
up +20% year-on-year in FY16. However there 
are significant opportunities to further enhance 
the ease of navigation and increase the number 
of gift-sending options. The new website will 
launch in 2017 and will also bring the ability to 
add international websites more rapidly and at  
a lower marginal cost.
Upgrade digital platform 
AND IMPROVE GIFTING PROPOSITION
Continue roll-out of Shop-only format
Continue roll-out of Shop+Cafe format
Refit existing sites, resite key  
stores to larger, prime sites and  
add cafe offer
Our property strategy is targeting new sites 
across the UK. Our latest shopfits have 
achieved significant reductions in cost per sq ft. 
We will continue to innovate, adding new 
ranges and services.
Open new stores
INCLUDING SHOP+CAFE FORMAT
Investment in new technology  
to increase factory capacity
Redesign products to reduce 
packaging cost
Improve gross margins
Our production facility at Huntingdon opened 
in 2008 and has evolved continuously to keep 
pace whilst sales have more than doubled. To 
accommodate projected future growth we 
are investing £10m in a three-year programme 
of works that will reduce cost of production 
without any compromise in quality and will 
allow us to further innovate with new products.
Increase capacity & capability
IN PRODUCTION AND SUPPLY CHAIN
18 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Originality · Authenticity · Ethics
Investing in our store  
roll-out
We have profitable store formats from 100 sq ft to 6,000 sq ft. Our new Shop+Cafe  
format adds a premium drinks range to our full retail range, giving customers more 
reasons to visit, and offers a counter-seasonal sales profile. This allows us to increase 
sales and profitability in mature catchments and to open in smaller catchments where  
a Shop-only format might not be viable.
Company overview
Strategic report
Governance Financial statements
19 STRATEGIC REPORT Our strategy
Strategic report Chief Executive’s statement
In my first Chief Executive’s statement I am 
pleased to report a year of significant progress 
for the Group. Revenue grew by 12% to 
£91.1m and profit before tax increased 
by 91% to £5.6m. We further refined our 
business model and all channels achieved 
growth, whilst a focus on cost efficiency 
resulted in an improved EBITDA margin. 
I would like to thank the whole team for 
their enthusiasm and tireless commitment, 
without which these results would not have 
been possible.
SALES CHANNEL REVIEW
Our multi-channel model continues to work 
well: each channel supports the others and 
all channels are in growth. Digital growth of 
+20% was particularly strong. 
Our stores continued to perform well and 
the opening of our fifth Shop+Cafe site in 
Worcester represented an encouraging step 
as we continue to hone this new format. We 
will continue to open both pure chocolate 
shops and Shop+Cafe formats to best match 
the opportunity in each location.
In the year we opened seven new stores in 
Regent Street and Tottenham Court Road 
in London, Birmingham New Street Station, 
Glasgow Braehead, Manchester Market 
Street, Manchester Piccadilly Station and 
Sheffield Fargate.
In the year we also closed three stores that 
had reached the end of their leases and 
weren’t meeting our returns hurdles, thus 
improving the overall profitability of the 
retail estate. Since the end of the financial 
period we have opened three stores in 
Worcester, Peterborough and Chelmsford, 
and have signed leases on a further five 
including our first Designer Outlet store at 
Cheshire Oaks, all of which we expect to be 
trading before Christmas 2016. 
Our international operations remain at 
the exploratory stage and highlights have 
included a refit of our Shop+Cafe site in 
Copenhagen city centre and the opening 
of a new franchised store in Gibraltar, with 
our partner Sandpiper, who already operate 
Hotel Chocolat franchise stores in Jersey 
and Guernsey.
OPERATIONAL REVIEW
A major focus for the period was on 
improving availability to ensure customers 
can always find their favourite Hotel Chocolat 
products which helped increase sales growth 
rates across all channels. The key seasonal 
ranges have also traded strongly.
Our results continue to improve and we  
see significant opportunity for future growth.
“  The brand has continued 
to gain in strength, 
meaning we are well 
positioned for growth in 
all of our markets.”
 ANGUS THIRLWELL
  Co-founder and Chief 
Executive Officer
HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 20 HOTEL CHOCOLAT  Originality · Authenticity · Ethics
Company overview Governance Financial statements
Strategic report
21 STRATEGIC REPORT Chief Executive’s statement
From ‘bean to bar’
For our Rare & Vintage range we carefully source beans from all around the world to 
complement those we grow ourselves. Each type of bean is selected to showcase the  
variety of flavours that fine cocoa can achieve.
We ensure that the growers are accredited as sustainable, and we commit that our team  
will conduct visits to every site.
Our development team then experiments to find the best roasting temperatures and 
conching (grinding) times to bring out the delicate flavour of the different beans. This results 
in a unique range of some of the best cacao on the planet, priced at an accessible luxury level. Chief Executive’s statement continued
Further investments are planned for summer 2017  
to improve capacity and efficiency.
MANUFACTURING 
INVESTMENT
Following the end of Easter and preceding 
the build-up for the winter peak, each 
summer presents our annual ‘window’ to 
undertake infrastructure investment.
In summer 2015 we completed a £1.0m 
investment to relocate the packing of 
our finished products from our factory in 
Huntingdon to our nearby Distribution 
Centre in St Neots. This change increased 
the factory’s capacity by freeing up space, 
allowing more efficient and responsive supply 
of product and reducing the amount of miles 
travelled moving product between our sites. 
In summer 2016 we completed a £3.7m 
investment installing a mezzanine floor in the 
factory and significantly upgrading one of our 
three key production lines. This has resulted 
in an increase in factory capacity of over 20% 
as well as improved efficiency and the ability 
to conjure up more exciting recipes.
We also invested to increase our ‘bean to 
bar’ manufacturing capacity, enabling us to 
produce more of our super-premium Rare & 
Vintage product range.
Further investments are planned for summer 
2017 to improve capacity and efficiency.
 
BRAND REVIEW
As a result of our continued nurturing 
the Hotel Chocolat brand continues to 
strengthen. At the beginning of FY16 
we relaunched our key boxed chocolate 
ranges, improving the packaging and adding 
new recipes to increase choice. Over the 
Christmas gifting season, redesigned boxed 
chocolates proved a particular success. 
We won an impressive 18 awards from the 
Academy of Chocolate including for our 
new Teaolat infusion drinks, our Saint Lucian 
Buffalo Milk 65% Chocolate and our new 
‘Banana Bread’ chocolate. 
We also launched new gift sleeves which 
allow guests to quickly personalise a product 
for a gift recipient, with early signs being very 
encouraging. This is part of our strategy to 
become a leading one-stop destination for 
gifts, both digitally and in-store.
CONSUMER TRENDS
Wellness 
We see an increasing trend that consumers 
want uncompromisingly delicious and 
hedonistic chocolate that’s also made 
with responsible amounts of sugar. Hotel 
Chocolat’s 12-year track record of “more 
cocoa, less sugar” is applied to every grade 
of chocolate, from our whites, through milks 
and darks. We carry a very wide range 
of darks with cocoa percentages ranging 
from 70% all the way up to 100%. Our new 
supermilk genre means we can offer a milky 
and mellow taste, but with less sugar than 
most dark chocolates on the market. Our 
award-winning vegan darks also continue to 
see significant sales growth. 
Experiences 
Experiences are becoming increasingly 
popular as a new luxury and consumers 
are seeking to go beyond the purely 
transactional. We are well positioned to 
take advantage of this trend. Whilst a 
stay at our Boucan Hotel in Saint Lucia 
remains the pinnacle, great experiences 
are available throughout the UK. We offer 
School of Chocolate customer experiences 
nationwide, priced from £20 to £120 and 
we introduced new brunches and afternoon 
teas at our London and Leeds flagships. 
Our amazing Hot Chocolat is now available 
in more locations as we expand our new 
Shop+Cafe format. We intend to continue 
to develop the range of experiences we can 
offer, showcasing the brand specialisation 
from farm to finished product and aspire to 
turn customers into advocates. 
22 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts REVENUE
Physical 66%
Digital 24%
Wholesale 8%
Cocoa estate 2%
Mobile 
Living an increasingly mobile and flexible 
life is a clear trend. Plans are underway to 
make it easier to send an HC gift whilst on 
the move with our new digital capability 
coming on stream in H1 2017. This will 
deliver improved content optimised for 
smartphones and tablets.
OUTLOOK
I am confident that our plan for the coming 
year is robust. Our capital plans are based 
on proven store formats and digital channels, 
and on making greater use of existing 
production methods and technology. Our 
strategy remains on track and our continued 
innovation and focus on customer happiness 
aim to deliver increased sales, combined with 
disciplined capex and a tight control on costs 
with the goal of improving returns.
The market and wider economy may not 
be without challenges, but we still have 
significant addressable market headroom 
and benefit from having distribution and 
manufacturing directly under our control, 
which supports the resilience of our business. 
Ensuring that we maintain the strong 
relationship we enjoy with our customers 
will always be our top priority. 
2%
8%
24%
66%
Company overview
Strategic report
Governance Financial statements
23 STRATEGIC REPORT Chief Executive’s statement Financial review
Strong sales growth coupled with improving margins and  
cost control have resulted in an improvement in profitability.
REVENUE
Revenue grew by 12% from £81.1m to 
£91.1m. An overview of revenue is included 
in the Chief Executive’s statement.
GROSS MARGIN AND 
OPERATING EXPENSE
Gross profit margin improved from 66.6% 
to 66.8%, as a result of a focus on efficiency 
and better buying, partially offset by ongoing 
investment in product quality. 
A focus on cost control meant that operating 
expenses as a percentage of sales reduced 
from 56.9% to 53.3%.
EXCEPTIONAL COSTS
The exceptional costs of £2.6m relate to the 
costs of flotation of the Group in May 2016 
and to the acquisition of Hotel Chocolat 
Estates Limited, Saint Lucia by the Group at 
the time of IPO.
FINANCE EXPENSE
A £5.6m loan was taken out with Lloyds 
bank in July 2015 and was repaid in full from 
operating cash flow prior to the IPO. In 
addition the Group made use of an overdraft 
facility provided by Lloyds bank. This was 
replaced with an £18m 2-year RCF facility in 
April 2016.
“  Investments in proven formats 
and in increasing production 
capacity have supported 
growth. A focus on costs has 
improved operating leverage 
and profit margins.”
 MATT PRITCHARD
  Chief Financial Officer
Period ended 
26 June 2016
£000
Period ended 
28 June 2015
£000
Revenue 91,090 81,068
Gross profit 60,853 53,982
Operating expenses (48,522) (46,148)
Pre-exceptional EBITDA 12,331 7,834
Depreciation & amortisation (3,194) (4,239)
Exceptional costs (2,642) –
Operating profit 6,366 3,463
Finance income 172 188
Finance expense (947) (720)
Profit before tax 5,591 2,931
Tax expense (1,507) (884)
Profit for the period 4,084 2,047
24 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts TAXATION
The effective rate of taxation is 27%. This is 
higher than the standard rate primarily as a 
result of costs relating to the IPO, which are 
not allowable for tax purposes.
EARNINGS PER SHARE (EPS) 
AND DIVIDENDS
The capital reorganisation in conjunction 
with the IPO increased the number of shares 
in issue to 112,837,828 resulting in an FY16 
EPS of 3.9p. 
The business continues to be in a growth 
phase and has recently raised new capital to 
finance investment activity with the goal of 
increasing returns. Therefore the Board does 
not propose a dividend, but intends to adopt 
a progressive dividend policy in future years 
as the business grows.
CASH POSITION
The Group had £6.5m of cash at year 
end and £6.7m of borrowings in the form 
of chocolate bonds where bondholders 
receive boxes of chocolate or gift cards in 
lieu of interest. 
WORKING CAPITAL
Closing inventories increased by £2.1m driven 
by an investment in inventory to improve 
availability for customers which has supported 
sales growth, and by a requirement to build 
additional inventory in advance of a temporary 
factory shutdown to complete capital 
investment in July and August 2016.
CAPITAL EXPENDITURE
Capital expenditure of £8.3m comprised 
investments in new stores and re-sites, IT 
projects and in operational projects including 
upgrades to factory capacity and capability.
ACQUISITION OF HOTEL CHOCOLAT ESTATES LIMITED, 
SAINT LUCIA (HCESL) 
Hotel Chocolat Group Limited acquired HCESL on 24 April 2016. As such the 
audited financial statements are required by the Companies Act to include the 
activities, assets and liabilities of HCESL from the date of acquisition. The admission 
document published prior to the IPO was required to include the results of HCESL 
as if the Company had always been a member of the Group. The proforma numbers 
below are therefore provided for comparative purposes.
Hotel Chocolat Group plc proforma basis
Period ended 
26 June 2016 
£000
Period ended 
28 June 2015
£000
Revenue 92,636 82,614
Pre-exceptional EBITDA 12,270 8,106
PERFORMANCE INDICATORS
The Group monitors its performance 
using a number of key indicators which are 
agreed at Board meetings and monitored at 
operational and Board level.
 
REVENUE GROWTH
+12%
Revenue grew 12%  
year-on-year
GROSS MARGIN
66.8%
Gross margin improved from  
66.6% to 66.8%
PRE-EXCEPTIONAL 
EBITDA MARGIN
13.5%
EBITDA margin before exceptional costs 
improved from 9.7% to 13.5%.
Company overview
Strategic report
Governance Financial statements
25 STRATEGIC REPORT Financial review Risk management
The Board sets out below the principal risks that the Directors consider could impact the business. The Board continually reviews the 
risks facing the Group, the controls in place to mitigate any potential adverse impacts and assurance sought to check that the controls are 
working effectively. The Board recognises that the nature and scope of risks can change and there may be other risks to which the Group is 
exposed so the list is not intended to be exhaustive.
 
Changes to competition and/or consumer preferences may  
reduce demand for the Group’s products.
Increased competition could make it more difficult or more  
costly to acquire new store leases.
A downturn in the macro-economy may reduce consumer  
demand generally. Costs may be increased by changes to  
government policy, including tax changes or other legislation. 
The Group purchases many of its ingredients and capital items  
in currencies other than sterling. A fall in the value of sterling  
would increase the cost of imports.
Revenues from the hotel in Saint Lucia are denominated in US dollars. 
Disruption to supply or production of goods, or to IT systems,  
could limit availability of products and consequently reduce sales.
Negative publicity affecting the brand could reduce consumer  
demand for the Group’s products.
Loss of key personnel could impact the Group’s ability to  
implement strategy and the intended pace of growth.
Inconsistent quality or contamination of the Group’s products  
could reduce demand for the Group’s products.
INCREASED COMPETITION 
AND CHANGES IN  
CONSUMER TASTES
ECONOMIC AND  
POLITICAL FACTORS  
BEYOND THE GROUP’S  
DIRECT CONTROL
FOREIGN EXCHANGE
DISRUPTION TO SUPPLY OR 
PRODUCTION OF GOODS,  
OR TO IT SYSTEMS
NEGATIVE PUBLICITY 
AFFECTING THE BRAND
KEY MANAGEMENT
INCONSISTENT QUALITY OR 
CONTAMINATION OF THE 
GROUP’S PRODUCTS
Potential impact Risk category
26 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts This strategic report and information referred to herein was approved on behalf of the Board on 18 October 2016.
Matt Pritchard
Chief Financial Officer
 
The Brexit vote has increased macro- 
economic uncertainty, however trading  
since period-end has remained in line with  
the Board’s expectations.
Whilst sterling has fallen, the Group extends 
its currency hedges on a quarterly basis and is 
currently hedged for the whole of FY17. 
The business has extended its risk assessments 
to include external as well as internal supply 
chain disruption.
The IPO has enabled the business to launch 
share-based incentives to assist in retaining  
key personnel.
Production facilities achieved ‘A grade’ 
accreditation from the BRC in 2016.
• The business adheres to core values of originality, 
authenticity and ethics which result in a strong brand.
• The Board strives for continuous improvement to  
products and services to increase sales.
• The Board seeks to ensure the brand retains its position  
as affordable luxury in order to appeal to a broad range  
of consumers and at price points that are appropriate.
• Ongoing focus on cost efficiency assists in mitigating  
individual cost increases.
• The Group forecasts its requirement for foreign exchange 
purchases and hedges these purchases 18 months ahead.
• The Group maintains a business continuity plan which is 
updated annually and tested quarterly with the incident 
management team.
• The business adheres to core values of originality,  
authenticity and ethics which result in a strong brand.
• Business plans and initiatives are documented and prepared with 
cross-functional input to reduce reliance on single individuals.
• The Remuneration Committee seeks to ensure rewards are 
commensurate with performance and aid retention.
• The business applies strict quality controls and seeks 
independent validation of these controls by the British  
Retail Consortium (BRC).
Mitigation
Change to 
residual risk 
in FY 2016 Commentary
Company overview
Strategic report
Governance Financial statements
27 STRATEGIC REPORT Risk management Corporate social responsibility
The Group strives to ensure that the 
business’s activities positively benefit  
all stakeholders.
ENGAGED ETHICS – 
uniting cocoa growers  
and lovers of fine chocolate  
and being fair to both.
The experience gained by revitalising our 
cocoa estate in Saint Lucia has shown us 
that there are a number of ways to assist 
in ensuring cocoa growing is sustainable:
1)   Pay a premium for 
cocoa grown to sustainable 
standards of stewardship. 
Hotel Chocolat Group plc is  
working with suppliers and is 
committed to ensuring that 100%  
of its cocoa is certified sustainable 
by 2020.
2)   Help farmers to increase crop 
yields by providing knowledge, 
techniques, tools and materials to 
improve productivity and where 
possible grow ‘fine’ cocoa which can 
fetch a higher price. Hotel Chocolat 
(HC) has partnered with an NGO, 
Green Tropic Group, for 14 years to 
support higher productivity in Ghana. 
HC has committed to more than 
doubling the level of financial support 
in FY17 in order to increase the 
number of farmers that benefit from 
training and resources to improve 
productivity and farm incomes.
3)   Providing support to local 
communities. HC and the Tasting 
Club members have funded the 
construction of a health centre 
in Osuben, Ghana and intend to 
continue to invest in similar projects.
CUSTOMERS
The business is committed to a 
philosophy of “more cocoa, less sugar”, 
designed to ensure that the product 
offers a differentiated cocoa-rich taste, 
and with lower sugar content than many 
premium chocolate products.
Customer confidence in pricing is also 
important. We never go ‘on sale’ before 
the end of a season, so the customers 
know they are paying a fair price for  
their purchase.
EMPLOYEES
The business measures employee 
engagement in every team with a focus 
on ensuring that all team members 
are listened to and any concerns are 
addressed. We believe that an engaged 
team will feel greater job satisfaction 
and deliver a better experience 
for customers.
The Group operates an all-employee 
annual performance bonus and a share-
save scheme which launched in August 
2016. Career progression is supported 
and targets are set to ensure as high 
a proportion of vacancies as possible 
are filled via internal promotions. The 
School of Chocolate diploma is available 
to all employees and provides a detailed 
understanding of all aspects of cocoa 
growing and chocolate making.
ENVIRONMENT
Initiatives are underway to reduce CO
2
 
emissions, including reducing the number 
of vehicle miles travelled and improving 
energy efficiency in factories. A new 
delivery fleet has significantly reduced 
vehicle NO
2
 and reduced vehicle CO
2
 by 
10% year-on-year. Targeting inefficient 
processes also reduces environmental 
wastage; smarter use of packaging in our 
Distribution Centre will reduce cardboard 
consumption in FY17.
COMMUNITIES
We have partnered with Drive Forward 
Foundation, an organisation which 
supports young people leaving care 
by assisting them with the transition 
to the world of work. Drive Forward 
Foundation helps young people select 
the right career and provides support, 
giving them confidence to succeed in the 
workplace. The collaboration will target 
those with the skills and appetite to 
succeed in a retail career.
The Board believes that the company has a duty to many 
groups in society: customers, growers and suppliers, 
employees, shareholders and local communities. 
28 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Originality · Authenticity · Ethics
“more cocoa, less sugar”
We believe cocoa is the most important ingredient in great chocolate so it 
will always be the main ingredient listed first on the back of our packs, even 
for milk and white chocolate. For many of our competitors, sugar will be listed 
as the main ingredient. We believe customers can taste the difference.
Company overview Strategic report
Governance
Financial statements
29 GOVERNANCE Corporate social responsibility Board of Directors
Experienced founder-led team
ANDREW GERRIE (53)
Independent  
Non-executive Chairman
Remuneration Committee Chair 
Audit Committee member
 
Andrew Joined HC as Non-executive 
Chairman in June 2015 and has extensive 
retail experience, having served as CEO of 
Lush Cosmetics from 1994 to 2014. During 
this period Lush grew to over 900 stores 
across 49 countries, with sales in excess 
of £450m.
Andrew holds a B.Com degree 
from Auckland University
ANGUS THIRLWELL (53)
Co-founder and  
Chief Executive Officer 
 
Angus co-founded HC with Peter Harris  
in 1993 and has a particular focus on brand 
strategy, product and channel models, 
marketing and creative.
Angus attended Cranfield School of 
Management and is a committee member  
for The Academy of Chocolate.
PETER HARRIS (61)
Co-founder and  
Development Director
 
 
Peter Harris co-founded HC with Angus 
Thirlwell in 1993 and is responsible for  
real estate, legal and intellectual property.
Peter qualified as a Chartered Accountant 
in 1979.
FAVOURITE PRODUCT:
Fruit & Nut Frenzy  
Giant Slab to share
FAVOURITE PRODUCT:
Chocolate-covered almonds 
FAVOURITE PRODUCT:
Breakfast at our restaurant: 
avocado on toast with cocoa  
nibs – and a 100% Hot Chocolat
30 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts MATT PRITCHARD (42)
Chief Financial Officer 
 
 
Matt joined HC as Chief Financial Officer 
in 2014 and is responsible for the finance 
function and retail operations. 
He has over 20 years of experience 
of finance gained in blue chip retail 
organisations.
Matt qualified as a Certified Accountant  
in 1998.
MATT MARGERESON (45)
Chief Operating Officer 
 
 
Matt joined HC in 2006 and is responsible 
for product development, manufacturing, 
supply chain, HR and IT.
Matt has 23 years’ experience in operations 
and supply chain management. 
Matt completed an MBA in 2013 and is 
a member of the Chartered Institute of 
Logistics and Transport.
SOPHIE TOMKINS (47)
Independent  
Non-executive Director
Audit Committee Chair 
Remuneration Committee member
 
Sophie has considerable public markets 
experience gained through a 17-year career 
in the City with several investment banks. 
Sophie is currently Non-executive Director 
and Chair of the Audit Committee at 
CloudCall Group plc.
Sophie qualified as a Chartered Accountant 
in 1994 and is a fellow of the Chartered 
Institute for Securities and Investment.
FAVOURITE PRODUCT:
Saint Lucia 70% “La Pepineire”  
Grown on a single grove  
within the Rabot Estate
FAVOURITE PRODUCT:
Pistachio Praline with a  
cocoa infusion
FAVOURITE PRODUCT:
Peanut Butter Selector
31
Company overview Strategic report
Governance
Financial statements
GOVERNANCE Board of Directors AN INTRODUCTION  
FROM OUR CHAIRMAN
In this section of our report we have set out our approach to 
governance and provided further information on how the Board 
and its committees operate. This is our first annual report as an 
AIM-listed entity.
As an AIM-listed entity, the Group is not subject to and does not 
comply with the requirements of the UK Corporate Governance 
Code. However, the Directors recognise the value and importance 
of good corporate governance and are fully accountable to the 
Group’s stakeholders including shareholders, customers, suppliers 
and employees. 
We are also mindful of the recommendations of the QCA 
Corporate Governance Code for Small and Mid-Size Quoted 
Companies (“QCA guidelines”). The corporate governance 
framework which the Group operates, including Board leadership 
and effectiveness, Board remuneration, and internal control, is set 
out below.
THE COMPOSITION OF THE BOARD 
The Board is responsible to the shareholders and sets the Group’s 
strategy for achieving long-term success. It is also ultimately 
responsible for the management, governance, controls, risk 
management, direction and performance of the Group. From 
flotation the Board comprised two Non-executive Directors and 
four Executive Directors. The two Non-executive Directors are 
fully independent.
HOW THE BOARD OPERATES 
The Board is responsible for the Group’s strategy and for its overall 
management. The operation of the Board is documented in a formal 
schedule of matters reserved for its approval, which is reviewed 
annually. These include matters relating to: 
• The Group’s strategic aims and objectives 
• The structure and capital of the Group 
• Financial reporting, financial controls and dividend policy 
• Setting budgets and forecasts
• Internal control, risk and the Group’s risk appetite 
• The approval of significant contracts and expenditure 
• Effective communication with shareholders 
• Any changes to Board membership or structure 
BOARD MEETINGS 
Non-executive Directors communicate directly with Executive 
Directors and senior management between formal Board 
meetings. The Board as now constituted first met collectively in 
April 2016 and in total met five times in the period. In addition the 
Board held a strategy day on 1 August 2016 specifically focused on 
digital growth.
Directors are expected to attend all meetings of the Board, and of 
the Committees on which they sit, and to devote sufficient time to 
the Group’s affairs to enable them to fulfil their duties as Directors. 
In the event that Directors are unable to attend a meeting, their 
comments on papers to be considered at the meeting will be 
discussed in advance with the Chairman so that their contribution 
can be included in the wider Board discussion. The following table 
shows Directors’ attendance at scheduled Board and Committee 
meetings during the year: 
Board Remuneration Audit
Andrew Gerrie 5/5 1/1 1/1
Sophie Tomkins 5/5 1/1 1/1
Angus Thirlwell 4/5 – –
Peter Harris 5/5 – –
Matt Pritchard 5/5 – (Guest 1/1)
Matt Margereson 5/5 – –
BOARD DECISIONS AND ACTIVITY  
DURING THE PERIOD 
The Board has a schedule of regular business, financial and 
operational matters, and each Board Committee has compiled 
a schedule of work to ensure that all areas for which the Board 
has responsibility are addressed and reviewed during the course 
of the year. The Chairman, aided by the Company Secretary, is 
responsible for ensuring that the Directors receive accurate and 
timely information. The Company Secretary compiles the Board 
and Committee papers which are circulated to Directors prior to 
meetings. The Company Secretary also ensures that any feedback 
or suggestions for improvement on Board papers is fed back to 
management. The Company Secretary provides minutes of each 
meeting and every Director is aware of the right to have any 
concerns minuted.
Corporate governance statement 
32 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts BOARD COMMITTEES 
The Board has delegated specific responsibilities to the Audit and 
Remuneration Committees, details of which are set out below. 
Each Committee has written terms of reference setting out its duties, 
authority and reporting responsibilities. Copies of all the Committee 
terms of reference are available on the Group’s website. It is intended 
that these terms of reference will be kept under continuous review to 
ensure they remain appropriate and reflect any changes in legislation, 
regulation or best practice. Each Committee comprises Non-
executive Directors of the Group. 
Audit Committee 
The Audit Committee is chaired by Sophie Tomkins and its other 
member is Andrew Gerrie; both are fully independent. The Audit 
Committee has primary responsibility for monitoring the quality 
of internal controls and ensuring that the financial performance of 
the Group is properly measured and reported on. It receives and 
reviews reports from the Group’s management and auditor relating 
to the annual accounts and the accounting and internal control 
systems in use throughout the Group. It also advises the Board on 
the appointment of the auditor, reviews their fees and discusses the 
nature, scope and results of the audit with the auditor. The Audit 
Committee meets at least twice a year and has unrestricted access 
to the Group’s auditor. The Chief Financial Officer attends the 
Committee meetings by invitation. 
Remuneration Committee 
The Remuneration Committee is chaired by Andrew Gerrie. Its 
other member is Sophie Tomkins. The Remuneration Committee 
reviews the performance of the Executive Directors and makes 
recommendations to the Board on matters relating to their 
remuneration and terms of employment. The Remuneration 
Committee also makes recommendations to the Board on 
proposals for the granting of share options and other equity 
incentives pursuant to any share option scheme or equity incentive 
scheme in operation from time to time. The remuneration and 
terms and conditions of appointment of the Non-executive 
Directors of the Group are set by the Board. The Chief Executive 
Officer and Chief Financial Officer are invited to attend for some 
parts of the Committee meetings where their input is required 
although they do not take part in any discussion on their own 
benefits and remuneration. 
The Remuneration report on pages 36 to 37 contains more 
detailed information on the Committee’s role and the Directors’ 
remuneration and fees. 
Nominations Committee
The Board is newly formed and is considered by its members to 
be appropriately sized for the needs of the business. As such it is 
the view of the Board that a separate Nominations Committee is 
not required at present. In the event that the needs of the business 
change, a Nominations Committee will be formed. It has been 
agreed that the main Board will undertake the activities of Board 
appointments, re-election and succession, with a view to ensuring 
that the Board is composed of individuals with the necessary skills 
and to promote a culture that fosters diversity. 
BOARD EFFECTIVENESS 
The skills and experience of the Board are set out in their 
biographical details on pages 30 to 31. The experience and 
knowledge of each of the Directors gives them the ability to 
constructively challenge strategy and to scrutinise performance. 
All the Directors have been members of the Board since the 
Group’s listing on AIM in May 2016 and took part in a thorough 
induction process prior to joining the Board. It is intended that, in 
the future, on joining the Board, new Directors will undergo a formal 
programme which will be tailored to the existing knowledge and 
experience of the Director concerned. 
TIME COMMITMENTS
All Directors have been advised of the time required to fulfil the 
role prior to appointment and were asked to confirm that they can 
make the required commitment before they were appointed. This 
requirement is also included in their letters of appointment. The 
Board is satisfied that the Chairman and Non-executive Directors  
are able to devote sufficient time to the Group’s business.  
There has been no significant change in the Chairman’s other  
time commitments since his appointment. 
DEVELOPMENT
The Company Secretary ensures that all Directors are kept abreast 
of changes in relevant legislation and regulations, with the assistance 
of the Group’s advisers where appropriate. Executive Directors are 
subject to the Group’s performance review process through which 
their performance against predetermined objectives is reviewed and 
their personal and professional development needs considered. It 
is intended that an annual performance appraisal of Non-executive 
Directors will be undertaken by the Chairman as part of the Board 
evaluation process, at which time any training or development needs 
will be addressed. 
Company overview Strategic report
Governance
Financial statements
33
Company overview Strategic report
Governance
Financial statements
GOVERNANCE Corporate governance statement EXTERNAL APPOINTMENTS
As appropriate, the Board may authorise Executive Directors to 
take Non-executive positions in other companies and organisations, 
provided the time commitment does not conflict with the Director’s 
duties to the Group, since such appointments should broaden their 
experience. The acceptance of appointment to such positions is 
subject to the approval of the Chairman. 
CONFLICTS OF INTEREST
At each meeting the Board considers Directors’ conflicts of  
interest. The Group’s Articles of Association provide for the  
Board to authorise any actual or potential conflicts of interest. 
DIRECTORS’ AND OFFICERS’  
LIABILITY INSURANCE 
The Group has purchased Directors’ and Officers’ liability  
insurance during the period as allowed by the Group’s articles. 
ELECTION OF DIRECTORS
All continuing Directors of the Group will offer themselves for 
election or re-election at the Annual General Meeting (see  
note below). 
INTERNAL CONTROLS 
The Board has ultimate responsibility for the Group’s system of 
internal control and for reviewing its effectiveness. However, any 
such system of internal control can provide only reasonable, but not 
absolute, assurance against material misstatement or loss. The Board 
considers that the internal controls in place are appropriate for the 
size, complexity and risk profile of the Group. The principal elements 
of the Group’s internal control system include: 
• close management of the day-to-day activities of the Group by  
the Executive Directors;
• an organisational structure with defined levels of responsibility, 
which promotes entrepreneurial decision making and rapid 
implementation whilst mitigating risks; 
• a comprehensive annual budgeting process producing a detailed 
integrated profit and loss, balance sheet and cash flow, which is 
approved by the Board;
• detailed monthly reporting of performance against budget; and 
• central control over key areas such as capital expenditure 
authorisation and banking facilities. 
The Group continues to review its system of internal control to 
ensure adherence to best practice, whilst also having regard to its size 
and the resources available. The Board considers that the introduction 
of an internal audit function is not appropriate at this juncture. 
RELATIONS WITH SHAREHOLDERS 
The Group maintains communication with institutional shareholders 
through individual meetings with Executive Directors, particularly 
following publication of the Group’s interim and full period results. 
Private shareholders are encouraged to attend the Annual General 
Meeting at which the Group’s activities are considered and questions 
answered. General information about the Group is also available on 
the Group’s website (www.hotelchocolat.com). The Non-executive 
Directors are available to discuss any matter stakeholders might 
wish to raise, and the Chairman and independent Non-executive 
Directors will attend meetings with investors and analysts as 
required. Investor relations activity and a review of the share  
register are standing items on the Board’s agenda. 
ANNUAL GENERAL MEETING (AGM) 
The Annual General Meeting of the Group will take place on  
1 December 2016. The Notice of Annual General Meeting and 
the ordinary and special resolutions to be put to the meeting are 
included at the end of this Annual Report and financial statements.
 
Corporate governance statement continued
34 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts On behalf of the Board, I am pleased to present the Audit 
Committee report for the period ended 26 June 2016. The Audit 
Committee is responsible for ensuring that the financial performance 
of the Group is properly reported and reviewed. Its role includes 
monitoring the integrity of the financial statements (including annual 
and interim accounts and results announcements), reviewing internal 
control and risk management systems, reviewing any changes to 
accounting policies, reviewing and monitoring the extent of the non-
audit services undertaken by external auditors and advising on the 
appointment of external auditors. 
MEMBERS OF THE AUDIT COMMITTEE 
The Committee consists of two independent Non-executive 
Directors: me (as Chair) and Andrew Gerrie. Matt Pritchard 
may attend Committee meetings by invitation. The Committee 
met once in the period. The Board is satisfied that I, as Chair of 
the Committee, have recent and relevant financial experience. 
I am a Chartered Accountant and I am currently Chair of the 
Audit Committee at CloudCall Group plc. A representative  
from Chadwick Corporate Consulting acts as Secretary to the 
Committee. I report the Committee’s deliberations at the next 
Board meeting and the minutes of each meeting are made available 
to all members of the Board. 
DUTIES 
The main duties of the Audit Committee are set out in its  
terms of reference, which are available on the Group’s website  
(www.hotelchocolat.com). The main items of business considered  
by the Audit Committee during the year included: 
• review of the FY16 audit plan and audit engagement letter; 
• review of suitability of the external auditor; 
• review of the financial statements and Annual Report; 
• consideration of the external audit report and management 
representation letter; 
• going concern review; 
• review of the risk management and internal control systems; and 
• meeting with the external auditor without management present. 
ROLE OF THE EXTERNAL AUDITOR 
The Audit Committee monitors the relationship with the external 
auditor, BDO LLP, to ensure that auditor independence and objectivity 
are maintained. Noting the tenure of BDO LLP (since FY12), the 
Committee will keep under review the need for external tender. As 
part of its review the Committee monitors the provision of non-audit 
services by the external auditor. The breakdown of fees between audit 
and non-audit services is provided in Note 6 of the Group’s financial 
statements. The non-audit fees relate to tax advice for the Group and 
transaction services in support of the flotation. The Audit Committee 
also assesses the auditor’s performance. Having reviewed the auditor’s 
independence and performance, the Audit Committee recommends 
that BDO LLP be reappointed as the Group’s auditor at the next AGM.  
AUDIT PROCESS 
The auditor prepares an audit plan for the review of the full period 
financial statements. The audit plan sets out the scope of the audit, 
areas to be targeted and audit timetable. This plan is reviewed and 
agreed in advance by the Audit Committee. Following the audit, the 
auditor presented its findings to the Audit Committee for discussion. 
No major areas of concern were highlighted by the auditor during 
the period, however areas of significant risk and other matters of 
audit relevance are regularly communicated. 
INTERNAL AUDIT 
At present the Group does not have an internal audit function 
and the Committee believes that management is able to derive 
assurance as to the adequacy and effectiveness of internal controls 
and risk management procedures without one. 
RISK MANAGEMENT AND INTERNAL CONTROLS 
As described on page 34 of the corporate governance report, the 
Group has established a framework of risk management and internal 
control systems, policies and procedures. The Audit Committee 
is responsible for reviewing the risk management and internal 
control framework and ensuring that it operates effectively. During 
the period, the Committee has reviewed the framework and the 
Committee is satisfied that the internal control systems in place are 
currently operating effectively. 
WHISTLEBLOWING 
The Group has in place a whistleblowing policy which sets out 
the formal process by which an employee of the Group may, in 
confidence, raise concerns about possible improprieties in financial 
reporting or other matters. Whistleblowing is a standing item on 
the Committee’s agenda and updates are provided at each meeting. 
During the period, there were no incidents for consideration.
ANTI-BRIBERY 
The Group has in place an anti-bribery and anti-corruption policy 
which sets out its zero-tolerance position and provides information 
and guidance to those working for the Group on how to recognise 
and deal with bribery and corruption issues. During the period, 
there were no incidents for consideration.
Sophie Tomkins
Chair of the Audit Committee
Audit Committee report
35
Company overview Strategic report
Governance
Financial statements
GOVERNANCE Audit Committee report I am pleased to present this remuneration report, which sets out the remuneration policy and the remuneration paid to the Directors 
for the period. Hotel Chocolat Group plc is listed on the Alternative Investment Market (AIM) and, as such, the following disclosures are 
prepared on a voluntary basis for the Group. 
COMPOSITION AND ROLE 
The Remuneration Committee’s members are Andrew Gerrie, who is the Chairman of the Committee, and Sophie Tomkins. The 
Committee operates under the Group’s agreed terms of reference and is responsible for reviewing all senior executive appointments 
and determining the Group’s policy in respect of the terms of employment, including remuneration packages of Executive Directors. The 
Remuneration Committee met once during the period and plans to meet at least twice a year going forward. 
REMUNERATION POLICY 
The objective of the Group’s remuneration policy is to attract, motivate and retain high quality individuals who will contribute fully to the 
success of the Group. To achieve this objective, the Group provides competitive salaries and benefits to all employees. Executive Directors’ 
remuneration is set to create an appropriate balance between both fixed and performance-related elements. Remuneration is reviewed 
each year in light of the Group’s business objectives. It is the Remuneration Committee’s intention that remuneration should reward 
achievement of objectives and that these are aligned with shareholders’ interests over the medium term. Remuneration consists of the 
following elements: 
• Basic salary; 
• Performance-related annual bonus; 
• Long-Term Incentive Plan; and 
• Pension contribution.
EXECUTIVE DIRECTORS’ SERVICE CONTRACTS 
The Executive Directors signed new service contracts with the Group on admission to AIM. These are not of fixed duration. Angus 
Thirlwell and Peter Harris’ contracts are terminable by either party giving twelve months’ written notice. Matt Pritchard and Matt 
Margereson’s contracts are terminable by either party giving six months’ written notice. 
NON-EXECUTIVE DIRECTORS 
The Non-executive Directors signed letters of appointment with the Group on admission to AIM for the provision of Non-executive 
Directors’ services, which may be terminated by either party giving three months’ written notice. The Non-executive Directors’ fees are 
determined by the Board. 
DIRECTORS’ REMUNERATION 
The following table summarises the total gross remuneration of the Directors who served during the period to 26 June 2016. 
2016 2015
Basic  
salary/fee Bonus Pension Total
Basic  
salary/fee Bonus Pension Total
Executive
Angus Thirlwell 235,840 47,200 5,358 288,398 236,000 47,200 5,360 288,560
Peter Harris 232,634 47,200 3,000 282,834 236,000 47,200 3,000 286,200
Matt Pritchard 202,404 40,250 2,024 244,678 182,500 38,100 1,825 222,425
Matt Margereson 202,404 40,250 – 242,654 185,417 37,083 – 222,500
Non-executive
Andrew Gerrie 7,820 – – 7,820 – – – –
Sophie Tomkins 6,641 – 29 6,670 – – – –
Remuneration report
36 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts The remuneration policy for 2017 will operate as follows:  
Basic salary/fee Maximum bonus Pension
Executive
Angus Thirlwell £235,000 40% £5,350
Peter Harris £215,000 40% £3,000
Matt Pritchard £215,000 40% £2,150
Matt Margereson £215,000 40% –
Non-executive
Andrew Gerrie £50,000 – –
Sophie Tomkins £35,000 – –
Maximum bonus opportunities for the 2017 financial year are disclosed in the table above. The 2017 bonus will be assessed against Group 
profit and against personal performance objectives. 
The profit element of the bonus will adjust from zero at a threshold profit level, up to 40% for a stretch profit growth. Personal performance 
against pre-determined objectives will be appraised by the Remuneration Committee. If a Director does not achieve one or more of their 
personal objectives their profit-related bonus payment will reduce on a pre-determined sliding scale.
Challenging performance targets have been set. The actual performance targets are not disclosed as they are considered to be 
commercially sensitive. 
LONG-TERM INCENTIVE PLAN 
Annual awards to Executive Directors under this plan are underpinned by financial performance measures. Angus Thirlwell and Peter Harris 
are not part of the Long-Term Incentive Plan.
Matt Pritchard and Matt Margereson have been granted options under the Group’s Long-Term Incentive Plan. The proportion of the total 
option shares vesting is subject to testing against a performance condition, being the audited net profit after tax for the financial period  
ended 30 June 2019. The performance thresholds are not disclosed as they are considered to be commercially sensitive. 
Date of grant
Number of ordinary 
shares under option Exercise price Exercise period
Matt Pritchard 04.05.16 800,000 148p 04.05.19–03.05.26
Matt Margereson 04.05.16 800,000 148p 04.05.19–03.05.26
If you have any comments or questions on anything contained within this remuneration report, I will be available at the AGM. 
Andrew Gerrie
Chair of the Remuneration Committee
37
Company overview Strategic report
Governance
Financial statements
GOVERNANCE Remuneration report The Directors present their report together with the audited financial statements for the period ended 26 June 2016. 
The corporate governance statement on pages 32 to 34 also forms part of this Directors’ report. 
REVIEW OF BUSINESS 
The Chairman’s statement on page 10 and the strategic report on pages 10 to 27 provide a review of the business, the Group’s trading for the 
period ended 26 June 2016, key performance indicators and an indication of future developments.
RESULT AND DIVIDEND 
The Group has reported its Consolidated Financial Statements in accordance with International Financial Reporting Standards as adopted by 
the European Union. 
The Group’s results for the period are set out in the Consolidated Statement of Comprehensive Income on page 42. The Group has applied 
FRS 101: Reduced Disclosure Framework to the Company accounts for the period ended 26 June 2016. 
Hotel Chocolat Group plc acquired Hotel Chocolat Estates Limited, Saint Lucia (HCESL) on 24 April 2016. As such the audited financial 
statements are required by the Companies Act to include the activities, assets and liabilities of HCESL from the date of acquisition. 
The Group’s IFRS profit after tax for FY16 was £4.1m (FY15: £2.0m). The Group’s FY16 revenue of £91.1m (FY15: £81.1m), gross margin 
of 66.8% (FY15: 66.6%) and FY16 adjusted EBITDA of £12.3m (FY15: £7.8m) represent a successful period for the business. The Group 
continued to strengthen its position.
Period ended 
Proforma basis IFRS (acquisition basis)
26 June 2016
£000
28 June 2015
£000
26 June 2016
£000
28 June 2015
£000
Revenue 92,636 82,614 91,090 81,068
Gross margin % 67.0% 65.9% 66.8% 66.6%
Adjusted EBITDA 12,270 8,106 12,331 7,834
Profit after tax 3,561 1,887 4,084 2,047
The Board is not recommending a dividend.
DIRECTORS
The Directors of the Group during the period were: 
Executive 
Angus Thirlwell 
Peter Harris 
Matt Pritchard 
Matt Margereson
Non-executive 
Andrew Gerrie 
Sophie Tomkins
The names of the Directors, along with their brief biographical details are given on pages 30 to 31.
DIRECTORS’ INTERESTS 
The Directors’ interests in the Group’s shares and options over ordinary shares are shown in the remuneration report on page 37. 
No Director has any beneficial interest in the share capital of any subsidiary or associate undertaking. 
The Group also purchased and maintained throughout the financial period Directors’ and Officers’ liability insurance in respect of itself and 
its Directors. 
Directors’ report
38 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts POLITICAL DONATIONS 
The Group made no political donations in the financial period. 
DISCLOSURE OF INFORMATION TO AUDITOR
As far as the Directors are aware, there is no relevant audit information (that is, information needed by the Group’s auditor in connection 
with preparing their report) of which the Group’s auditors are unaware, and each Director has taken all reasonable steps that he or she 
ought to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the 
Group’s auditors are aware of that information. 
FINANCIAL INSTRUMENTS 
The financial risk management objectives of the Group, including credit risk, interest rate risk and foreign exchange risk, are provided in 
Note 31 to the Consolidated Financial Statements on pages 72 to 74. 
SHARE CAPITAL STRUCTURE 
At 26 June 2016, the Group’s issued share capital was £112,838 divided into 112,837,828 ordinary shares of 0.1p each. The holders of 
ordinary shares are entitled to one vote per share at the meetings of the Group. 
SHARE OPTION SCHEMES 
Details of employee share schemes are set out in Note 9 to the Consolidated Financial Statements. 
PURCHASE OF OWN SHARES 
Details of shares purchased by the Group are set out in Note 24 to the Consolidated Financial Statements. 
GOING CONCERN
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational 
existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.  
POST BALANCE SHEET EVENTS
The Board considers that no material post balance sheet events occurred between the end of the period and the date of publication of this report.
FUTURE DEVELOPMENTS
The Board intends to continue to pursue the business strategy as outlined in the strategic report on pages 10 to 27.
EMPLOYEE INVOLVEMENT POLICIES
The Directors believe that the involvement of employees is an important part of the business culture and contributes to the successes 
achieved to date (view our corporate social responsibility statement on page 28).
AUDITOR 
BDO LLP has expressed its willingness to continue in office as auditor and a resolution to reappoint them will be proposed at the 
forthcoming Annual General Meeting.
ANNUAL GENERAL MEETING 
The Annual General Meeting will be held on 1 December 2016. The ordinary business comprises receipt of the Directors’ report and 
audited financial statements for the period ended 26 June 2016, the re-election of Directors, the reappointment of BDO LLP as auditor 
and authorisation of the Directors to determine the auditor’s remuneration. The Notice of Annual General Meeting and the ordinary and 
special resolutions to be put to the meeting are included at the end of this Annual Report and financial statements. 
APPROVAL 
This Directors’ report was approved on behalf of the Board on 18 October 2016. 
Matt Pritchard
Chief Financial Officer
Company overview Strategic report
Governance
Financial statements
39
Company overview Strategic report
Governance
Financial statements
GOVERNANCE Directors’ report The Directors are responsible for preparing the strategic report, 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 period. Under that law 
the Directors have elected to prepare the Group’s Consolidated Financial Statements in accordance with International Financial Reporting 
Standards (“IFRS”) as adopted by the European Union, and the Company Financial Statements in accordance with FRS 101: Reduced 
Disclosure Framework. 
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of 
the state of affairs of the Group and Company and of the profit or loss of the Group 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; and 
• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business. 
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and 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 Group’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 Group’s 
website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements 
contained therein.
Statement of Directors’ responsibilities 
40 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts We have audited the financial statements of Hotel Chocolat Group plc for the period ended 26 June 2016 which comprise the Consolidated 
Statement of Comprehensive Income, the Consolidated Statement of Financial Position and Company Statement of Financial Position, 
the Consolidated Statement of Cash Flow and Company Statement of Cash Flow, the Consolidated Statement of Changes in Equity 
and Company Statement of Changes in Equity and the related notes. The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial 
reporting framework that has been applied in preparation of the Parent Company financial statements is applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 
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 
auditor’s 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 Financial Reporting Council’s (FRC’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 FRC’s website at www.frc.org.uk/auditscopeukprivate.
OPINION ON FINANCIAL STATEMENTS
In our opinion: 
•  the financial statements give a true and fair view of the state of the Group’s and the Parent Company’s affairs as at 26 June 2016 and of 
the Group’s profit for the period then ended;
•  the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
•  the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted 
Accounting Practice; 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 strategic report and Directors’ report 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 Parent Company, or returns adequate for our audit have not been received from 
branches not visited by us; or
• the Parent Company 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.
Mark RA Edwards (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
18 October 2016
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent auditor’s report
T o the members of Hotel Chocolat Group plc
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Independent auditor¹s report Notes
52 weeks ended  
26 June 2016
£
52 weeks ended  
28 June 2015
£
Revenue 4 91,089,824 81,068,364
Cost of sales (30,237,009) (27,086,522)
60,852,815 53,981,842
Administrative expenses 5 (54,486,943) (50,519,091)
6,365,872 3,462,751
Finance income 10 172,106 188,489
Finance expenses 10 (946,884) (719,808)
Profit before tax for the period 5,591,094 2,931,432
Tax expense 11 (1,507,290) (884,209)
Profit for the period 4,083,804 2,047,223
Other comprehensive income: 
Derivative financial liabilities 21 (581,959) –
Deferred tax charge on derivative financial liabilities 11 114,446 –
Currency translation differences arising from consolidation 896,053 (380,039)
Total comprehensive income for the period 4,512,344 1,667,184
Earnings per share – Basic and Diluted 12 3.9p 20.1p
Consolidated Statement of Comprehensive Income
For the period ended 26 June 2016
42 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Notes
As at  
26 June 2016
£
As at  
28 June 2015
£
As at 
29 June 2014
£
ASSETS
Non-current assets
Intangible assets 13 1,856,800 1,553,433 1,512,191
Property, plant and equipment 14 26,111,111 12,294,264 14,030,984
Prepayments 17 7,461 – –
Deferred tax asset 15 149,903 215,993 240,019
28,125,275 14,063,690 15,783,194
Current assets
Inventories 16 6,604,104 4,493,841 3,926,952
Trade and other receivables 17 5,534,835 13,672,466 15,131,549
Corporation tax recoverable – 166,709 952,873
Cash and cash equivalents 19 6,475,446 4,939,924 4,796,735
18,614,385 23,272,940 24,808,109
Total assets 46,739,660 37,336,630 40,591,303
LIABILITIES
Current liabilities
Trade and other payables 20 16,334,191 12,210,082 14,006,130
Corporation tax payable 611,051 – –
Derivative financial liabilities 21 554,529 – –
Bank overdraft 19 – 10,637,314 13,931,197
Borrowings 22 432,544 954,521 723,613
17,932,315 23,801,917 28,660,940
Non-current liabilities
Other payables and accruals 20 1,485,090 1,774,731 1,143,491
Derivative financial liabilities 21 85,075 – –
Borrowings 22 6,643,212 7,298,718 7,723,393
Provisions 23 464,486 668,898 939,715
8,677,863 9,742,347 9,806,599
Total liabilities 26,610,178 33,544,264 38,467,539
NET ASSETS 20,129,482 3,792,366 2,123,764
EQUITY 
Share capital 24 112,838 103,418 107,078
Share premium 25 11,749,487 – –
Retained earnings 8,087,350 4,003,546 1,956,323
Translation reserve 25 353,126 (542,927) (162,888)
Merger reserve 25 223,251 223,251 223,251
Capital redemption reserve 25 6,301 5,078 –
Other reserves 25 (402,871) – –
Total equity attributable to shareholders 20,129,482 3,792,366 2,123,764
The financial statements of Hotel Chocolat Group plc, registered number 08612206 were approved by the Board of Directors and 
authorised for issue on 18 October 2016. They were signed on its behalf by:
Matt Pritchard
Chief Financial Officer
18 October 2016
Consolidated Statement of Financial Position
As at 26 June 2016
43
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Consolidated Statement of Financial Position Notes
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Profit before tax for the period 5,591,094 2,931,432
Adjusted by:
Depreciation of property, plant and equipment 14 2,516,632 4,044,602
Impairment of property, plant and equipment 14 – 131,998
Amortisation of intangible assets 13 676,977 194,542
Net interest expense 10 774,778 531,319
Share-based payments 9 64,642 –
Loss on disposal of property, plant and equipment and intangible assets 5 128,874 –
Operating cash flows before movements in working capital 9,752,997 7,833,893
Increase in inventories (2,294,585) (566,890)
(Increase)/decrease in trade and other receivables (309,174) 1,252,819
Increase/(decrease) in trade and other payables and provisions 1,516,121 (1,001,379)
Cash inflow generated from operations 8,665,359 7,518,443
Interest received 109 –
Income tax paid (548,994) (74,019)
Interest paid on:
– finance leases and hire purchase loans (30,020) (31,654)
– bank loans and overdraft (660,663) (593,801)
Cash flows from operating activities 7,425,791 6,818,969
Purchase of property, plant and equipment (5,625,076) (2,889,611)
Proceeds from disposal of property, plant and equipment 200,000 –
Purchase of intangible assets (760,224) (235,784)
Acquisition of subsidiary 29 228,006 –
Cash flows used in investing activities (5,957,294) (3,125,395)
(Buy back)/issue of Chocolate bonds (145,000) 406,500
Capital element of hire purchase and finance leases repaid (378,462) (439,850)
Repayment of bank loans (654,021) (160,416)
Cost of issue of new equity (240,000) –
Issue/(buy-back) of shares 12,000,130 (3,660)
Cash flows from/(used in) financing activities 10,582,647 (197,426)
Net change in cash and cash equivalents 12,051,144 3,496,148
Cash and cash equivalents at beginning of period 19 (5,697,390) (9,134,462)
Foreign currency movements 121,692 (59,076)
Cash and cash equivalents at end of period 19 6,475,446 (5,697,390)
Consolidated Statement of Cash Flow
For the period ended 26 June 2016
44 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Share 
capital 
£
Share 
Premium
 £
Retained 
earnings 
£
Translation 
reserve 
£
Merger 
reserve 
£
Capital 
redemption 
reserve 
£
Other 
reserves 
£
Total 
£
As at 30 June 2014 107,078 – 1,956,323 (162,888) 223,251 – – 2,123,764
Profit for the period – – 2,047,223 – – – – 2,047,223
Capital redemption (5,078) – – – – 5,078 – –
Shares issued in the period 1,418 – – – – – – 1,418
Other comprehensive  
expense for the period – – – (380,039) – – – (380,039)
Equity as at 28 June 2015 103,418 – 4,003,546 (542,927) 223,251 5,078 – 3,792,366
Profit for the period – – 4,083,804 – – – – 4,083,804
Capital redemption (1,223) – – – – 1,223 – –
Shares issued in the period 10,643 11,989,487 – – – – – 12,000,130
Costs of issue of equity shares – (240,000) – – – – – (240,000)
Share-based payments – – – – – – 64,642 64,642
Derivative financial liabilities – – – – – – (581,959) (581,959)
Deferred tax charge on 
derivative financial liabilities – – – – – – 114,446 114,446
Other comprehensive  
income for the period – – – 896,053 – – – 896,053
Equity as at 26 June 2016 112,838 11,749,487 8,087,350 353,126 223,251 6,301 (402,871) 20,129,482
 
Consolidated Statement of Changes in Equity
For the period ended 26 June 2016
45
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Consolidated Statement of Changes in Equity Notes to the financial statements
For the period ended 26 June 2016
1. GENERAL INFORMATION
Hotel Chocolat Group plc (the Company, and together with its subsidiaries, the Group) is a company incorporated in the United Kingdom 
under the Companies Act. The registered office of the Company is Mint House, Newark Close, Royston, Hertfordshire, SG8 5HL, United 
Kingdom. The registered company number is 08612206. A list of all of the Company’s subsidiaries is presented in Note 18.
The Group’s principal activities are that of the manufacture and retail of chocolate in the United Kingdom and overseas. 
2. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of the consolidated financial information are set out below. These policies have 
been consistently applied to all periods presented, unless otherwise stated. 
Basis of preparation
The consolidated financial information has been prepared in accordance with International Financial Reporting Standards, International 
Accounting Standards and Interpretations (collectively IFRSs), as adopted by the European Union.
For all periods up to and including the period ended 28 June 2015, the Group prepared its financial statements in accordance with United 
Kingdom Generally Accepted Accounting Principles (UK GAAP). These financial statements for the period ended 26 June 2016 are the first 
the Group has prepared in accordance with IFRS. Refer to Note 34 for information on how the Group adopted IFRS.
At the date of authorisation of this financial information, certain new standards, amendments and interpretations to existing standards 
applicable to the Group have been published but are not yet effective, and have not been adopted early by the Group. These are listed below:
Standard/
interpretation Content
Applicable for financial 
years beginning on/after 
IFRS 9 Financial 
Instruments (2009) 
and amendment
IFRS 9 ‘Financial instruments’ is effective for periods commencing on or after 1 
January 2018 subject to endorsement by the EU. IFRS 9 is a replacement for IAS 
39 ‘Financial Instruments’ and covers three distinct areas. Phase 1 contains new 
requirements for the classification and measurement of financial assets and liabilities. 
Phase 2 relates to the impairment of financial assets and requires the calculation of 
impairment on an expected loss basis rather than the current incurred loss basis. 
Phase 3 relates to less stringent requirements for general hedge accounting.
1 January 2018
IFRS 15 Revenue 
from Contracts with 
Customers
IFRS 15, ‘Revenues from Contracts with Customers’, replaces IAS 18, ‘Revenues’, 
and introduces a five step approach to revenue recognition based on performance 
obligations in customer contracts. The International Accounting Standards Board 
(‘IASB’) has proposed to issue some clarifications and to defer the standard’s 
effective date of 1 January 2017 to 1 January 2018. The effective date for the Group 
is also subject to EU endorsement. 
1 January 2018
IFRS 16 Leases IFRS 16 sets out the principles for the recognition, measurement, presentation and 
disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and 
the supplier (‘lessor’). IFRS 16 completes the IASB’s project to improve the financial 
reporting of leases and replaces the previous leases Standard, IAS 17 Leases, and 
related Interpretations.
1 January 2019
The impact of the adoption of the Standards listed above, has not yet been assessed.
46 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 2. ACCOUNTING POLICIES CONTINUED
Basis of consolidation
The consolidated financial information incorporates the financial statements of the Group and all of its subsidiary undertakings. The 
financial statements of all Group companies are adjusted, where necessary, to ensure the use of consistent accounting policies. Acquisitions 
are accounted for under the acquisition method from the date control passes to the Group. On acquisition, the assets and liabilities of a 
subsidiary are measured at their fair values. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is 
recognised as goodwill.
As allowed under IFRS 1, any acquisitions or group reorganisations which occurred after the transition date to IFRS have not been restated 
but instead the previous accounting treatment has been adopted. During the period ended 29 June 2014, Hotel Chocolat Group Limited 
(now plc) was incorporated and undertook a share for share exchange with the direct subsidiaries listed in Note 18. This has been 
accounted for under the basis of merger accounting given that the ultimate ownership before and after the transaction remained the same. 
Merged subsidiaries undertakings are treated as if they had always been a member of the group. Any difference between the nominal value 
of the shares acquired by the Company and those issued by the Company to acquire them is taken to the merger reserve.
Going concern
The Directors have prepared a cash flow forecast covering a period extending beyond 18 months from the financial information presented 
as at 26 June 2016. 
The Directors have taken into account the historic positive cash flows, growth in business and the inherent risks and uncertainties facing 
the business, and have derived forecast assumptions that are the Directors’ best estimate of the future development of the business. The 
forecasts and projections, which take into account the projected trading performance of companies within the Group’s combined bank 
facilities, show that the Group will be able to operate within the level of its current facilities. On this basis, the Directors have a reasonable 
expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they 
continue to adopt the going concern basis of accounting in preparing the consolidated financial information. The financial information does 
not include any adjustments that would result from the going concern basis of preparation being inappropriate.
Revenue recognition
Revenue is the total amount receivable by the Group for goods and services supplied, excluding VAT and trade discounts.
Revenue arising from the sale of goods is recognised when the risks and rewards of owning the product has been transferred to the buyer 
at the point of sale, which is generally on delivery. Revenue is recognised when the amount of revenue can be reliably measured and it is 
probable that the future economic benefit will flow to the entity.
Operating profit
Operating profit is stated after all expenses, including those considered to be exceptional, but before finance income or expenses. Exceptional 
items are items of income or expense which because of their nature or size require separate presentation to allow shareholders to better 
understand the financial performance of the year and allow comparison with prior periods.
47
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
2. ACCOUNTING POLICIES CONTINUED
Foreign currency translation
The Group’s consolidated financial information is presented in sterling, which is also the parent company’s functional currency.
a) Transactions and balances
   Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the Consolidated 
Statement of Comprehensive Income. Foreign exchange gains and losses resulting from the translation of monetary assets and liabilities 
denominated in foreign currencies at the reporting period end exchange rates are also recognised in the Consolidated Statement of 
Comprehensive Income. 
b) Group companies 
   The results and financial position of Group entities that have a functional currency different from the presentation currency are 
translated into the presentation currency as follows:
•    assets and liabilities at each period end are translated at the prevailing closing rate at the date of the Consolidated Statement of Financial 
Position;
•    income and expenses for each period within the Consolidated Statement of Comprehensive Income are translated at the rate of 
exchange at the transaction date. Where this is not possible, the average rate for the period is used; and
•    on consolidation, exchange differences arising from the translation of the net investment in foreign entities are recognised in other 
comprehensive income and accumulated in the translation reserve as a separate component of equity. 
Employee benefits
a) Short-term benefits
   Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated 
services are rendered by employees of the Group.
b) Defined contribution plans
   The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of 
the Group. The annual contributions payable are charged to the Consolidated Statement of Comprehensive Income. The Group also 
contributes to the personal pension plans of some Directors at the Group’s discretion.
Share-based payments
A transaction is accounted for as a share-based payment where the Group receives services from employees, Directors or third parties and 
pays for these in shares or similar equity instruments.
The Group makes equity-settled share-based payments to certain employees and Directors. Equity-settled share-based schemes are 
measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant, measured by use of an appropriate 
valuation model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-
transferability, exercise restrictions and behavioural considerations. 
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the period 
services are received, based on the Group’s estimate of shares that will eventually vest.
The Company is not liable for employer’s National Insurance on the difference between the market value at date of exercise and exercise 
price and therefore this expense is not accrued for.
48 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 2. ACCOUNTING POLICIES CONTINUED
Leases 
Operating leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Rentals 
applicable to operating leases are charged against profits on a straight line basis over the period of the lease.
Onerous lease provisions relate to the present value of the obligation under a lease where the unavoidable costs of the lease exceed  
the economic benefit expected to be received from it.
Dilapidation provisions relate to potential rectification costs expected should the Group vacate any of its retail locations.
Hire purchase agreements and finance leases
Leases where the lessee retains substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets held 
under hire purchase agreements and finance leases are capitalised and disclosed under property, plant and equipment at cost. The capital 
element of the future payments is treated as a liability and the interest element is charged to the Consolidated Statement of Comprehensive 
Income on a straight line basis.
Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item, less 
accumulated depreciation and impairment losses.
For the period ended 28 June 2015, depreciation was provided to write off cost, less estimated residual values, of all property, plant and 
equipment, except for investment properties and freehold land, evenly over their expected useful lives, calculated at the following rates: 
Leasehold property  – Over the remaining lease term
Plant and machinery  – 20% straight line
Fixtures, fittings, equipment, computer software and hardware  – 20% straight line
Freehold property   – 2% straight line
As no finite useful life for land can be determined, related carrying amounts are not depreciated. The useful life, the residual value and the 
depreciation method is assessed annually. 
During the accounting period ended 26 June 2016, management reviewed its estimates of the useful economic life of tangible assets. 
Management now estimates that the useful life of assets is as follows: 
Leasehold property  – Over the remaining lease term
Plant and machinery  – 5 to 10 years on a straight line basis
Fixtures, fittings, equipment, computer software and hardware  – 5 to 10 years on a straight line basis
Freehold property  – 50 years on a straight line basis
The application of this change is from 29 June 2015 and has not been retrospectively applied.
The impact of these changes in the accounting period to 26 June 2016 is a reduction in the depreciation charge of £1,222,091.
The carrying value of the property, plant and equipment is compared to the higher of value in use and the fair value less costs to sell on 
an annual basis. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset then the asset is 
impaired and its value reduced by recognising an impairment provision.
49
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
2. ACCOUNTING POLICIES CONTINUED
Intangible assets
Goodwill arising on the acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair 
value of the assets and liabilities acquired. Positive goodwill is capitalised. 
Impairment tests on the carrying value of goodwill are undertaken:
• at the end of the first full financial period following acquisition and at the end of every subsequent financial period; and
• in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.
Website development costs where Group companies’ websites are expected to generate future revenues in excess of the costs of 
developing those websites, together with expenditure on the functionality of the website is capitalised and treated as an intangible asset. 
Expenditure incurred on maintaining websites and expenditure incurred on developing websites used only for advertising and promotional 
purposes is written off as incurred. 
Software which is not an integral part of hardware assets is stated at historic cost, including expenditure that is directly attributable to the 
acquired item, less accumulated amortisation and impairment losses.
For the period ended 28 June 2015, amortisation was provided to write off cost, less estimated residual values, of all intangible assets, 
except for goodwill, evenly over their expected useful lives, calculated at the following rates: 
Software   – 20% straight line
Website development costs  – 20% straight line
During the accounting period ended 26 June 2016, management reviewed its estimates on the useful economic life of intangible assets. 
Management now estimates that the useful life of assets is as follows: 
Software   – 3 years on a straight line basis
Website development costs   – 3 years on a straight line basis
The application of this change is from 29 June 2015 and has not been retrospectively applied.
The impact of these changes in the accounting period to 26 June 2016 is an increase in the amortisation charge of £361,910.
Inventories
Inventories are carried at the lower of cost or net realisable value. The costs of raw materials, consumables, work in progress and finished 
goods are measured by means of weighted average cost using standard costing techniques. The cost of finished goods comprises direct 
production costs such as raw materials, consumables, utilities and labour, and production overheads such as employee costs, maintenance 
and indirect factory costs. Standard costs are reviewed regularly in order to ensure relevant measures of utilisation, production lead-time 
and appropriate levels of manufacturing expense are reflected in the standards.
Net realisable value is calculated based on the revenue from sale in the normal course of business less any costs to sell. Due allowance is 
made for obsolete and slow moving items.
50 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 2. ACCOUNTING POLICIES CONTINUED
Impairment
a) Impairment of financial assets
All financial assets (other than those categorised at fair value charged through the Consolidated Statement of Comprehensive Income), are 
assessed at the end of each reporting period as to whether there is any objective evidence of impairment as a result of one or more events 
having an impact on the estimated future cash flows of the asset. 
An impairment loss in respect of loans and receivables financial assets is recognised in the Consolidated Statement of Comprehensive 
Income and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, 
discounted at the financial asset’s original effective interest rate.
In a subsequent period, if the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring 
after the impairment was recognised, the previously recognised impairment loss is reversed through the Consolidated Statement of 
Comprehensive Income to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what 
the amortised cost would have been had the impairment not been recognised.
b) Impairment of non-financial assets
The carrying values of intangible assets are reviewed at the end of each reporting period for impairment when there is an indication that 
the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The 
recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value in use, which is measured by reference 
to discounted future cash flow.
An impairment loss is recognised in the Consolidated Statement of Comprehensive Income immediately.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a 
subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to  
the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment 
loss been recognised. The reversal is recognised in the Consolidated Statement of Comprehensive Income immediately. 
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the Consolidated Statement of 
Financial Position differs from its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects 
neither accounting or taxable profit; and
• investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the 
difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the 
difference can be utilised. 
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date 
and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the 
deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
• the same taxable Group company; or 
• different entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the 
liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled 
or recovered.
51
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
2. ACCOUNTING POLICIES CONTINUED
Operating segments
Operating 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 and Chief  
Financial Officer.
The Board considers that the Group’s activity constitutes one operating and one reporting segment, as defined under IFRS 8.  
Management reviews the performance of the Group by reference to total results against budget. 
The total profit measures are operating profit and profit for the period, both disclosed on the face of the Consolidated Statement of 
Comprehensive Income. No differences exist between the basis of preparation of the performance measures used by management  
and the figures in the Group financial information.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short-term highly liquid investments which 
are not subject to significant changes in value and have original maturities of less than three months. The Group’s bank facilities are provided 
under a group facility. 
Equity
Equity comprises the following:
• Share capital: the nominal value of equity shares
• Share premium
• Retained earnings
• Translation reserve
• Merger reserve
• Capital redemption reserve
• Other reserves
Chocolate bonds
The Chocolate Tasting Club plc, a subsidiary of the Group, has issued two chocolate bonds which pay a return in boxes of luxury chocolates 
or, for one of the bonds a Hotel Chocolat gift card. For the bonds with a return in the form of luxury chocolates, the coupon is fixed 
by number of boxes and can only be settled by the delivery of chocolate. At inception, the net cash proceeds received for the bond are 
recognised as a liability. Each year, the cost value of the chocolates is recognised as an interest expense.
For the bond where there is a return paid by way of a Hotel Chocolat gift card which can be redeemed at Hotel Chocolat stores, cafes, 
restaurants and online, there is a fixed rate of interest. At inception, the net cash proceeds received for the chocolate bonds are recognised 
as a liability. Each year the fixed interest rate paid is recognised as an interest expense. 
52 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 2. ACCOUNTING POLICIES CONTINUED
Financial instruments
Financial instruments are classified according to the substance of the contractual arrangements into which the Group enters. An equity 
instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. 
Financial assets 
On initial recognition, financial assets are classified as either financial assets at fair value through income statement, held-to-maturity 
investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. 
The classification depends on the purpose for which the financial assets were acquired. The Group classifies all its financial assets as loans 
and receivables. 
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified 
as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest 
method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables 
when the recognition of interest would be immaterial. The Group’s loans and receivables financial assets comprise trade and other 
receivables and cash and cash equivalents as included in the Consolidated Statement of Financial Position.
Financial liabilities
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.
All financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised 
cost using the effective interest method other than those categorised as fair value through income statement.
Fair value through the income statement category comprises financial liabilities that are either held for trading or are designated to eliminate 
or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for 
trading unless they are designated as hedges. Foreign currency forward contracts were designated as hedges and are included in the Group’s 
financial statements at fair value. 
A financial liability is de-recognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial 
liability is replaced by another from the same party on substantially different terms, or the terms of an existing liability are substantially 
modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and 
the difference in the respective carrying amounts is recognised in the income statement. 
Hedge accounting
Hedge accounting is applied to financial assets and financial liabilities only where all of the following criteria are met:
• At the inception of the hedge there is formal designation and documentation of the hedging relationship and the Group’s risk 
management objective and strategy for undertaking the hedge.
• For cash flow hedges, the hedged item in a forecast transaction is highly probable and presents an exposure to variations in cash flows 
that could ultimately affect profit or loss.
• The cumulative change in the fair value of the hedging instrument is expected to be between 80-125% of the cumulative change in the fair 
value or cash flows of the hedged item attributable to the risk hedged (i.e. it is expected to be highly effective).
• The effectiveness of the hedge can be reliably measured.
• The hedge remains highly effective on each date tested. Effectiveness is tested on a six-monthly basis.
53
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
2. ACCOUNTING POLICIES CONTINUED
Cash flow hedges
The effective part of forward contracts designated as a hedge of the variability in cash flows of foreign currency risk arising from firm 
commitments, and highly probable forecast transactions, are measured at fair value with changes in fair value recognised in other 
comprehensive income and accumulated in other reserves. The Group uses such contracts to fix the cost of foreign currency transactions in 
the functional currency of the Group entity concerned.
If a highly probable forecast transaction results in the recognition of a non-monetary asset, the cumulative loss/(gain) is added to/(subtracted 
from) the cost of the asset acquired (“basis adjustment”). Otherwise the cumulative gain or loss recognised in other comprehensive income 
is reclassified from the cash flow hedge reserve to profit or loss at the same time as the hedged transaction affects profit or loss. The two 
transactions are recognised in the same line item.
If a forecast transaction is no longer considered highly probable but the forecast transaction is still expected to occur, the cumulative gain 
or loss recognised in other comprehensive income is frozen and recognised in profit or loss in accordance with the policy set out in the 
paragraph above. Subsequent changes in the fair value of the derivative are recognised in profit or loss. If the Group closes out its position 
before the transaction takes place (even though it is still expected to take place) the cumulative gain or loss on changes in fair value of the 
derivative is similarly recognised in accordance with the policy set out in the paragraph above. If, at any point, the hedged transaction is no 
longer expected to occur, the cumulative gain or loss is reclassified from the cash flow hedge reserve to profit or loss immediately.
Equity instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as 
a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for distribution.
3. SUMMARY OF CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the 
Directors to exercise their judgement in the process of applying the accounting policies which are detailed above. These judgements are 
continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of 
future events that are believed to be reasonable under the circumstances. 
The key estimates and underlying assumptions concerning the future and other key sources of estimation uncertainty at the statement of 
financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the 
next financial period are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate 
is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and 
future periods.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities 
are discussed below:
• Useful lives of depreciable assets
  Management reviews the useful lives of depreciable assets at each reporting date to ensure that the useful lives represent a reasonable 
estimate of likely period of benefit to the Group. Actual useful lives however, may vary due to unforeseen events.
• Impairment
  IFRS requires management to undertake an annual test for impairment of indefinite life assets and, for finite life assets, to test for 
impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
54 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 3. SUMMARY OF CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS CONTINUED
Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be 
supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at 
an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of 
highly uncertain matters including management’s expectations of:
• growth in EBITDA, calculated as adjusted operating profit before depreciation and amortisation;
• long-term growth rates; and
• the selection of discount rates to reflect the risks involved.
  The Group prepares financial budgets on an annual basis, and monitors predicted financial performance and cash flow on a rolling 
monthly basis. These budgets and analyses are used in the calculations.
  Changing the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow 
projections, could significantly affect the Group’s impairment evaluation and hence results.
• Valuation of intangible assets
  The determination of the fair value of assets and liabilities including goodwill arising on the acquisition of businesses, website 
development expenditure and software, which is expected to generate future economic benefits, is based, to a considerable extent,  
on management’s judgement.
  The fair value of these assets is determined by discounting estimated future net cash flows generated by the asset where no active market 
for the assets exists. The use of different assumptions for the expectations of future cash flows and the discount rate would change the 
valuation of the intangible assets.
  Allocation of the purchase price affects the results of the Group as finite life intangible assets are amortised, whereas indefinite life 
intangible assets, including goodwill, are not amortised and could result in differing amortisation charges based on the allocation to 
indefinite life and finite life intangible assets.
4. REVENUE
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Sale of goods 91,089,824 81,068,364
Total revenue 91,089,824 81,068,364
Segmental analysis 
The Group operates in three main geographic areas: UK, Europe and Rest of World. The Board of Directors monitors revenue on this basis. 
Revenue for each of the geographical areas is as follows:
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Revenue by location
United Kingdom 88,915,149 78,621,649
Europe 1,879,240 2,040,081
Rest of World 295,435 406,634
Total revenue 91,089,824 81,068,364
The geographical allocation of revenue has been updated to reflect the current basis monitored by the Board.
Non-current assets not held in the United Kingdom amount to £9,409,036 in the period ended 26 June 2016 (28 June 2015: £160,603).
55
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
5. PROFIT FROM OPERATIONS
Profit from operations is arrived at after charging/(crediting):
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Staff cost (see Note 7) 24,835,020 22,444,632
Depreciation of property, plant and equipment 2,516,632 4,044,602
Impairment of property, plant and equipment – 131,998
Amortisation of intangible assets 676,977 194,542
Loss on disposal of property, plant and equipment and intangible assets 128,874 –
Operating leases:
  – Property 8,189,509 7,865,974
  – Plant and equipment 145,185 185,133
Exchange differences 48,725 (281,005)
Exceptional costs 2,642,177 –
Bad debt expense 126,967 43,016
Exceptional costs for the period ended 26 June 2016 relate solely to the acquisition of Hotel Chocolat Estates Limited and the admission to 
trading on AIM.
6. AUDIT AND NON-AUDIT FEES
An analysis of auditors’ remuneration is as follows:
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Audit fees 117,900 76,200
Audit related assurance services 45,212 –
Taxation compliance services 185,560 111,494
Other taxation advisory services 126,336 71,283
Corporate finance services 308,500 –
Other services 39,828 –
Non-audit fees 705,436 182,777
The above fees for the period ended 26 June 2016 include exceptional costs totaling £389,172 (28 June 2015: £ nil).
56 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 7. STAFF COSTS
The average number of employees (including directors) during the period was made up as follows:
52 weeks ended 
26 June 2016
52 weeks ended 
28 June 2015
Production staff 195 158
Administrative staff 737 671
Total 932 829
The cost of employees (including Directors) during the period was made up as follows:
52 weeks ended 
26 June 2016
£
52 weeks ended 
28 June 2015
 £
Wages and salaries 22,842,934 20,603,231
Share-based payments 64,642 –
Social security costs 1,778,662 1,704,244
Pension costs 148,782 137,157
Total 24,835,020 22,444,632
8. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Key management personnel represent those personnel which hold a statutory directorship of a company within the Group. Directors’ 
emoluments and benefits include:
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Short-term employee benefits 1,206,628 1,418,122
Share-based payments 38,715 –
Post-employments benefits 10,383 12,018
Total 1,255,726 1,430,140
57
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
9. SHARE-BASED PAYMENTS
The Hotel Chocolat Group plc 2016 Long-Term Incentive Plan
Under the Hotel Chocolat Group plc 2016 Long-Term Incentive Plan, the Group gives awards to Directors and staff subject to the 
achievement of a pre-agreed net profit figure for the financial year of the Company ending 30 June 2019. These shares vest after the 
delivery of the audited net profit figure for financial year ending 30 June 2019 has been announced.
Awards are forfeited if the employee leaves the Group before the awards vest, except under circumstances where the employee is 
considered a ‘Good Leaver’.
Details of the share awards outstanding are as follows:
52 weeks ended 
26 June 2016
52 weeks ended 
28 June 2015
Number of 
share options
Weighted average 
exercise price 
£
Number of 
share options
Weighted average 
exercise price 
£
Outstanding at beginning of the period – – – –
Granted during the period 2,972,000 1.48 – –
Exercised during the period – – – –
Forfeited during the period – – – –
Outstanding at the end of the period 2,972,000 1.48 – –
Exercisable at the end of the period – 1.48 – –
The awards outstanding at the end of 26 June 2016 have a weighted average remaining contractual life of 3.25 years (28 June 2015: nil) and 
an exercise price of £1.48 (28 June 2015: £ nil).
The Group recognised total expenses related to the above equity-settled share-based payment transactions in the form of options during 
the period ended 26 June 2016 of £64,642 (28 June 2015: £ nil).
The aggregate of the fair value of the options granted during the period ended 26 June 2016 was £1,292,820 (28 June 2015: £ nil).
The fair values were calculated using a Black Scholes model. The inputs used for fair valuing awards granted during the period was as follows:
52 weeks ended 
26 June 2016 
52 weeks ended 
28 June 2015 
Weighted average share price (£) 1.48 –
Exercise price (£) 1.48 –
Expected volatility (%) 32.0% –
Option life (years) 10.0 –
Risk free interest rate (%) 0.8% –
In the absence of any historical volatility data for Hotel Chocolat Group plc, the expected volatility was determined by reviewing the 
volatility of the share price of similar entities which are currently traded on AIM.
58 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 10. FINANCE INCOME AND EXPENSES
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Interest from related party 171,997 188,336
Interest on bank deposits 109 –
Other income – 153
Finance income 172,106 188,489
Interest on bank borrowings and overdraft 572,150 400,902
Interest on derivative financial liabilities 57,645 –
Finance leases and hire purchase contracts 30,020 31,654
Finance charges on Chocolate bonds 287,069 287,252
Finance expenses 946,884 719,808
11. TAXATION 
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
UK corporation tax 1,409,454 887,114
Adjustment in respect of previous periods (93,207) (26,931)
Overseas corporation tax 10,507 –
Total current tax charge 1,326,754 860,183
Deferred tax:
Adjustment in respect of prior periods (2,518) –
Origination and reversal of timing differences 183,054 24,026
Total tax expense 1,507,290 884,209
Tax on derivative financial liabilities 114,446 –
Deferred tax 114,446 –
59
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
11. TAXATION CONTINUED
Factors affecting current tax charge:
The tax assessed on the profit for the period is different to the standard rate of corporation tax in the UK. The differences are 
explained below:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Profit on ordinary operations before income tax 5,591,094 2,931,432
Weighted average standard rate of corporation tax 20.00% 20.75%
Profit for the period multiplied by the standard rate of corporation tax 1,118,219 608,272
Effects of:
Expenses not deductible for tax purposes 338,860 50,438
Permanent depreciation 200,852 229,908
Adjustment in respect of prior periods (95,725) (27,381)
Adjust closing deferred tax in respect of change in future rate of taxation 10,878 7,073
Adjust opening deferred tax in respect of change in future rate of taxation 2,359 (9,033)
Movement to unrecognised deferred tax (68,153) 24,932
Tax expense 1,507,290 884,209
The Group’s effective tax rate for the period ended 26 June 2016 was 27.0% (28 June 2015: 30.2%). The effective rate is an amalgamation of 
UK and European rates for the periods reported. The change from year to year has been particularly affected by the costs incurred by the 
Group in relation to the admission to trading on AIM. The majority of the costs are considered to be capital for tax purposes and therefore 
not deductible. At 26 June 2016 the Group has tax losses to carry forward against future profits of £21,000 (28 June 2015: £217,000). The 
tax value of such losses amounted to approximately £4,000, have no expiry date and have not been recognised as a deferred tax asset. 
12. EARNINGS PER SHARE
Profit for the period used in the calculation of the basic and diluted earnings per share: 
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Profit after tax for the period 4,083,804 2,047,223
The weighted average number of shares for the purposes of diluted earnings per share reconciles to the weighted average number of shares 
used in the calculation of basic earnings per share as follows:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Weighted average number of shares in issue used in  
the calculation of basic earnings per share (number) 103,411,610 10,200,040
Earnings per share – Basic and Diluted (pence) 3.9 20.1
Due to the nature of the options granted under the Hotel Chocolat Group plc 2016 Long-Term Incentive Plan, they are considered to be 
contingently issuable shares and therefore have no dilutive effect.
For further information on the movements in the share capital, please refer to Note 24.
60 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 13. INTANGIBLE ASSETS
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015
 £
Goodwill arising on consolidation (Note (a)) 914,098 683,534
Computer software and website costs (Note (b)) 942,702 869,899
1,856,800 1,553,433
(a) Goodwill arising on consolidation 
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
At beginning of period 683,534 683,534
Acquired on business combinations (see Note 29) 230,564 –
At end of period 914,098 683,534
The recoverable amount of the goodwill has been determined on a value in use basis. This has been based on the performance of the 
business and management’s forecasts, which assume that the business will perform at least as well as the market generally. The forecasts 
take into account management’s experience and are discounted at a pre-tax rate of 10%.
(b) Computer software and website costs
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Cost:
At beginning of period 1,652,098 1,416,314
Additions 760,224 235,784
Disposals (18,987) –
At end of period 2,393,335 1,652,098
Amortisation:
At beginning of period 782,199 587,657
Amortisation charge 676,977 194,542
Disposals (8,543) –
At end of period 1,450,633 782,199
Net book value 942,702 869,899
61
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
14. PROPERTY, PLANT AND EQUIPMENT
Freehold 
property 
£
Leasehold 
property
 £
Furniture & fittings, 
Equipment, Computer 
software & hardware
 £
Plant & 
machinery 
£
Total
 £
52 weeks ended 28 June 2015
Cost:
As at 29 June 2014 2,840,841 734,999 19,110,012 9,343,245 32,029,097
Additions – – 2,268,415 169,390 2,437,805
Translation differences – – (59,341) – (59,341)
As at 28 June 2015 2,840,841 734,999 21,319,086 9,512,635 34,407,561
Accumulated depreciation:
As at 29 June 2014 251,082 730,406 10,510,017 6,506,608 17,998,113
Depreciation charge 28,409 950 2,841,888 1,173,355 4,044,602
Impairments – – 131,998 – 131,998
Translation differences – – (61,416) – (61,416)
As at 28 June 2015 279,491 731,356 13,422,487 7,679,963 22,113,297
Net book value
As at 28 June 2015 2,561,350 3,643 7,896,599 1,832,672 12,294,264
52 weeks ended 26 June 2016
Cost:
As at 29 June 2015 2,840,841 734,999 21,319,086 9,512,635 34,407,561
Acquisition on business combinations 8,244,800 – 505,625 – 8,750,425
Additions 35,009 – 2,342,334 5,191,022 7,568,365
Disposals – – (1,425,415) (41,069) (1,466,484)
Translation differences 348,805 – 157,562 – 506,367
As at 26 June 2016 11,469,455 734,999 22,899,192 14,662,588 49,766,234
Accumulated depreciation:
As at 29 June 2015 279,491 731,356 13,422,487 7,679,963 22,113,297
Depreciation charge 51,943 950 1,601,429 862,310 2,516,632
Disposal – – (1,106,985) (41,069) (1,148,054)
Translation differences 77,178 – 96,070 – 173,248
As at 26 June 2016 408,612 732,306 14,013,001 8,501,204 23,655,123
Net book value
As at 26 June 2016 11,060,843 2,693 8,886,191 6,161,384 26,111,111
Included above are assets held under finance leases and hire purchase agreements which, as at 26 June 2016 had a net book value of 
£557,454 (28 June 2015: £869,845).
62 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 15. DEFERRED INCOME TAX ASSET
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Deferred taxation asset 149,903 215,993
149,903 215,993
Reconciliation of deferred tax balances:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015
 £
Balance at beginning of period 215,993 240,019
Deferred tax charge for the period through Statement of Comprehensive Income (180,536) (24,026)
Deferred tax credit for the period through Statement of Changes in Equity 114,446 –
Balance at end of period 149,903 215,993
The provision for deferred taxation consists of the tax effect of timing differences in respect of:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Fixed asset differences (28,015) 154,765
Short-term differences 51,733 61,228
Derivative financial liabilities 114,446 –
Share-based payments 11,739 –
149,903 215,993
At 26 June 2016, the Group has unrecognised deferred tax assets amounting to £42,000 (28 June 2015: £128,000).
16. INVENTORIES
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Raw materials 1,906,706 1,025,109
Finished goods 4,697,398 3,468,732
6,604,104 4,493,841
17. TRADE AND OTHER RECEIVABLES  
There were no material receivables which were past due but not impaired at the end of any period.
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015
 £
Current
Trade receivables 839,304 584,863
Other receivables 128,324 93,959
Prepayments 4,567,207 4,425,220
Related parties – 8,568,424
5,534,835 13,672,466
Non-current
Prepayments 7,461 –
7,461 –
63
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
18. INVESTMENT IN SUBSIDIARIES
The Group’s operating subsidiaries as at 26 June 2016 are as follows:
Name Principal activities
Country  
of business / 
incorporation
Proportion of 
ordinary shares 
directly held by 
parent
Proportion of 
ordinary shares 
held by the 
Group
Direct Holding
HOTC Limited Holding Company England & Wales 100%
Hotel Chocolat Limited Manufacturer and  
Distributor of chocolates England & Wales 100%
The Chocolate Tasting Club plc Chocolate Retailer England & Wales 100%
HC International Limited Holding Company Malta 100%
Hotel Chocolat USA Inc Holding Company USA 100%
Hotel Chocolat (St Lucia)  
Holdings Limited
Holding Company
St Lucia 100%
Indirect Holdings
Hotel Chocolat Retail Limited Chocolate Retailer England & Wales 100%
Hotel Chocolat Stores Limited Property Holding Company England & Wales 100%
Rabot Estate UK Limited Chocolate Retailer and Restaurateur England & Wales 100%
Hotel Chocolat Europe Limited Chocolate Retailer England & Wales 100%
Hotel Chocolat Corporate Limited Dormant England & Wales 100%
HCIP Limited Trademark Holder Malta 100%
HC Sales Limited Chocolate Distributor Malta 100%
CTC Distribution GmbH Chocolate Distributor Switzerland 100%
Chocolate Tasting Club Inc Dormant USA 100%
Hotel Chocolat Inc Dormant USA 100%
Hotel Chocolat Estates Limited Hotel & Cocoa Plantation St Lucia 100%
HCRF Inc Dormant USA 100%
Almondhill Properties Limited Property Holding Company England & Wales 100%
Applehill Properties Limited Property Holding Company England & Wales 100%
Apricothill Properties Limited Property Holding Company England & Wales 100%
Bananahill Properties Limited Property Holding Company England & Wales 100%
Braeburnhill Properties Limited Property Holding Company England & Wales 100%
Bramleyhill Properties Limited Property Holding Company England & Wales 100%
Brazilnuthill Properties Limited Property Holding Company England & Wales 100%
Cashewhill Properties Limited Property Holding Company England & Wales 100%
Chestnuthill Properties Limited Property Holding Company England & Wales 100%
Colanuthill Properties Limited Property Holding Company England & Wales 100%
Crispinhill Properties Limited Property Holding Company England & Wales 100%
Croftonhill Properties Limited Property Holding Company England & Wales 100%
Datehill Properties Limited Property Holding Company England & Wales 100%
Dulcethill Properties Limited Property Holding Company England & Wales 100%
Gingerhill Properties Limited Property Holding Company England & Wales 100%
Grapehill Properties Limited Property Holding Company England & Wales 100%
64 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 18. INVESTMENT IN SUBSIDIARIES CONTINUED
Name Principal activities
Country  
of business / 
incorporation
Proportion of 
ordinary shares 
directly held by 
parent
Proportion of 
ordinary shares 
held by the 
Group
Indirect Holdings continued
Groundnuthill Properties Limited Property Holding Company England & Wales 100%
Guavahill Properties Limited Property Holding Company England & Wales 100%
Hazelnuthill Properties Limited Property Holding Company England & Wales 100%
Hotel Chocolat DK Limited Property Holding Company England & Wales 100%
Hotel Chocolat NL Limited Property Holding Company England & Wales 100%
Kiwihill Properties Limited Property Holding Company England & Wales 100%
Lemonhill Properties Limited Property Holding Company England & Wales 100%
Limehill Properties Limited Property Holding Company England & Wales 100%
Macadamiahill Properties Limited Property Holding Company England & Wales 100%
Mandarinhill Properties Limited Property Holding Company England & Wales 100%
Mangohill Properties Limited Property Holding Company England & Wales 100%
Melonhill Properties Limited Property Holding Company England & Wales 100%
Olivehill Properties Limited Property Holding Company England & Wales 100%
Orangehill Properties Limited Property Holding Company England & Wales 100%
Papayahill Properties Limited Property Holding Company England & Wales 100%
Peachhill Properties Limited Property Holding Company England & Wales 100%
Peanuthill Properties Limited Property Holding Company England & Wales 100%
Pearhill Properties Limited Property Holding Company England & Wales 100%
Pearmainhill Properties Limited Property Holding Company England & Wales 100%
Pecanhill Properties Limited Property Holding Company England & Wales 100%
Pinenuthill Properties Limited Property Holding Company England & Wales 100%
Pippinhill Properties Limited Property Holding Company England & Wales 100%
Plumhill Properties Limited Property Holding Company England & Wales 100%
Raisinhill Properties Limited Property Holding Company England & Wales 100%
Russethill Properties Limited Property Holding Company England & Wales 100%
Satsumahill Properties Limited Property Holding Company England & Wales 100%
Sloehill Properties Limited Property Holding Company England & Wales 100%
Walnuthill Properties Limited Property Holding Company England & Wales 100%
65
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
19. CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Cash and cash equivalents 6,475,446 4,939,924
Bank overdraft – (10,637,314)
6,475,446 (5,697,390)
In April 2016, the Group negotiated a two-year, bilateral revolving credit facility (RCF), which replaces the overdraft facility. 
In the previous financial periods, the bank overdraft was secured by a charge over the Group’s assets and cross guarantees. The interest 
rate charged until 4 October 2014 was 2.0% over base rate. On 5 October 2014, the interest rate was increased to 3.9% over base rate and 
subsequently reduced to 3.2% over base rate on 1 July 2015. Following the repayment of the loan in March 2016, the interest rate on the 
overdraft facility was reduced to 2.0% over base rate.
20. TRADE AND OTHER PAYABLES
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Current
Trade payables 5,439,251 4,631,750
Other payables 3,416,370 1,629,735
Other taxes payable 810,114 1,418,345
Accruals 6,668,456 4,530,252
16,334,191 12,210,082
Non-current
Other payables and accruals 1,485,090 1,774,731
1,485,090 1,774,731
21. DERIVATIVE FINANCIAL LIABILITIES
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Current
Foreign currency forward contracts 554,529 –
554,529 –
Non-current
Foreign currency forward contracts 85,075 –
85,075 –
The fair value of the derivative financial liabilities are split between current and non-current depending on the remaining maturity of the 
derivative contract and its contractual cash flows. 
The fair value of foreign currency forward contracts are based on observable information on exchange and interest rates. The hedged 
forecast transactions denominated in foreign currency are expected to occur at various dates within the next 18 months. Gains and losses on 
foreign currency forward contracts which have been recognised in the hedging reserve in equity as at 26 June 2016, will be recognised in the 
Consolidated Statement of Comprehensive Income in the periods during which the hedged forecast transaction occurs. 
The maximum exposure to credit risk at the reporting date is the fair value of the derivative liabilities in the Consolidated Statement of 
Financial Position. 
66 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 21. DERIVATIVE FINANCIAL LIABILITIES CONTINUED
The movement in the fair value on forward contracts in the period of £581,959 (28 June 2015: £ nil) has been included within other 
comprehensive income in the Consolidated Statement of Comprehensive Income. 
There are no forecast transactions for which hedge accounting had previously been used, but which are no longer expected to occur.
22. BORROWINGS
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Current
Finance and lease hire purchase liabilities 425,544 397,750
Chocolate bonds 102,000 –
Bank loans – 556,771
527,544 954,521
Unamortised costs of issue (95,000) –
Total current borrowings 432,544 954,521
Non-current
Finance and lease hire purchase liabilities 35,462 441,718
Chocolate bonds 6,610,000 6,857,000
6,645,462 7,298,718
Unamortised costs of issue (2,250) –
Total non-current borrowings 6,643,212 7,298,718
Total borrowings 7,075,756 8,253,239
Finance and lease 
hire purchase 
liabilities 
£
Chocolate 
bonds 
£
Bank loans
£
Total 
£
Maturity of debt
52 weeks ended 28 June 2015
In one year or less or on demand 397,750 – 556,771 954,521
In more than two years but not more than five years 441,718 6,857,000 – 7,298,718
In more than five years – – – –
Total non-current borrowings 441,718 6,857,000 – 7,298,718
Total borrowings 839,468 6,857,000 556,771 8,253,239
52 weeks ended 26 June 2016
In one year or less or on demand 425,544 102,000 – 527,544
In more than one year but not more than two years 35,462 – – 35,462
In more than two years but not more than five years – 6,610,000 – 6,610,000
In more than five years – – – –
Total non-current borrowings 35,462 6,610,000 – 6,645,462
Unamortised costs of issue – – (97,250) (97,250)
Total borrowings 461,006 6,712,000 (97,250) 7,075,756
67
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
22. BORROWINGS CONTINUED
Chocolate bonds pay a return either in boxes of luxury chocolates or by way of a Hotel Chocolat gift card. For those bonds with a return 
in the form of chocolate, the coupon is fixed by number of boxes. For bonds where there is a return paid by way of a Hotel Chocolat gift 
card, there is a fixed rate of interest. The interest as stated on issue of the bonds ranged between 6.7% and 7.3%. 
Chocolate bonds are repayable subject to formal notice given six months prior to a redemption note. In order to redeem the bond, 
notice must be given by January and payment is made in July of the same year. For the chocolate bonds issued in June 2010, where notice 
has been given the amount repayable is shown within current liabilities. The remaining bonds for which notice has not yet been given are 
shown within non-current liabilities. The first notice date for the chocolate bonds issued in June 2014, will be January 2017 and therefore all 
amounts are shown within non-current liabilities. Both bonds are unsecured.
On 27 April 2016, the Group negotiated a two-year, bilateral revolving credit facility (RCF). Interest is charged at 1.9% over base rate and a 
commitment fee of 0.8% is due on the available commitment not yet drawn down. 
In the previous financial period, interest on the bank loan was charged at 3.9% over base rate. The bank loan was repaid in March 2016 and 
was secured by a charge over the Group’s assets and cross guarantees.
The hire purchase and finance leases are secured by a charge over the related fixed assets and have incurred interest at an effective annual 
rate of 2.0%. 
23. PROVISIONS
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Non-current
Onerous lease provision – 192,143
Lease dilapidations provision 464,486 476,755
464,486 668,898
The onerous lease provision relates to the present value of the obligation under a lease where the unavoidable costs of the lease exceed 
the economic benefit expected to be received from it.
The dilapidations provision relates to potential rectification costs expected should the Group vacate its retail locations. 
The movements in onerous lease provisions and dilapidations provisions are summarised below:
Onerous lease 
provision
 £
Lease 
dilapidation 
provision
 £
Total
 £
52 weeks ended 28 June 2015
At beginning of period 339,750 599,965 939,715
Released through profit and loss (147,607) (295,245) (442,852)
Amounts capitalised during the period – 172,035 172,035
At end of period 192,143 476,755 668,898
52 weeks ended 26 June 2016
At beginning of period 192,143 476,755 668,898
Released through profit and loss - (57,269) (57,269)
Utilised during the period (192,143) - (192,143)
Amounts capitalised during the period - 45,000 45,000
At end of period – 464,486 464,486
68 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 23. PROVISIONS CONTINUED 
Provisions for onerous leases and dilapidations are inherently uncertain in terms of quantum and timing, not least because they involve 
negotiations with landlords at future dates. The figures provided in the financial statements represents management’s best estimate of the 
likely outflows to the Group.
24. SHARE CAPITAL
As at 26 June 2016 As at 28 June 2015
Shares £ Shares £
Allotted, called up and fully paid:
Ordinary shares of £0.01 each – – 10,200,040 102,000
Ordinary shares of £0.001 each 112,837,828 112,838 – –
GS1 shares of £0.0001 each – – 3,298,500 330
GS2 shares of £0.0001 each – – 10,880,000 1,088
112,837,828 112,838 24,378,540 103,418
Period ending 26 June 2016:
On 3 May 2016, 10,200,040 Ordinary shares of £0.01 each were sub-divided into 102,000,400 Ordinary shares of £0.001 each.  
On 4 May 2016, 3,248,620 GS1 shares were converted to 324,862 Interim Shares of £0.001 each and on 10 May 2016, 2,569,156  
Interim shares of £0.001 each were converted to Ordinary shares of £0.001 each.
On 3 May 2016, 49,880 GS1 shares of £0.0001 and 240,000 GS2 shares of £0.0001 were cancelled and on 10 May 2016, the remaining 
11,940,000 GS2 shares were purchased by Hotel Chocolat Group plc and cancelled.
On 12 August 2015, 1,300,000 GS2 shares were allotted and issued at par, for cash. On 10 May 2016, 8,108,108 new Ordinary shares  
were issued at £1.48 per share, for cash, pursuant to the admission of Hotel Chocolat Group plc to AIM. 
On 4 May 2016, a bonus issue of 160,164 Ordinary shares of £0.001 each were allotted and issued. On 10 May 2016, a bonus issue of 
2,244,294 Interim shares of £0.001 was allotted and issued. 
Period ending 28 June 2015:
On 6 May 2015, 3,298,500 GS1 shares of £0.0001 and 10,880,000 GS2 shares of £0.0001 were allotted and issued at par, for cash.
On 25 November 2014, 110,949 ‘B’ shares of £0.01, 110,946 ‘C’ shares of £0.01, 142,955 ‘D’ shares of £0.01 and 142,952 ‘E’ shares of  
£0.01 were repurchased and cancelled on 4 December 2014.
69
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
25. RESERVES
This note explains material movements recorded in shareholders’ equity that are not explained elsewhere in the financial statements. The 
movements in equity and the balance sheet at 26 June 2016 are presented in the Consolidated Statement of Changes in Equity.
Share  
capital 
£
Share  
premium 
£
Capital 
redemption 
reserve 
£
52 weeks ended 28 June 2015
At beginning of period 107,078 – –
Capital redemption (5,078) – 5,078
Issued during the period for cash 1,418 – –
At end of period 103,418 – 5,078
52 weeks ended 26 June 2016
At beginning of period 103,418 – 5,078
Capital redemption (1,223) – 1,223
Issued during the period for cash 8,238 11,991,892 –
Bonus issue during the period 2,405 (2,405) –
Costs of issue of new equity – (240,000) –
At end of period 112,838 11,749,487 6,301
The capital redemption reserve represented the aggregate nominal value of all the ordinary shares repurchased and cancelled by the Group. 
The merger reserve arose when the Company undertook a share for share exchange with the companies listed in Note 18 and is not 
distributable by way of dividends.
The translation reserve represents cumulative foreign exchange differences arising from the translation of the financial statements of foreign 
subsidiaries and is not distributable by way of dividends.
Other reserves includes the movements in share-based payments and derivative financial liabilities. For further details, refer to Notes 9 and 
21 respectively.
26. LEASE COMMITMENTS
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating 
leases, which fall due as follows:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Land and buildings
Operating leases which expire:
Within one year 7,177,794 5,506,791
In two to five years 20,184,525 12,755,081
In over five years 12,273,996 5,961,877
39,636,315 24,223,749
Other
Operating leases which expire:
Within one year 115,080 –
In two to five years 133,518 –
248,598 –
70 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 27. CAPITAL COMMITMENTS
There were no amounts contracted for but not provided for as at 26 June 2016 (28 June 2015: £ nil). 
28. RELATED PARTY TRANSACTIONS
Remuneration of Directors and other transactions
The remuneration of the key management personnel of the company are disclosed in Note 8. Interests and related party transactions are 
disclosed below. 
The Group rents property in the ordinary course of business on an arm’s length basis from Harwell Management Limited, a company in 
which P M Harris and A Thirlwell have a material interest. The rentals totalled £180,000 in the period ended 26 June 2016 (28 June 2015: 
£40,000). In the prior period, the rent for three quarters’ was waived. There were no amounts due at either period end.
No other amounts were due to directors (28 June 2015: £nil).
Trading transactions
As explained in Note 29, Hotel Chocolat Group plc completed the acquisition of Hotel Chocolat Estates Limited during the period  
and loans to the value of £8,901,181 were capitalised as part of the transaction. Prior to the acquisition, Hotel Chocolat Estates Limited  
was considered a related party as the entity was jointly controlled by P M Harris and A Thirlwell.
29. ACQUISITION OF HOTEL CHOCOLAT ESTATES LIMITED
On 24 April 2016, the Group completed the acquisition of Hotel Chocolat Estates Limited. The acquisition comprised of the 136 acre 
Rabot Estate in Saint Lucia, which currently includes a working cocoa plantation with propagation nurseries, a ‘tree to bar’ chocolate making 
experience for paying visitors, and a luxury boutique hotel called Boucan, which comprises 14 guest rooms, a spa and a 60-cover restaurant; 
and the 85 acre Delcer Estate in Saint Lucia which comprises largely undeveloped land.
Hotel Chocolat Group plc capitalised a loan due from Hotel Chocolat Estates Limited to the value of £8,901,181 and paid £54,921 in return 
for 100% of the issued share capital.
The book values of identifiable assets and liabilities acquired and their fair value to the Group was as follows:
Book Value 
£
Adjustment 
£
Fair Value
 £
Identifiable assets and liabilities acquired:
Property, plant & equipment 5,996,413 2,754,012 8,750,425
Trade and other receivables 129,082 – 129,082
Cash 282,927 – 282,927
Trade and other payables (436,896) – (436,896)
Total net assets 5,971,526 2,754,012 8,725,538
Fair value of consideration paid:
Cash 54,921
Capitalisation of loan receivable from Hotel Chocolat Estates Limited 8,901,181
Total consideration 8,956,102
Goodwill arising (Note 13) 230,564
On acquisition, Hotel Chocolat Estates Limited held trade and other receivables with a book and fair value of £129,082 representing 
contractual receivables of £129,082. The Group therefore expects to collect all contractual receivables. 
The goodwill arising on the Hotel Chocolat Estates Limited acquisition is not deductible for tax purposes. 
71
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
29. ACQUISITION OF HOTEL CHOCOLAT ESTATES LIMITED CONTINUED
Since the acquisition date, Hotel Chocolat Estates Limited has contributed £295,435 to Group revenues and a loss of £71,191 to Group 
profit. If the acquisition had completed on 29 June 2015, the total Group revenues for financial year ending 26 June 2016 would have been 
£92,636,086. The total Group profit for the same period would have been £3,561,008. This proforma information is for illustrative purposes 
only and is not necessarily an indication of the revenues and results of the Group that actually would have been achieved had the acquisition 
been completed on 29 June 2015, nor is it intended to be a projection of future results.
30. CATEGORIES OF FINANCIAL INSTRUMENTS
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015
 £
Financial assets
At amortised cost
Trade and other receivables (excluding prepayments) 975,089 9,247,246
Cash and cash equivalents 6,475,445 4,939,924
7,450,534 14,187,170
Financial liabilities
At amortised cost
Trade and other payables 8,785,864 7,099,035
Total borrowings 7,075,756 8,253,239
Accruals 6,668,456 4,530,252
Bank overdraft – 10,637,317
22,530,076 30,519,843
At fair value
Derivative financial liabilities 581,959 –
In the Directors’ view, the fair value of the Group’s borrowings is considered to be equal to their carrying value.
31. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk and 
price risk), credit risk and liquidity risk. 
Market risk
Foreign exchange risk
The Group enters into foreign currency forward contracts in order to manage the exposure to foreign exchange risk which arises  
on transactions denominated in foreign currencies. Refer to Note 21 for further information about the Group’s foreign currency  
forward contracts.
Interest Risk
The Group is exposed to interest rate risk from its RCF, which carries interest at variable rates on amounts which are drawn down. 
Drawdowns are typically short-term and used to fund working capital. 
Price risk
Price risk is the risk that oscillation in the price of key input costs will affect the profitability of the business. The Group manages this risk by 
agreeing long–term prices with suppliers where possible.
72 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 31. FINANCIAL RISK MANAGEMENT CONTINUED
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order 
to minimise this risk the Group endeavours only to deal with companies which are demonstrably creditworthy. In addition, a significant 
proportion of revenue results from cash transactions. The aggregate financial exposure is continuously monitored. The maximum exposure 
to credit risk is the value of the outstanding amount of trade receivables. The management do not consider that there is any concentration 
of risk within trade receivables. 
Ageing analysis:
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015
 £
Trade receivables
Up to three months 843,137 618,632
Three to six months 91,093 9,847
Above six months – 159,983
Impairment provision (94,926) (203,599)
Total 839,304 584,863
These receivables are not secured by any collateral or credit enhancement.
The exposure of credit risk for trade receivables by geographical region is as follows:
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
United Kingdom 821,902 533,975
Europe 4,486 50,888
Rest of World 12,916 –
Total 839,304 584,863
Liquidity risk
The Group currently holds cash balances to provide funding for normal trading activity. The Group also has access to both short-term and long-
term borrowings to finance individual projects. Trade and other payables are monitored as part of normal management routine.
Borrowings and other liabilities mature according to the following schedule: 
Within  
one year 
£
One to 
 two years 
£
Two to 
 five years 
£
52 weeks ended 28 June 2015
Trade and other payables 10,791,737 1,774,731 –
Borrowings 979,060 – 8,067,913
Bank overdraft 10,637,314 – –
22,408,111 1,774,731 8,067,913
52 weeks ended 26 June 2016
Trade and other payables 15,524,077 1,485,090 –
Borrowings 583,215 102,311 7,328,692
16,107,292 1,587,401 7,328,692
73
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
31. FINANCIAL RISK MANAGEMENT CONTINUED
Capital risk management
The Group’s capital management objectives are:
• to ensure the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits  
for other stakeholders; and
• to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk.
To meet these objectives, the Group reviews the budgets and forecasts on a regular basis to ensure there is sufficient capital to meet  
the needs of the Group.
The capital structure of the Group consists of shareholders’ equity as set out in the Consolidated Statement of Changes in Equity.  
All working capital requirements are financed from existing cash resources and borrowings.
Fair value hierarchy
The financial instruments on the Hotel Chocolat Group plc Consolidated Statement of Financial Position are measured at either fair value or 
amortised cost.
Cash and cash equivalents, trade and other receivables, trade and other payables, accruals and borrowings have been excluded from this 
analysis as they are recognised in the financial statements at their carrying value which also approximates the fair values of those financial 
instruments; therefore, no separate disclosure for fair value hierarchy is required. 
The financial instruments are grouped into Levels based on the degree to which the inputs used to calculate the fair value are observable.
– Level 1 fair value measurements are those derived from quoted process (adjusted) in active markets for identical assets and liabilities. 
–  Level 2 fair value measurements are those derived from inputs other that quoted prices included within Level 1 that are observable for 
the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from process).
The Group measures its derivative financial liabilities relating to foreign currency forward contracts at fair value and these are grouped as 
Level 2 instruments. Movements on the underlying value of financial instruments of foreign exchange contracts have been measured versus 
market rates and therefore are easily identifiable. Refer to Note 21 for further information.
There have been no transfers between levels in the period.
32. EVENTS SUBSEQUENT TO THE REPORTING DATE – GROUP AND COMPANY
There have been no material events subsequent to the period end and up to 18 October 2016, the date of approval of the financial 
statements by the Board.
33. ULTIMATE CONTROLLING PARTY
The Directors believe that there is no ultimate controlling party of the Group.
34. TRANSITION TO IFRS
In preparing the financial statements, the Group’s opening Consolidated Statement of Financial Position was prepared as at 30 June 
2014, the Group’s date of transition to IFRS. The historical financial information for the period ended 28 June 2015 has therefore been 
prepared in accordance with IFRS. Previously, the Group prepared its financial statements for this period in accordance with Generally 
Accepted Accounting Principles in the United Kingdom (UK GAAP).
Accordingly, the Group has prepared financial information which complies with IFRS applicable for periods ended on or after 28 June 
2015, as described in the summary of significant accounting policies. In restating its UK GAAP financial statements, the Group has made 
provision for additional lease incentives and reversed a charge for the amortisation of goodwill in accordance with accounting policies 
described below. The Group has also recognised certain non-current assets as intangible rather than tangible assets.
74 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 34. TRANSITION TO IFRS CONTINUED
A summary of the impact of transition to the Consolidated Statement of Financial Position is as follows:
52 weeks ended
28 June 2015
As previously 
reported under 
UK GAAP
£
52 weeks ended
28 June 2015
As reported 
under IFRS
£
ASSETS
Non-current assets
Intangible assets 478,469 1,553,433
Property, plant and equipment 13,164,163 12,294,264
Deferred tax asset 215,993 215,993
13,858,625 14,063,690
Current assets
Inventories 4,493,841 4,493,841
Trade and other receivables 13,672,466 13,672,466
Corporation tax recoverable 166,709 166,709
Cash and cash equivalents 4,939,924 4,939,924
23,272,940 23,272,940
Total assets 37,131,565 37,336,630
LIABILITIES
Current liabilities
Trade and other payables 12,210,082 12,210,082
Bank overdraft 10,637,314 10,637,314
Borrowings 954,521 954,521
23,801,917 23,801,917
Non-current liabilities
Other payables and accruals 1,495,306 1,774,731
Borrowings 7,298,718 7,298,718
Provisions 668,898 668,898
9,462,922 9,742,347
Total liabilities 33,264,839 33,544,264
NET ASSETS 3,866,726 3,792,366
EQUITY 
Share capital 103,418 103,418
Retained earnings 3,534,979 4,003,546
Translation reserve – (542,927)
Merger reserve 223,251 223,251
Capital redemption reserve 5,078 5,078
Total equity attributable to shareholders 3,866,726 3,792,366
Notes:
Website development costs and software which are not an integral part of hardware assets have been reclassified to intangible assets under IFRS. Under UK GAAP, these costs 
were included as part of property, plant and equipment.
Goodwill is not amortised but is subject to annual impairment review under IFRS. Under UK GAAP, goodwill is amortised.
Lease incentives are recognised over the lease term, on a straight line basis under IFRS. Under UK GAAP, lease incentives are recognised over the shorter of the lease term and 
the period ending on a date from which it is expected the prevailing market rental will be payable, on a straight line basis.
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Financial statements
FINANCIAL STATEMENTS Notes to the financial statements Notes to the financial statements continued
For the period ended 26 June 2016
34. TRANSITION TO IFRS CONTINUED
A summary of the impact of transition to the Consolidated Statement of Financial Position is as follows:
52 weeks ended 
28 June 2015
 £
52 weeks ended 
29 June 2014 
£
Equity reported in accordance with UK GAAP 3,866,726 2,117,521
Transition adjustments:
Amortisation of goodwill 205,065 170,888
Lease incentives (279,425) (164,645)
Equity reported in accordance with IFRS 3,792,366 2,123,764
A summary of the impact of transition to the Consolidated Statement of Comprehensive Income is as follows:
52 weeks ended 
28 June 2015 
£
Profit reported in accordance with UK GAAP 2,127,826
Foreign exchange translation differences (380,039)
Total recognised gains and losses for the financial period in accordance with UK GAAP 1,747,787
Transition adjustments:
Amortisation of goodwill 34,177
Lease incentives (114,780)
Total comprehensive income in accordance with IFRS 1,667,184
76 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts Notes
As at  
26 June 2016 
£
As at  
28 June 2015 
£
ASSETS
Non-current assets
Investments 37 9,064,727 108,496
9,064,727 108,496
Current assets
Trade and other receivables 38 1,498,362 –
Cash and cash equivalents 39 1,224,248 –
2,722,610 –
Total assets 11,787,337 108,496
LIABILITIES
Current liabilities
Trade and other payables 40 482,420 –
Total liabilities 482,420 –
NET ASSETS 11,304,917 108,496
EQUITY 
Share capital 41 112,838 103,418
Share premium 41 11,749,487 –
Retained earnings (563,709) –
Capital redemption reserve 41 6,301 5,078
Total equity attributable to shareholders 11,304,917 108,496
The financial statements of Hotel Chocolat Group plc, registered number 08612206 were approved by the Board of Directors and 
authorised for issue on 18 October 2016. They were signed on its behalf by:
Matt Pritchard
Chief Financial Officer
18 October 2016
Company Statement of Financial Position
As at 26 June 2016
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Financial statements
FINANCIAL STATEMENTS Company Statement of Financial Position Notes
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015
 £
Loss for the period (563,709) –
Operating cash flows before movements in working capital (563,709) –
Increase in other receivables (124,226) –
Increase in accruals 146,229 –
Interest paid – borrowings (113,000) –
Cash flows used in operating activities (654,706) –
Acquisition of subsidiary (54,921) –
Settlement of intercompany balances (9,826,125)
Cash flows used in investing activities (9,881,046) –
Cost of issue of new equity (240,000)
Proceeds from issue of shares 12,000,000 –
Cash flows from financing activities 11,760,000 –
Net change in cash and cash equivalents 1,224,248 –
Cash and cash equivalents at beginning of period 39 – –
Cash and cash equivalents at end of period 39 1,224,248 –
Company Statement of Cash Flow 
For the period ended 26 June 2016
Company Statement of Changes in Equity 
For the period ended 26 June 2016
Share  
capital
 £
Share  
premium 
£
Retained  
earnings 
£
Capital 
redemption 
reserve 
£
Total 
£
As at 30 June 2014 107,078 – – – 107,078
Capital redemption (5,078) – – 5,078 –
Shares issued in the period 1,418 – – – 1,418
Equity as at 28 June 2015 103,418 – – 5,078 108,496
Loss for the period – – (563,709) – (563,709)
Capital redemption (1,223) – – 1,223 –
Shares issued in the period 10,643 11,989,487 – – 12,000,130
Costs of issue of new equity – (240,000) – – (240,000)
Equity as at 26 June 2016 112,838 11,749,487 (563,709) 6,301 11,304,917
78 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts 35. COMPANY FINANCIAL STATEMENTS
As permitted by section 408(3) of the Companies Act 2006, a separate Statement of Comprehensive Income, dealing with the results of the 
Parent Company, has not been presented. The Parent Company profit for the period ended 26 June 2016 is £563,709 (28 June 2015: £ nil).
36. ACCOUNTING POLICIES
To the extent that an accounting policy is relevant to both Hotel Chocolat Group and Company financial statements, refer to the Group 
financial statements for disclosure of the accounting policy.
Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 (FRS 100): Application of Financial 
Reporting Requirements and Financial Reporting Standard 101 (FRS 101): Reduced Disclosure Framework. The principal accounting policies 
adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the periods 
presented, unless otherwise stated.
The financial statements have been prepared on a historical cost basis, except for the revaluation of certain properties and financial 
instruments. The presentation currency used is sterling.
Disclosure exemptions adopted in preparing these financial statements the Company has taken advantage of all disclosure exemptions 
conferred by FRS 101.
Therefore these financial statements do not include:
• certain comparative information as otherwise required by EU-endorsed IFRS;
• the effect of future accounting standards not yet adopted; and
• disclosure of related party transactions with other wholly owned members of the Group headed by Hotel Chocolat Group plc.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included in 
the company’s consolidated financial statements. These financial statements do not include certain disclosures in respect of:
• share-based payments;
• financial instruments (other than certain disclosures required as a result of recording financial instruments at fair value); or
• fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value).
The Company has adopted a change in reporting GAAP during the current period to FRS 100 and FRS 101. In previous years the financial 
statements were prepared in accordance with applicable UK accounting standards. This change has not resulted in any amendments to the 
presentation or measurement to any balances and as such no transition disclosures have been provided.
37. SUBSIDIARY UNDERTAKINGS
Investments in subsidiaries held by the Company as non-current assets are stated at cost less any provision for impairment.
52 weeks ended 
26 June 2016 
£
52 weeks ended 
28 June 2015 
£
Cost
At beginning of period 108,496 108,496
Additions 8,956,231 –
At end of period 9,064,727 108,496
Carrying amount 9,064,727 108,496
A list of the significant investments in subsidiaries, including the name, proportion of ownership interest, country of operation and country 
of registration can be found in Note 18.
Notes to the Company financial statements 
For the period ended 26 June 2016
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Financial statements
FINANCIAL STATEMENTS Notes to the Company financial statements Notes to the Company financial statements continued
For the period ended 26 June 2016
38. TRADE AND OTHER RECEIVABLES
There were no material receivables which were past due but not impaired at the end of any period.
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015
£
Other receivables 124,226 –
Prepayments 5,000
Amounts due from related parties 1,369,136 –
1,498,362 –
39. CASH AND CASH EQUIVALENTS
The cash flow statement on page 78 gives a breakdown of cash movements in the year. To the extent a disclosure is relevant to both the 
Hotel Chocolat Group and Company financial statements, refer to the Group financial statements.
40. TRADE AND OTHER PAYABLES
52 weeks ended 
26 June 2016
 £
52 weeks ended 
28 June 2015 
£
Accruals 146,229 –
Amounts due to related parties 336,191 –
Total trade and other payables 482,420 –
41. SHARE CAPITAL AND RESERVES
The share capital, share premium and the capital redemption reserve are consistent with Hotel Chocolat Group financial statements.  
Refer to Notes 24 and 25 of the Group financial statements.
42. CAPITAL COMMITMENTS
There were no amounts contracted for but not provided for as at 26 June 2016 (28 June 2015: £nil). 
43. RELATED PARTY TRANSACTIONS
Amounts owed by and to subsidiaries are disclosed in Notes 38 and 40 respectively, of the Company financial statements.
The remuneration of the key management personnel of the company are disclosed in Note 8 of the Group financial statements. 
Interests and related party transactions are disclosed in Note 28 of the Group financial statements. 
80 HOTEL CHOCOLAT GROUP PLC Annual Report and Accounts REGISTERED OFFICE
Mint House
Newark Close
Royston
Hertfordshire SG8 5HL
COMPANY WEBSITE
www.hotelchocolat.com
COMPANY SECRETARY
Peter M Harris
ADVISERS
Nominated Adviser and Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
Legal Advisers to the Company
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
AUDITORS
BDO LLP
55 Baker Street
London W1U 7EU
REGISTR ARS
Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Company information
81
Company overview Strategic report Governance
Financial statements
FINANCIAL STATEMENTS Company information ANNUAL REPORT AND ACCOUNTS
2016
Annual Report and Accounts 2016 HOTEL CHOCOLAT GROUP PLC
Not all chocolates are created equal
REGISTERED OFFICE
Hotel Chocolat Group plc
Mint House 
Newark Close 
Royston 
Hertfordshire SG8 5HL